July 1, 2014; Devex 

The World Bank has been the subject of much criticism over the years, but it controls a lot of money for development aid.  Calls for reforming the Bank are a staple of the international development debate.  Each World Bank president promises reform.

Now, the current president of the World Bank, Jim Yong Kim, is implementing a reform agenda whose implementation started this week.  According to Devex writer Michael Igoe, the reform package “is meant to help the institution’s expertise and solutions move more freely across regions, simplify the bank’s cumbersome internal bureaucracy, and respond to a call from the board of directors to cut $400 million in costs in an era of global financial uncertainty.”

Igoe intimates that Kim’s “sweeping reform plan…caught many within and outside the bank off-guard…[and] contributed to a widely publicized air of anxiety among employees.”  Given the often impenetrable and unmovable World Bank bureaucracy, some discomfort might be warranted and maybe even healthy.  Tough bureaucracies (think: VA) sometimes need disruptive shake-ups to alter problem cultures. 

The reform structure that Kim has announced is “to replace a complex ‘matrix’ structure with a system of expertise-based ‘global practices’.”  What that means for the World Bank starting on July 1st is hard to gauge.  The plan calls for a “systematic country diagnostic” keyed to “an evidence-based assessment of conditions in a country that can help or hinder the achievement of the bank’s new poverty and shared prosperity goals.”  What are those goals?  By 2030, the percentage of the world’s population living on $1.25 a day or less is supposed to shrink to three percent and the bottom 40 percent of the population of developing countries is meant to experience income growth. 

Will World Bank observers and critics wait until 2030 to determine whether the reform package worked?  Igoe suggests that Kim is going to need “buy-in” from Bank employees, and to do so, he will have to assuage them that the reform process won’t completely disrupt operations.  For both internal and external consumption, Kim will need to identify “some ‘quick wins’ to build confidence in the reforms.”  The problem is that elements of the reform package won’t show results along the same timeline.  It will take years for changes in world poverty to be detected and confidently measured, while changes in the Bank’s operations will be evident quite quickly if Kim’s efforts on knowledge development and bureaucratic simplification get underway soon. 

Igoe suggests that there is some broad appreciation of the need for World Bank reform, but problems with “communication and transparency have been major sticking points in the often fraught relationship between Kim and his staff so far.”  The World Bank Staff Association issued a public letter to Kim, despite his public expressions of optimism, that indicates that the reform package might be in trouble with the people who will have to implement it. 

“Having lived with the specter of reorganization for many difficult months it feels like the worst is yet to come,” the letter reads, according to Devex. “(Y)ou can appreciate how staff are feeling. We don’t know what our work will consist of or whether and how we will work better in the new structure. We don’t know where we will sit. And, we don’t know if we will have jobs.”

Kim responded that he and the leadership of the Bank “responded to that letter with data, and so I think they were trying to make a rhetorical point, but the data really speaks otherwise in terms of the extent to which we have engaged them and asked for their input.”  It isn’t hard to sense that Kim and the staff might not be on the same page, no matter how much outreach to the staff association Kim can document. 

We raise the example of the World Bank reform as interesting in and of itself and as indicative of the challenges that face nonprofits and other governmental agencies where extensive reform is warranted, but their bureaucratic cultures constitute huge, almost immovable roadblocks.  Who will win at the World Bank?  Kim and his global practice reforms?  The staff who are feeling mighty uncertain about the latest reform package emanating from top leadership?  Or the bureaucracy, which might well frustrate both Kim and the staff?—Rick Cohen