Jim Yong Kim, selected as the World Bank's new leader on Monday, has his work cut out for him. Sure, the bank has helped halve the poverty in the developing world over the past two decades -- part of the first Millennium Development Goals -- but progress in South Asia has dwarfed that in Africa, and 1 billion people will still live below the poverty line by 2015. And there's more bad news for Kim: The World Bank's narrow economic approach to poverty eradication simply will not work today, because the root causes of certain types of poverty are as structural as they are economic. This means the global health expert and former Dartmouth College president will have to think about international development in innovative, outside-the-box ways.
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Here are five ideas that Kim could implement to make the bank more effective in its mission to "help reduce poverty:"
1. Forget about growth
One of the World Bank's purposes is to "promote private foreign investment ... for the development of the productive resources of members," and its priority lending goes to "financial and private-sector development." Criticisms in the 1990s (from Kim, among others) of this growth-centered approach led the bank to shift its focus to "inclusive" growth -- growth that purported to take into account health, education, and environmental concerns. But if the bank is indeed interested in health, education, and the environment, it's far from clear why it's so intent on increasing productivity. In his inaugural address in 2007, outgoing World Bank President Robert Zoellick admitted that economic growth could only do so much to alleviate poverty:
Nearly 300 million people have escaped extreme poverty [as a result of economic growth].
Yet many remain on the fringes and some are falling further behind ... Their exclusion has many causes -- including conflicts, poor governance and corruption, discrimination, lack of basic human needs, disease, the absence of infrastructure, weak economic management and incentives, lack of property rights and rule of law, and even geography and weather.
Many of these causes have nothing to do with economic growth. If poverty reduction is truly the mission of the Bank, it needs to focus more on sectors such as education and health and reflect that reorientation in its investments.
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