And what the Bank has lost in this calculus is the protection of human rights.
Human rights are inextricably linked to the Bank’s mission and critical for the agency’s legitimacy, and yet internal obstacle after internal obstacle has marginalized the issue. In order for the Bank to effectively respond to pressing development challenges abroad, Kim must first show leadership on this challenge at home.
If Kim gets it right, the collision between new Bank leader and old Bank culture won’t be pretty—but it will set in motion the only organizational shift that could make the World Bank successful at reducing poverty worldwide.
No, it won’t be pretty. And it also won’t be easy.
A major institutional obstacle is the staff incentive system that emphasizes lending targets rather than results on the ground. Staff members are not held accountable for the detrimental social and environmental effects a loan can have long term on communities. Currently, rather than being promoted based on the quality of their projects’ effectiveness, World Bank employees are instead rewarded based on the sheer quantity of loans they get approved.
Another internal obstacle is a clash between experts within the organization. While the 10,000-plus employees come from a variety of professional groups, it is the economists who dominate the Bank—not in terms of their numbers, but in terms of their status within the hierarchy. Economists are often appointed to the top management positions and are considered the intellectual leaders of the institution.
As a result, non-economists have struggled to elevate issues such as human rights that cannot be easily quantified. Based on more than 70 interviews with Bank officials and fieldwork over a span of four years, I found that many employees do not treat the protection of human rights as a valued priority but rather as a costly burden that inhibits the Bank’s business of lending.
Yet for an institution committed to poverty reduction, it is unacceptable that the Bank has done so little in the area of human rights.
If the Bank finances projects that hinder the rights of the vulnerable in a country (the Yacyretá dam project, for instance, forcibly displaced over 50,000 people in Argentina and Paraguay) or channels investments to state governments that do so, the Bank harms its own reputation and relevance as a global leader in fighting poverty. Not to mention, it compromises the outcomes of its projects.
Despite the Bank’s rhetoric that protecting human rights is critical for development, its employees do not consistently take human rights into consideration in lending. Many employees even consider it taboo to discuss the topic in everyday conversation.