Saturday, May 1, 2010

World Bank ... performance ... and metrics!

Dear Colleagues

I have followed the work of the World Bank for more than 30 years ... and tried to understand why so much intellect was producing so little global socio-economic progress. This led me to writing a book "Turning Development Upside Down" ... as yet unpublished ... which identified many issues, including in part, the tyranny of averages.

In my experience with corporate management information it was the ability to drill down to a "reality" that could be fixed that resulted in improved corporate performance. My experience taught me that good metrics helped change performance in a very impressive way!

The World Bank had a diametrically opposite approach. Their process was to have the detail, but then summarize it in ways that were easy to publish, easy to talk about at meetings, but totally useless for practical decision making that would get it right.

Over the last 50 years, much progress has come from science and technology where understanding detail is critical. I am constantly amazed at how much detail there is in science ... and how scientists build metrics around the details.

Meanwhile, in the area of public socio-economic performance and governance, an academic community has tried to work with macro measures ... and tried to apply statistical rigor, but in the process ended up with correlation that does not have much meaning. I will argue that making decisions in complex situation using weak statistical correlation is a "crap shoot" and therefore no wonder that decisions do so little good. What is needed is much more informed understanding of the complex dynamic of sustainable development ... more data ... less statistics. Practical cause and effect ... not statistical causality!

In the modern market driven capital markets, almost all the metrics that inform decision making about allocation of capital ... have created a bias towards big, in the main because the tendency is for big to be more profitable. But the metrics are wrong ... or inadequate. The metrics do not incorporate useful impact on society ... the changes in the value of the society ... the changes in the quality of life. While economics of scale may work for profit, the same dynamic is not at work in socio-economic value and quality of life. Small may be the optimum for value adding in society.

It will be difficult to change the World Bank. The World Bank is very large ... President James D. Wolfensohn used to talk about 10,000 people at the bank ... and they are very committed to their established processes and procedures. But all may not be lost!

Maybe ... just maybe ... if we can get the metrics of socio-economic progress changed so that there is as much about value as there is about profit, we will have change and progress.

This is what Community Analytics (CA) is all about!

Peter Burgess
This was posted in response to entries on a blog about the World Bank
Theworldbankunveiled's Blog
The World Bank and Transparency: A Perspective

Posted by David Ellerman on September 9, 2009
1 – The World Bank and Transparency: A Perspective

As the author of a new book, The World Bank Unveiled: Inside the Revolutionary Struggle for Transparency, I recount my dozen years inside the institution. I examine a number of aspects of the organization that range from its culture and bureaucracy to its day-to-day activities. Among the key questions the book analyzes is the meaning of transparency inside the Bank. In fact, my experiences suggest it means different things to different internal stakeholders and that these sensibilities are often conflicting and reflect a vast array of backgrounds. For example, in recent years the Bank merged a knowledge sharing mantra into a culture that horded information and it implemented greater disclosure measures that were often viewed by external observers as rhetorical flourishes.

When he left the Bank in 2005, former President James Wolfensohn said transparency reduces corruption, reduced corruption leads to better governance and better governance increases development. Transparency, he believes, is the key. But history suggests the Bank’s management believes transparency is something that should apply to its clients and other external stakeholders. Its enthusiasm regarding the internal application of transparency seems less than robust. Consider the following:

It has a long history of reluctance toward releasing documents external observers believe are central to helping foster development.

When its staff has gone public with views that counter the Bank’s traditional orthodoxy, they have been dismissed. Nobel Prize winning economist Joseph Stiglitz and William Easterly are two prominent examples.

In 1997, as part of its Strategic Compact reorganization, the Bank began to recast itself as a “knowledge bank.” It has not been a success because the cultural instincts of the institution favor information hoarding rather than knowledge sharing. The World Bank Institute, the branch of the institution charged with implementing knowledge sharing, is a pedagogical unit that promotes fostered learning. Former Bank economist David Ellerman’s insightful paper, Helping People Help Themselves: Toward a Theory of Autonomy-Compatible Help documents how fostered learning creates client dependency which diametrically counters knowledge sharing.

The World Bank Unveiled offers numerous other examples. But much more importantly are the perspectives of others who have worked inside or outside the Bank. This blog post wants to encourage others to share their own experiences and stories …
Previously I had responded to this as follows
Peter Burgess said, on February 2, 2010 at 7:45 pm
Dear Colleagues

I did my first World Bank assignment in 1978. Prior to this I had had 20 odd years of professional and corporate management experience. My first impressions were that the World Bank was doing important work, and doing it wrong, and in a way that was not making the best use of scarce resources for development. In subsequent years I tried to influence project design, and the whole project cycle so that it would be more effective … but met with extreme resistance. Part of my training included auditing … and when it becomes difficult to get answers, you know that there is something that is being hidden. In the case of the World Bank group there are many things being hidden, with these three of considerable importance (1) a complete failure to address the issues of corruption in all its manifestations (2) a failure to measure the performance of the projects and to take steps to improve performance; and (3) a failure to look inward at the high cost and poor performance of the World Bank as an organization, as well as the high cost/low productivity of staff.

Unless you have worked outside the relief and development sector, you cannot appreciate how poor the World Bank performance has been for several decades! There have been critics for a very long time, but rather little reform of any significance!

Peter Burgess
Community Analytics
and the author of the blog had responded in due course as follows
David Ellerman said, on April 30, 2010 at 4:12 pm
Please note that my aforementioned paper has now been further developed to book length and published as a paperback: Helping People Help Themselves: From the World Bank to an Alternative Philosophy of Development Assistance. Foreword by Albert O. Hirschman. University of Michigan Press. 2006. In a field better known for emotional appeals than intellectual analysis, the book tries to bring out the reasons why genuine development assistance (like many other forms of assistance or help) is much too difficult, subtle, and limited for a behemoth like the World Bank to do well so the result is much “unhelpful help.” Further research and comment is on my website: and blog:

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