Something I learned today, Episode 1
The World Bank has always been focused on poverty reduction.
Today, the World Bank's motto is "Working for a world free of poverty." [1]
For the longest time I thought this motto was a fairly recent development. Partly the result of a change of heart, and partly the result of a public relations attempt to put a friendlier face on the organization, so that it might live down some of the notoriety it earned in the 80s and 90s.
Today I had the chance to skim parts of Devesh Kapur, John P. Lewis and Richard Webb's lengthy and definitive history of the first fifty years of the World Bank. [2] Written in the 1990s, well before "recent developments," it tells the story of an organization that has always worked to reduce poverty.
Inscription at the entrance to World Bank headquarters in Washington, D.C. (Source)
But if the World Bank has always been working to reduce poverty, how did it manage to get such a bad rap in the 80s and 90s? In my opinion, the long story short of it is that the organization failed to properly understand the relationship between poverty and development.
All too often development thinkers tend to understand poverty as a symptom of under development. As a result, they end up deducing that growing economies and increasing development will necessarily lead to poverty reduction.
They will also, then, use GDP as an indicator of progress on poverty, even though it is no such thing.
Though the World Bank was always preoccupied with poverty reduction, for several years it began to pursue economic development for its own sake, believing this would automatically lead to poverty reduction.
Though related, poverty is actually something separate from economic development, and can even be something prior. More and more thinkers are now studying how poverty induces drag on economic development, and are considering ways that direct poverty reduction efforts can actually energize economies.
Nowadays, development thinkers, including the World Bank, distinguish between growth that is pro-poor and growth that is not.
But the history documented by Kapur et al. also implies a word of caution. There appears to be some cyclicality to how the organization has thought about poverty and development over the years. This time is not the first time that the organization has had to return to an explicit focus on poverty, and it may not be the last. [3]
[1] Additionally, on its official web page, it lists two goals for itself and the world, to “end extreme poverty” and to “Promote shared prosperity by fostering the income growth of the bottom 40% for every country”by the year 2030.
[2] Unfortunately, I don't have direct access to a copy of this two volume tome, but I was able to pieces together the gist of what it says from Google Books excerpts and some reviews.
[3] Historically, shifts appear to have been driven by some combination of global political circumstance—initially poverty reduction was prioritized to stymie Soviet expansion— and leadership tastes—apparently Robert McNamara was keen on poverty reduction, while later leaders were less so.