The New Role of the World Bank

31 Pages Posted: 25 Feb 2016

See all articles by Michael A. Clemens

Michael A. Clemens

Center for Global Development; IZA-Institute for the Study of Labor

Michael Kremer

Harvard University - Department of Economics; Brookings Institution; National Bureau of Economic Research (NBER); Center for Global Development; Harvard University - Harvard Kennedy School (HKS)

Date Written: January 25, 2016

Abstract

The World Bank was founded to correct failures in international capital markets. That role has shifted over the past 70 years. Modern analyses should proceed from the premise that the Bank’s central goal is and should be to reduce extreme poverty. We show that the vast majority of donor subsidies to the Bank go to its funding vehicles aimed at the poorest nations. We argue that the Bank’s principal impact arises through its influence on national policies and that economic theory suggests such influence is often best exerted multilaterally. This view implies new ways to structure and evaluate the institution.

Keywords: World Bank, extreme poverty, multilateralism, evaluation

JEL Classification: F35, H87, O19

Suggested Citation

Clemens, Michael Andrew and Kremer, Michael R., The New Role of the World Bank (January 25, 2016). Center for Global Development Working Paper No. 421. Available at SSRN: https://ssrn.com/abstract=2737047 or http://dx.doi.org/10.2139/ssrn.2737047

Michael Andrew Clemens (Contact Author)

Center for Global Development ( email )

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IZA-Institute for the Study of Labor ( email )

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Michael R. Kremer

Harvard University - Department of Economics ( email )

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Brookings Institution

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National Bureau of Economic Research (NBER) ( email )

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Center for Global Development

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5th floor
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United States

Harvard University - Harvard Kennedy School (HKS) ( email )

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Cambridge, MA 02138
United States

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