Angus Deaton does not like aid-but he likes the World Bank of 1996

In a long interview with the Swiss Neue Zuercher Zeitung (NZZ) (in German) Noble laureate Angus Deaton confirms that he does not like aid.
But one paragraph struck me as so remarkably anachronistic that it seems worth discussing it a bit further:

Some of the better World Bank staff say "We know how to build accountable institutions. If a country wants to have them, they can ask us for advice". Maybe that is a way to really help.
Q: That would be a new role for the World Bank.
Yes. I think the World Bank should become a huge consultancy firm that should collect the immense knowledge about development that has been accumulated over decades. They have many great professionals who know how to build damns or privatize water suppliers. If a government wants o undertake such a project, they could ask the World Bank what works in other countries and what does not. This would avoid errors. And rich countries could pay for such consultancy services. But today's World Bank can only offer advice if a country takes out a loan with them.
WOW. Where to start? I mean Angus Deaton has been at Princeton for almost 35 years and is the winner of a Noble price in Economics.
Well, a good place to start is a paper on the website of the World Bank, The Evolution of the Knowledge Bank by Don Cohen and Bruno Laporte from 2004:

In 1996, World Bank president James Wolfensohn announced a change in the way the bank would accomplish its unchanging mission of reducing global poverty. He contended that the bank should become a knowledge bank, as focused on disbursing the knowledge assets poor and developing countries needed as it was about providing economic support for development projects.
I am also not entirely sure that 'building dams' and 'privatizing water utilities' are necessarily the projects the Bank should be most proud of.
Let's not get into all the details, but even officially the World Bank acknowledged in 2015 that there have been 'problems' with resettlements in World Bank-funded large infrastructure projects such as dams.

And what about water privatization? Well...

But water privatisation has been politically hot since Britain became the first and only country to sell off its entire water industry in the 1980s. Many IFC projects have been opposed by coalitions of political and environmental groups amid fears that market water prices would increase way above what the poorest could pay. Since the early 2000s, political anger has mounted with the result that far fewer water projects have been proposed, and many fewer people have been connected to clean water than the World Bank and G8 countries might have expected when the the millennium development goals were signed in 2000.
We could discuss this in much more detail, but sufficient to say Deaton who briefly worked for the Bank during the Reagan administration outlines a World Bank '1.0' that does not correspond with the current debates around this institution or global development banks more generally.
But what does the World Bank actually offer these days?
We offer support to developing countries through policy advice, research and analysis, and technical assistance. Our analytical work often underpins World Bank financing and helps inform developing countries’ own investments. In addition, we support capacity development in the countries we serve.
So it is a bit more complicated than just being able to access advice only if you take out a loan with the Bank.

I understand some of the simplifications that such an interview necessarily has, but for someone who is often labelled one of the world's most pronounced aid critics, talking about an institution such as the World Bank like it is circa 1996 is quite disappointing and does not take debates about aid any further in 2016.


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