The World Bank at the Millennium

Stiglitz, Joseph E.

This article focuses on the World Bank's role in the global economy of the 21st century. Today, the World Bank's core mission remains the promotion of economic growth and the eradication of poverty in the less developed countries. The instruments used to pursue that objective have changed over the years, to be sure. Over the Bank's history, the balance of its effort has shifted from largescale, growth-oriented projects toward projects, programmes, and policy advice that more explicitly incorporate the poverty reduction goal. Individual projects remain the core of the Bank's work, and many of these projects have been shown to be quite successful at reducing poverty and its effects, whether by reducing severe malnutrition in Tamil Nadu, India or by helping spur a dramatic increase in girls' education in Bangladesh. But the Bank has learned over the years that successful projects are not enough: because of fungibility of funds, the net benefit from financing any individual project is in fact the net benefit of the marginal government project. Recognition of that fact has led the Bank to an increased focus on whether, taken as a whole, the government's actions and the institutional environment support the goal of poverty reduction.



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Economic Journal

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April 10, 2013