In lieu of an abstract, here is a brief excerpt of the content:

Reviewed by:
  • Reforming the World Bank. Twenty Years of Trial—and Error
  • Michele Alacevich
David A. Phillips . Reforming the World Bank. Twenty Years of Trial—and Error. Cambridge: Cambridge University Press, 2009. xx + 324 pp. ISBN 978-0-521-88305-4, $50.00 (cloth).

The World Bank is the largest multilateral lender to less developed countries. Although its share in the global flow of financial resources to developing countries has progressively decreased since the 1980s, the Bank remains an important player in the field of global development, especially for its well-known influence in many borrowing countries and its recent positioning as a "knowledge bank," in line with the growing role of knowledge in international development policies. During its life, a succession of leadership and strategies often resulted in internal reorganizations. The last of these reorganizations, following increasing criticism on the Bank's effectiveness and business model, was carried out under James Wolfensohn, president of the Bank between 1995 and 2005. David Phillips contributes a thorough discussion and an assessment of the Wolfensohn's reorganization, the so-called Strategic Compact, implemented between 1997 and 2001.

After two introductory chapters about the World Bank and its role, policies, governance, and finances, plus a few hints on previous criticism of the Bank and attempts at reforming it, the central and longest part of the book is devoted to the examination of the Strategic Compact. At the core of this reorganization was the establishment of a matrix management system connecting country-focused units and skills-focused units (human development, finance, agriculture, [End Page 701] infrastructure, etc.). Country units would recruit the specialists they needed from pools of skill units, which offered their expertise to any country unit that needed it. To increase efficiency, human resources would be allocated based on an internal market system: country units would "buy" the time and competencies of specialists in different fields according to the country unit's needs. To implement this market-based distribution of resources, a complex recording system for time and resources was set in place.

The Strategic Compact was meant to remove internal barriers and compartmentalization and increase efficiency, but in fact disrupted reporting lines, increased bureaucracy, and caused lack of continuity in the operations. Regrettably, only in a footnote the author notes that client countries complained about this lack of continuity. The country teams were continuously changing as if the specific history of a project, its background, and how the economy of a region evolved were not essential information for its success. The "Knowledge Bank" launched by Wolfensohn in 1996, one year before the Strategic Compact, actually seemed to deny the value of country- and project-specific knowledge. A series of chapters review in more detail the consequences of the Compact, such as the negative evolution of the Bank's development assistance, the Bank's financial efficiency, and—particularly horrifying—the squandering of human resources and skills: in the name of internal renewal, between 1997 and 2002 nearly half of the staff left the Bank, primarily staff over fifty years old with a long experience in the Bank. In 2002, one-third of the staff was a new hire.

The conclusion of the author is that, faced with an institution whose business processes before the Strategic Compact were considered ineffective, its human resources inadequate, and the type and quality of projects unsatisfactory, the Compact failed: the reorganization was "chaotic, poorly designed and managed;" the Bank's new policies, not driven by a clear strategy, did not gain in effectiveness and were not as pro-poor as claimed; and the flame of the reform burnt existing skills and institutional memory that the Bank was never able to recover (p. 211). The cure turned out to be worse than the disease: "team-building was the aim, but the matrix emasculated the teams. The information bureaucracy impeded the flow of information. Time recording prevented efficient use of time. De-layering did not increase accountability [. . . ]. Projects were to be simplified but became relentlessly more complicated" (p. 214).

Among several reasons for the failure of the Compact, Phillips primarily blames the governance of the Bank. A top management and a leadership detached from the daily life and problems...

pdf

Share