What's the value added of World Bank?

"The bank thought it financed an electric power station, but in fact financed a brothel."

- Paul Rosenstein-Rodan, 1961 (source: The Rise and Fall of the World Bank Economic Department)


An interesting recent book on The World Bank;
The World Bank and the Gods of Lending by Steve Berkman

As a non-economist at the Bank, I was periodically reminded by my superiors of my obvious inability to grasp the full essence of economic development and all the nuances of the economic process. They were probably right, as I was, after all, just a technical specialist, and while specialists could only advise on their specialty, economists could advise on anything they damn well pleased because they were economists and had the inside track on everything. They were the economic managers, and their solution to the world’s problems was to produce more economic managers. And so the Bank would fund all sorts of training (Ph.D. degrees in economics being one of the more popular approaches), conferences, seminars, workshops, and whatever, to that end. The economists at the Bank were in essence cloning themselves, and they seemed to be quite pleased with the whole business...

I recall a regional management meeting in 1995 during which we were reviewing “problem projects” in our lending portfolio for Africa. We had at the time over five hundred ongoing projects in an $11 billion portfolio5 that required supervision by Bank staff to ensure that implementation was on track, loan agreement conditions were being met, and that project objectives would be achieved. As my PRT work had morphed into institutional development and public-sector management, and I had been doing skills-mix analyses for many of our borrower institutions, I decided, prior to our meeting, to examine the skills mix of our regional staff to see if this might have any correlation to our portfolio problems. Lo and behold, it seems that we had roughly 300 economists of various persuasions, 10 financial analysts, 10 public-administration specialists, and roughly 150 technical specialists (engineers, architects, educators, health services specialists, and so forth).

I raised this matter at the meeting and inquired how we could effectively handle the financial and institutional management issues, which were our major problem areas, with only ten financial and ten public administration specialists on our staff. I also asked what project-management expertise three hundred economists were adding to our ability to supervise our portfolio adequately.