For Francois Bourguignon, the World Bank’s new chief economist, it is on the foundations of the seminal economic theories of his controversial predecessor Joseph Stiglitz that both the intellectual evolution and the practical operation of the Bank must continue to be built, reports Gulf News.

„We do not have perfect markets. Economic actors are operating in a world of asymmetric information,“ said the distinguished economist in an interview with Gulf News. In the developing world, he says, the Bank must design its policies and programs in such a way as to take account of this reality, otherwise they will not be effective. It is crucial to ensure that the institutions through which development aid is delivered operate in a way which is relevant to the grass roots organizations and structures, often informal, through which the poor in developing countries eke out a living.

Aid program designers must, for example, take account of the different ways in which water for irrigation is actually allocated in a community, whether it is by payment or alternatively say, by the allocation of the right to draw water on a particular day or for a particular period of day. „We have to look at the micro level,“ he says „and make sure that the decisions made at the top fit with the way in which aid recipients actually operate.“ Institutions cannot be imposed from the outside, he
goes on. They must be capable of changing in response to pressures for change that will come from the ordinary people with whom they interact.

Bourguignon is also committed to the view that the Bank is right to see its fundamental purpose as poverty reduction. „By definition development is poverty reduction,“ he says.

In another piece, Gulf News writes that it is the complexity of the framework in which the World Bank operates which Ian Goldin, the Bank’s new Vice President for external affairs-and its top communications policymaker-sees as his greatest challenge. „We are a small part of the world on development. Our challenge is to absorb ideas more effectively, to deal with the critique that we have not listened enough and to become better at engaging in open debate with academics, with youth, with NGOs, trade unions and practitioners on the ground,“ he says. He sets himself the goal of concentrating on substance in his new post.

That will not always be easy, at an institution so frequently in the limelight-and, to some extent, it will also depend on the readiness of the both the Bank and critics to engage in serious and open-minded discussion of complex issues. „My vision is to create a platform for engagement in order to get our message out through dialogue,“ says Goldin. The Bank, he maintains, must be able, for example, to take the lessons which it is learning in, say, China, assess them and-where they seem relevant and adaptable-be capable of speedily applying them in, say, Latin America.

An enormous amount of decentralization has taken place within the Bank and this increase the communications challenge it faces, whether internally or with other institutions or agencies around the world. „We must learn to express more effectively the lessons that can be drawn from the day to day operations of the Bank around the world.“ The Bank recognizes now that the challenge of development is much more nuanced, and that issues such as understanding the capacity of governments to regulate effectively are vital, he says. „People who want to paint a simple picture will be frustrated.“