Put the Bank to the Test
On June 1, former Deputy Defense Secretary Paul Wolfowitz became the next head of the World Bank. His mission: to end global poverty. The trouble is, few agree on how to go about it. So Foreign Policy asked five of the world’s leading development experts to offer Wolfowitz some free advice on getting the job done.
The World Bank budget represents a trivial share of what is spent on development programs worldwide each year. The major share is accounted for by the budgets of the developing country governments. If the bank is to have any significant impact, it must become the knowledge bank that outgoing President James Wolfensohn wanted it to becomea credible source of information that governments can draw on when designing their policies.
But the only way the World Bank can deliver concrete, impartial advice on what works and what doesnt is by putting promising ideas to the test. By finding out whether specific programs, if correctly implemented, have the impact they were designed to have, the bank can build up a menu of options for governments to choose from.
Unfortunately, finding out whether a program makes a difference is not easy. The best way to test a programs effectiveness is to follow the example of drug testing, by randomly selecting the beneficiaries of a new program in a sample of equally deserving individuals or communities. It is the only way to be sure that differences in outcomes between beneficiaries and non-beneficiaries are really due to the program. Randomization takes the guesswork out of evaluation and makes them unbiased and transparent.
Impact evaluation is not merely a way to hold the bank accountable; it is also a global public good. As an international organization charged with fighting poverty, the World Bank should devote meaningful resources to fund randomized evaluations, ideally in conjunction with other private, public, and international donors, and create an innovation fund devoted to such evaluations. Just as randomized trials revolutionized medicine in the 20th century, this is Paul Wolfowitzs opportunity to revolutionize development policy in the 21st century.