A disappointing perspective

The World Bank has consistently used its annual World Development Report (WDR) as a platform to project its current views on economic policy. The 2000-01 edition of the report was to be special because it was to be the first one in a decade to focus on the issue of poverty.

Unfortunately, the 2000-01 edition of the WDR was surrounded by controversy even before it was published because the head of the team of economists preparing the report chose to quit on the eve of the finalization of the report, the decision being provoked by tussles inside and outside the World Bank about what the WDR should emphasis.

Perhaps because of the controversy that went into the making of the WDR, the report in its final reform ends up adding little to our knowledge of what can accelerate poverty reduction globally and in individual countries.

It does not have to take a World Bank report in the first year of the 21st century to tell us that poverty is an outcome of a complex interaction of economic, social and political forces. Or for that matter that there is no universal blueprint to reduce poverty across the world.

And to acknowledge now that a greater degree of initial equality of assets makes for a larger distribution of benefits from growth is no more than a belated admission that the world's largest development finance institution has erred for years by paying inadequate attention to the connection between inequality and growth.

By the beginning of the 1990s almost all countries in the world had opted for reform programs of various kinds that took them closer to what the WDR would describe as sound macroeconomic policies.

However, the WDR presents dismal statistics to show that between 1987 and 1998 the number of people in the world who live on less than one U.S. dollar a day -- a poverty line adopted by the World Bank -- have increased and not decreased.

Growth in the developing countries throughout the 1990s has been fitful, global inequality has worsened and the world has fallen behind the international goal for 2015 of reducing by half the proportion of people living in absolute poverty.

The WDR would have been far more useful if it had explored in detail why this had happened and what needs to be done by way of mid-course correction.

-- The Hindu, New Delhi