World Bank, Rooted in Bureaucracy, Proposes a Sweeping Reorganization

[Butifldrm]

World Bank, Rooted in Bureaucracy, Proposes a Sweeping Reorganization By ANNIE LOWREY Published: October 6, 2013

WASHINGTON — Jim Yong Kim, the genial American physician who took over as the president of the World Bank last year, recently conducted a survey of its 10,000 employees. The survey revealed a “culture of fear,” pervasive “fear of risk” and a “terrible” environment for collaboration at the huge development institution, which lends more than $30 billion a year and works in more than 100 countries.”

The bank, which provides a range of services to developing countries, from infrastructure loans to health grants to budget advice, was in danger of becoming a series of regional banks rather than a world bank, Dr. Kim said in an interview at its headquarters, two blocks from the White House. Worse, he feared its internal culture and structural organization might hamper its progress toward its newly made goals of eradicating extreme poverty by 2030 and ensuring inclusive growth.

“We could become less than the sum of our parts,” Dr. Kim said.

With the survey concluded and the bank’s two headline goals named, Dr. Kim has planned a sweeping reorganization. He intends to present his plan at the bank’s annual meetings, conducted in concert with the International Monetary Fund at the end of this week.

The reorganization, the first in nearly two decades, is meant to encourage collaboration across the sprawling, Balkanized and in some cases demoralized bank, which is conducting more than a thousand projects around the globe.

Right now, the bank’s operations are organized largely fund by fund, country by country and region by region. “When we asked technical people how much time they spent supporting other regions, the answer was less than 1 percent,” Dr. Kim said.

He also said there were capital cities where two arms of the broader World Bank group had been working in different offices and barely had any contact. “There really was a sense that these two institutions worked separately,” he said.

The proposal would organize the bank around 14 “global practices,” cutting across the bank’s different projects and funds. Those practices would include agriculture, education, energy and extractives, health and nutrition, and trade and competitiveness.

Many development experts have applauded the changes, at least in theory. “The concept is terrific, as is the emphasis on the bank’s comparative advantage as being a knowledge institution,” said Nancy Birdsall, the president of the Center for Global Development, a Washington-based research organization.

But Dr. Kim acknowledged the challenges that might come with reforming the bank’s bureaucracy. He said that the response to his proposal had been “mixed,” with some employees welcoming the plan and others voicing concern that the bank might focus too much during the transition on internal change and not enough on enacting its development programs.

Dr. Kim’s plan would change the pathways of power within the bank. The reshuffling process has already started. The Indonesian economist Sri Mulyani Indrawati has become the bank’s chief operating officer, and the anticorruption expert Sanjay Pradhan has become vice president for “change, knowledge and learning,” in charge of carrying out the restructuring.

A number of other high-level employees with long tenures at the bank have departed, and Dr. Kim said he would look outside the organization for the right “practices” directors where necessary. Bank employees are expecting layoffs.

“It’s a bureaucracy, and to see whether the restructuring works, you’re going to have to see how the money and approval process changes,” said an American worker at the bank, who spoke on the condition that she not be named to discuss her employer candidly. “A lot of people aren’t going to be happy about it.”

The World Bank, which is financed by its 188 member countries, spends more every year than any other development institution, but its dominance has waned over the last 20 years. Private investment has become more important to poor countries’ development, with traditional lending- and grant-based aid becoming relatively less so. There is also more competition among aid groups, including from giant ones like the Gates Foundation.

Moreover, three-quarters of the world’s very poor now live in fast-growing middle-income countries like China and India that are wielding more and more global influence themselves. Five of those countries, the so-called BRICS — Brazil, Russia, India, China and South Africa — have started work on their own development bank.

The reorganization, Dr. Kim said, is aimed at making the bank more efficient and quicker on the ground — a more effective engine of change that is more responsive to countries’ needs in real time. He said the idea was to be a “solutions bank,” he said, offering lending or grants, consulting and technical expertise. (One of his predecessors as president, James Wolfensohn, made his goal turning the institution into a “knowledge bank” back in the 1990s.)

The reorganized bank would focus more on working in partnership with the private sector, Dr. Kim said. It would also be more tolerant of higher-risk, higher-reward and more controversial ventures. “If you have a spectacular failure, the only thing that I would be disappointed about is if we didn’t ensure we learned from that failure,’ ” Dr. Kim said.

But development experts who have worked for the bank noted that changing such a deeply entrenched bureaucracy might prove difficult — and translating organizational change into improved performance even more so.

Ms. Birdsall also said that the bank might need to do more to adapt to the world’s development needs as they change, for instance devoting money and expertise to problems like drug and human trafficking that occur outside of a single-country context. “The new development challenges are often global in nature, shared by people in the United States and Japan and so on,” she said. “Climate is the classic example.”

 

 

 

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http://www.nytimes.com/2013/10/07/business/international/world-bank-rooted-in-bureaucracy-proposes-a-sweeping-reorganization.html?ref=world&_r=0

 

[PrettyKitty]

Thank you for bringing this to site: seems like so many changes are starting to take place (everywhere) AND I'm not sure which way it's all headed, for the good or for the bad.   Go RV

[Dinar Buddy]

I like this post... Pressure is go.