If the new World Bank President calls …

International Economy, The, Spring, 2005

The necessary policy changes--promoting trade liberalization and financial sector reform, and focusing humanitarian aid on a few, concrete, and verifiable objectives (e.g., educational achievement, clean water, vaccinations) while ensuring accountability of aid providers through the credible evaluation of outcomes--are simple and obvious. But they will constitute a revolution, and there are many inside and outside the Bank with strong vested interests who will oppose such reforms. One way to overcome opposition might be to introduce the new approach quickly in one or two receptive countries, and use the improvements in living standards in those countries to campaign for broader implementation. Demonstrated success would matter far more in the political battle for reform than the opinions of experts.

RICHARD D. ERB

Senior Fellow, Montana World Affairs Council, Research Professor, University of Montana, and IMF Deputy Managing Director, 1984-1994

Everyone appears to agree on the need to reduce poverty, but finding common ground on ways to reduce poverty in individual countries is another matter. Based on my IMF experience, I attach a high priority to the quality, stability, and ultimately the democratic accountability of a country's government.

The fact that the World Bank and the broader development community currently promote good governance is welcome. Given the multinational character of the World Bank and other international organizations, it is not surprising that much of that effort is technocratic in nature and focuses on such subjects as corruption, transparency, and government institution building. These efforts should be intensified and indeed broadened to pay more attention to democratic accountability, especially given the emphasis many countries place on supporting "home-grown" policies.

But for many countries suffering from extreme poverty, the challenge is more fundamental than good governance. These are countries torn apart over struggles for self-determination. They are found in every region of the world and include millions of impoverished men, women, and children. Billions of dollars of development assistance have been undone in these conflicts and more will be wasted unless they are resolved. Even worse, millions of people have died.

As a leader of the World Bank and the international development community, you have a unique opportunity to focus public attention on the extent to which unsettled self-determination conflicts undermine development and exacerbate poverty. When meeting with officials of member governments and of course the United Nations, press them to strengthen their weak and often ambivalent efforts to help resolve such conflicts. Remind them that the principle of "self-determination of peoples" is enshrined in various UN covenants.

Whether self-determination conflicts are resolved through devolution of national authority or nation deconstruction, many difficult institutional and economic issues will need to be resolved in most cases. The World Bank and other multilateral institutions, including your neighbor the IMF, have relevant experience and expertise and should play a role in such efforts. The international aid community also should make it clear that significant external financial and technical assistance will be made available when such efforts lead to agreement among the relevant parties. Such assistance should include aid for sub-national entities when appropriate.