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Will Transparency Save the World Bank?

July 11, 2011

I confess that I am a World Bank junkie. There is nothing (well, very little) that perks my intellectual interest more than an in-depth discussion on the internal and external politics of the Bank. Over the past two weeks in DC, I have mercilessly subjected my graduate students to numerous conversations about the challenges facing the organization with experts within the Bank, US Senate, and the world of NGOs and think tanks. To my fabulous students, I want to say thanks for letting me nerd-out. To faithful Duck readers, I’d like to pose a few questions about the future of the Bank that arose from these conversations.

Fellow Bank-junkies will undoubtedly have caught the big story about the World Bank’s Open Data Revolution in the New York Times on July 3. The story aptly captures the Bank’s current crisis:

“…while the I.M.F. is busy with scandal and the debt crisis now shaking Europe, officials at the World Bank’s headquarters here are confronting some existential questions, including the big one: What exactly are we doing here?”

Indeed, for well over a decade the Bank has been struggling with a tripartite challenge of waning relevance, questioned effectiveness, and challenged legitimacy. In response, the Bank has sought to redefine its identity from a lending Bank to a Knowledge Bank. In so doing, the Bank hopes to redefine its comparative advantage and raison d’etre in an increasingly crowded and competitive field of development funders, generating influence and authority as much from its expertise as the (waning) power of its purse.

And I have to say that in the last year, the Bank’s transformation has been remarkable. A few months ago, the Bank finally passed its revised information disclosure policy, moving from a highly restrictive policy that listed what could be disclosed to a much more liberal policy that presumes everything is open unless explicitly exempted (hallelujah!). It also created free public access to a wealth of development data, including the World Development Indicators. Moreover, it is now possible to quickly find extensive information on the World Bank’s projects and programs, complete with links to project documents on its project portal page. The World Bank has even starting geomapping its aid programs (thanks in large part to the groundbreaking work of AidData and Development Gateway). Not surprisingly, the World Bank has in turned earned high marks for its efforts, including top scores in Publish What You Fund’s Aid Transparency Assessment and the Center for Global Development’s Quality of Official Development Assistance (QuODA).

But for the moment I have a few questions regarding the impact of this Transparency Revolution on the future of the World Bank (and I’m sure I’ll have more questions later):

First, how can transparency be effectively turned into an accountability tool? We have yet to see how the opening of the data floodgates at the Bank will (in development parlance) “empower stakeholders.” This will depend not so much on the accessibility of data as the usability of data, as noted by the Aleem Walji, the Bank’s guru for Open Data. To paraphrase the words of one close observer, open data could be like the race car that no one can drive. How will we know the real impact of the open data revolution? Hint: it won’t be through the number of hits to the website or the download count.

Second, will the Bank’s new and improved transparency, as well as its efforts to “democratize” its governance, solicit sustained political support, particularly from its biggest donor? We’re in the midst of the FY2012 Budget Request and it includes a big call for a General Capital Increase for the World Bank and other multilateral development banks. But the general sentiment in DC is that this is going to be a hard sell. The World Bank (in contrast to some of the other MDBs and bilateral aid agencies) is held in high esteem, but there is little political support on the Hill for development aid and multilateralism in general.

Third, will the Bank’s progress in reestablishing its legitimacy via its transparency revolution translate into a revival of its relevance? I ask this because there is a deeper underlying problem regarding the need for the Bank today. Global financial crisis notwithstanding, the demand for the Bank’s (and other aid agencies’) loans and services is quickly waning in most areas of the world, with the exception of Sub-Saharan Africa. Many middle income countries are now graduating from the International Development Agency (IDA), the Bank’s soft loan window. Their need (and desire) for funds to help support infrastructure and other development projects can be easily met by private capital markets, which offer rates similar to the IBRD (the Bank’s hard-loan window) without all the conditions and safeguard requirements. More critically, new non-OECD DAC donors – most notably China, as well as large foundations like the Bill & Melinda Gates Foundation – provide would-be borrowers with many other options besides the traditional multilateral and bilateral lenders. Knowledge Bank aside, can the Bank continue to exist with its current mandate, staff and structure without demand for its core lending business?

Finally, for your amusement, a completely unrelated observation offered by one of our speakers about the contrasting cultures and internal debate within the IMF and World Bank:

“The Fund is arrogant, superior, and like the Borg. If you put five Fund staffers in a room, only one will speak. The Bank, on the other hand, is unfocused, undisciplined, squishy. If you put five Bank staffers in a room, they will all speak at once.”

(And no, that flattering comparison did not come from our NGO speaker. It came from from someone who worked within both of the institutions….)

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Catherine (Kate) Weaver is associate dean for students and associate professor at the LBJ School of Public Affairs. She is a distinguished scholar at the Strauss Center for International Security & Law, where she is the founding director of Next Generation Scholars Program. She also chairs the university’s Graduate Assembly Academic Committee, the President’s Award for Global Learning steering committee, and the Truman Scholarship committee. Weaver’s research focuses on transparency in international development aid, reforming global economic governance, and the politics of data in the world economy. She has developed methods to track and dynamically geomap aid and climate adaptation, and writes about the shifting power, players and paradigms in governing the global economy. Her latest project, the Global Indices Network (GIN), examines the interdependent power and pathologies of global indices.