Do World Bank's Woes Hurt Its Mission?

With the resignation of Paul Wolfowitz, the World Bank is once again under scrutiny. Jeffrey Sachs, director of the Earth Institute at Columbia University, offers his views on the bank's future. Is it still relevant in the fight against global poverty?

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REBECCA ROBERTS, host:

The ink was hardly dry on World Bank President Paul Wolfowitz' resignation when international development experts began handicapping his potential successors. And while the names in play may be familiar only in particular Washington circles, their various policy priorities are bound to influence efforts to reduce global poverty.

To help us understand the World Bank's role in fighting poverty around the world, we've called Jeffrey Sachs. He is director of the Earth Institute at Columbia University and the author of "The End of Poverty." He joins us from an airport in Vancouver, British Columbia. Thanks so much for being with us.

Mr. JEFFREY SACHS (Director, Earth Institute, Columbia University; Author, "The End of Poverty"): A pleasure to be with you.

ROBERTS: To begin with, what essential role does the World Bank play in fighting global poverty?

Mr. SACHS: The bank was set up to provide finance, money, to help poor countries and originally, the post-World War II countries in disarray to invest their way out of disaster. The reconstruction phase ended decades ago, but unfortunately, the challenge of extreme poverty remains with us today. So the bank's main role is to help the poorest places in the world to make the investments, to get out of poverty.

ROBERTS: And Paul Wolfowitz' tenure was marked particularly by his concentration on fighting corruption. How important is that as a policy goal?

Mr. SACHS: Well, I think his period was basically a failure, but it continues a fairly long stretch of World Bank disarray. The bank is, I think, basically misguided for many, many years in failing to step up to core investments. It went off on many, many different angles - corruption crusades being one of them - rather than focusing on how to get the job done of the basic investments that desperately poor people need so that they will no longer be desperately poor, whether it's in roads, or electricity to reach villages or bed nets and medicines to fight malaria.

ROBERTS: So if Wolfowitz' successor veered from the anticorruption priority, that would not break your heart?

Mr. SACHS: Well, I think the key question is whether the World Bank continues simply parroting the ideology of the U.S. to privatize everything it can find to make the poor pay for their health or education, or to try to make roads, power, water, all private sector paying concerns, which is something that might make sense when you're a developed country to an extent, but it makes no sense at all when we're dealing with the world's poorest people.

ROBERTS: Well, then that begs the question whether the World Bank is relevant at all anymore. I mean, during the Wolfowitz brouhaha, there were murmurs from European countries that maybe they'd just bypass the bank and do it on their own. Could that happen?

Mr. SACHS: It will happen progressively if the bank doesn't change direction. The bank is potentially, extremely important. It still has the core need that it had when it was established way back at the end of World War II. But it's not doing a good job. And given the poor job it's doing, it is marginalizing itself. Part of the problem is that one president after another has not been properly trained and experienced in development.

Wolfowitz was an appointment that absolutely never should have been made. It's been one banker after another or one political crony of the president. And the result of all of this is that the bank has really lost direction and has most importantly been ineffective for many, many years.

ROBERTS: Do you think there was a time when they were more effective when they focused on larger capital projects?

Mr. SACHS: There was a time when the bank did better, but there has never been a time when the bank could potentially do as well as it can do right now. The tools - whether to fight hunger or to fight disease or to extend power, to expand infrastructure - are better than ever. So the potential to enable every place in the world stuck in extreme poverty to get out of the poverty trap is as strong as it's ever been.

And if the next bank president knows what he or she is doing, there is a tremendous opportunity to do good. If it's yet another political appointee without the background and experience, the bank will dig itself deeper into irrelevance.

ROBERTS: Jeffrey Sachs is director of the Earth Institute at Columbia University and the author of "The End of Poverty." Thanks so much, go catch your plane.

Mr. SACHS: Yeah, thank you very much. Great to talk to you.

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