World Bank Group distracted by internal restructure and reforms
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Article summary
At a time described by the Center for Global Development as “a very bad moment for the world’s largest source of development finance to be so distracted and disabled,” the World Bank Group (WBG) is undergoing an opaque internal restructuring, as part of President Ajay Banga’s wider reform agenda. Public details remain limited, but there are concerns that the changes, especially those to staffing and departmental structures, are guided by shareholder pressure to cut costs, despite record income for the International Bank for Reconstruction and Development in fiscal year 2025.
Evidence of the pressure faced by the Bank from the US was present in US Treasury Secretary Scott Bessent’s Spring Meetings speech to the Development Committee. Bessent noted that the US appreciated “plans for maintaining flat real budget growth on a Bank Group-wide basis over the next few years by harnessing efficiency gains to offset increased costs stemming from increases in business volumes.” Critics including Professor Mariana Mazzucato, of the University College London, have recently noted that the Bank already struggles to transform mission-oriented development into practice due to structural and organisational procedures. The restructure is therefore especially sensitive at a time when the recent BWI at 80 report identified this as urgently needed reform.
Early signs of negative impacts are already emerging. The dissolution of the Social Development Global Practice, replaced by a narrower social protection team, has displaced staff working on citizen engagement. Additionally, the Bank has drastically reduced its pool of expertise by halting all hiring of short-term consultants, and has cut staffing on environmental and social safeguards, suggesting a streamlining that may weaken institutional checks and balances.
