Jim Wolfensohn made the reduction of poverty in the world’s poorest countries his overarching priority for the Bank. Was he successful? Meaningful improvements in the human condition and poverty reduction can only be assessed in the long-term.
The contributions of the Wolfensohn presidency will ultimately depend on his choices on strategy – the policies and priorities he set – and management – the organizational structure and managerial approach he introduced.
Wolfensohn brought an intensified focus on poverty reduction, characterized by high profile, eloquent public pronouncements, as well as broadening the development agenda to include aspects such as anti-corruption, civil society and the closer involvement of the NGO community in the Bank’s work.
As important as these steps are, they do not constitute in themselves a guarantee of poverty reduction. They chiefly focus on the conditions of poverty rather than the prevention or solution of poverty. By contrast to the massive expansion the Bank’s social development activities as measured by budget resources and lending volumes, Bank support for the productive and infrastructure sectors has fallen sharply over the past 10 years.
On the managerial front, the increased posting of the Bank’s operational staff to resident missions in the borrowing countries was a logical extension of the fundamental organizational change introduced by Robert McNamara in the early 70s. This change established the operational supremacy of the regional managers over the Bank’s sector specialists in determining country specific strategies and programmes.
In order to maintain the Bank’s cutting edge technical expertise, centralized sector specialists group were created. The higher proportion of Bank staff now in the field is no doubt closer to the local conditions and can work more efficiently with counterpart country officials. However, in the process, the Bank has diluted the strength of its world-class expertise in traditional sectors and so reduced its ability to provide value through technical advice to borrowing countries in those sectors.
Finally, sea changes in institutions like the World Bank can occur when a team of executives is built and led by a leader who provides direction, motivation and strong backing. Hopefully, such a team and approach exist in the Bank; it is not visible from the outside.
Only in 10-20 years will we be able to judge the success of Jim Wolfensohn ‘s priorities and management approach by measuring actual reduction in poverty attributable to the Bank’s work over the past decade.