If the new World Bank President calls …

International Economy, The, Spring, 2005

I would also add democracy as an important institutional mechanism for success. While transition to better policies can be difficult under democracies, the combination of political and economic freedoms is generally the most powerful policy mix for sustained development and assault on poverty.

HORST SIEBERT

President-Emeritus of the Kiel Institute for World Economics and Agip Professor for International Economics, Johns Hopkins University, Bologna

The mission of the World Bank is to reduce poverty in the developing countries, to get these countries on a promising growth path, and to improve the living standards of their people. This mission defines Wolfowitz' own measuring rod. Are the existing programs effective in fighting the multidimensional problem of poverty? How effective are they in the long run? Which program is more effective than others under the given conditions of a country? Which preconditions are essential in terms of humanity, such as fighting illnesses, and contribute to development simultaneously? And which conditions will initiate a growth process? How relevant is education?

Wolfowitz would be well advised to introduce an external control panel evaluating the efficiency of the programs and to increase transparency. In any case, he will not succeed if domestic institutional reforms in the poorer countries are not undertaken. If the incentives defined by the institutional set-up are false, growth simply will not take place. Financial means, whether loans or grants, should not vanish in corruption or serve to stabilize incapable regimes working to line their own pockets. The most difficult question he will have to answer is whether democracy is a precondition for receiving help from the World Bank. Or is it sufficient and appropriate to tailor the programs in such a way that they start a process, eventually leading to democratic governments?

Most importantly, Wolfowitz must define his role from a global perspective, and not through the U.S. looking glass. Then he is not credible. He must avoid being viewed as the henchman of U.S. policy.

SYLVIA OSTRY

Distinguished Research Fellow, Munk Centre for International Studies, and Former Canadian Ambassador for the Uruguay Round and Summit Sherpa

The focus on poverty this year is really quite amazing--the G7/G8 Summit and the U.N. Millennium Assembly and the Millennium Development Goals and so forth. When Robert McNamara became World Bank president, he pledged in 1973 to eradicate poverty by the year 2000. With the Millennium Development Goals the time frame has slipped a bit. But goal rhetoric has not abated.

Perhaps it's a response to a media that favors the emotive over the intellectual. But can rhetorical inflation go on forever? Could President Wolfowitz admit that we really don't know how to "eradicate" poverty in many countries and that there will have to be policy pilots--learning by doing? Let's begin in Africa. Let's focus on agriculture. Let's involve the World Trade Organization and the New Partnership for Africa's Development. Despite lots of talk about international policy coherence, let's admit it hasn't really worked with respect to poverty. So how about a Pilot Project for Coherence?