The release of its World Development Report 2014: Risk and Opportunity (with the additional subtitle Managing Risk for Development) marks the 30th edition of an annual series launched by the World Bank in 1978. (Three of the 36 volumes covered a 2-year time span.) Over the years, with each edition devoted to a special developmental theme (augmented by a set of broad statistical data), the series has proved to be both widely used and, in many respects, deservedly useful. (A nontrivial virtue of the series is its complete online accessibility; go to http://wdronline.worldbank.org/worldbank/a/browsebytitle.) The highlighted annual themes have ranged across a diverse array of topics: health, jobs, gender equality, poverty, financial systems, and fertility, among numerous others. With explicit attention to overall environmental challenges in the 1992 World Development Report (hereafter WDR) and explicitly to climate in 2010, environmental aspects of development have begun receiving a respectable amount of exposure in the series. I'll turn to that next.
Emergence of Environmental Concerns
Unsurprisingly, in early editions of the WDR, environmental challenges were, at best, subsumed in exposition dominated by other issues. For example, in WDR 1979, with the oil-price turbulence still vivid and ongoing, the emphasis in a section on “The Outlook for Commercial Energy” is largely on substitution away from crude oil: “There are possibilities for increased use of oil substitutes, particularly coal and nuclear power, and, in the longer term, there is potential for resources such as shale oil, tar sands, and solar energy.”1
If environment took an understandable back seat in those early WDR years, its emergence as an important issue in the last two decades is unmistakable. The first major WDR focus on the issue came in its 1992 edition—“Development and the Environment.” That volume represented a milestone in framing environmental phenomena in conceptual terms—thus allowing them to be linked to mainstream policy analysis and disciplines (see Figure 1)—and exposed the WDR audience to 200 pages of key empirical connections between economic growth and environmental trends and risks.
Figure 1. Benefits and costs of policies for environmental protection. Policies and investments to protect the environment have widely varying benefits and costs.
The WDR homed in on environmental challenges still more pointedly by devoting its 2010 edition (“Development and Climate Change”) exclusively to the threat of global warming and to mitigating approaches for countering that threat. If a richly documented volume of 400 pages can be collapsed into a succinct, threefold set of alerts, the World Bank's message is loud and clear: (1) Poverty reduction and sustainable development remain core global priorities. (2) Yet climate change must urgently be addressed. (3) Economic growth is unlikely to be fast or equitable enough to counter threats from climate change, particularly if it remains carbon-intensive and accelerates global warming.2
Some Critical Observations
One could reasonably conclude that, going strong after three dozen years, the WDR series has successfully stood the test of time. With a well-written text—typically numbering hundreds of pages—lavishly enhanced by charts, tables, and boxes, there'd be no compelling reason to question that judgment. But it's also worth noting, as is obvious from each volume's “front matter,” that the series commands the input of a vast cohort of World Bank research staff and publication resources. Might it be unseemly to ponder whether an institution frequently pressed to impose cost-effectiveness criteria on the deployment of its lendable financial resources subjects an outreach effort like the WDR—valuable though it may be to freeloaders like myself—to similar criteria?
More importantly, and in spite of the obvious care taken to make the WDR a substantively rigorous and polished publication, one wonders whether, in such a large-scale process of assimilating and transmitting the views—in some cases, conceivably divergent views—of so many contributors, there'll be some homogenization of judgment, with the result of concealing or toning down potentially important lessons for development.
Indeed, to its own credit, the World Bank several years ago commissioned a study that sought a balanced critique of the WDR in its three-decade-plus period of appearance.3 The review is too extensive to detain me here, but several appended chapters by widely respected economists deserve brief mention.
Joseph Stiglitz (a former World Bank Chief Economist, now at Columbia University) had, while at the World Bank and in his own words, “responsibility, to varying degrees” for five different WDRs. His contribution to the critique was in the form of a lengthy essay in which, along with other observations, he faulted an aspect of the WDR that he believed made its analytical content too closely governed by received wisdom about economic institutions, theory, and prescriptive development principles—all at the expense of approaches more tailored to the experience and character of particular countries:
As each WDR went through the process of development within the Bank, difficulties were encountered. Many were uncomfortable with the ideas; many with the underlying economic analysis, which often exposed the limitations of models that had traditionally been relied on by those within the Bank; and many more were uncomfortable with the policy conclusions that emanated from the analyses. … [Controversies] were, perhaps, even more tense at the level of the [Bank] Board. We touched on raw nerves. For the first time, we began to question the positions taken by the United States or other Group of Seven countries. To me, it was clear: we were international civil servants representing the interests of the developing countries. Inevitably, that would sometimes go against the position of the United States, whose policies were often driven by special interests.4
For his part, Angus Deaton (Princeton University) describes an excessively conflict-minimizing and trade-off-avoiding WDR preparation process. His harsh critique:
Because the WDR is perceived as very important within the Bank, intense internal competition surrounds the choice of topic, with different groups jockeying for prominence for their own pet issue or research topic. This role does much to ensure the continuation of the reports and may be as important in doing so as any success in mobilizing global opinion and guiding strategy. The evidence that the WDRs have—or ever had—such influence is notably thin.5
The emergence of climate change as a critical scientific and policy concern of mankind doesn't relieve the World Bank of having to deal with many other important problems—whether environmental or otherwise. (And some of these problems are clearly cross-cutting: How should the bank deal with a loan request from a poor country committed to continued coal combustion?) So it is understandable that WDR 2014 deals only sparingly with global warming, devoting most of its attention to sectors of the economy—for example, financial institutions—whose risk management analyses and practices are weak. Still, there is so much about the climate threat that maps directly into the subject of risk and its management that it would have been helpful to have that aspect at least given some recognition in the volume. Consider just one case of climatic change in a risk management framework: the possibility of catastrophic climatic events and the choice of discount rates that facilitate a present-value calculus in policy approaches considering such events.
A relative newcomer to the world development scene will find in a typical WDR an admirably presented and broad-ranging coverage of many important topics. The environment in general and global warming in particular have been conscientiously taken up.
To a seasoned researcher, the WDRs, while still valuable, offer perhaps more of a “refresher course” on relatively familiar terrain rather than major breakthroughs. And yes, there are those nagging questions raised by critics. There's also the matter of excessive staff requirements and of production costs. And—with respect to environment and climate—it's possible that World Bank efforts duplicate what other entities are providing. Various international energy bodies and the Intergovernmental Panel on Climate Change (IPCC) come to mind. Maybe it would be wise for the World Bank to pause and reflect on some of these matters as it contemplates the future of the WDR. A well-designed survey among past and prospective users might yield useful insights. What it need not do is to feel apologetic for a record that, whatever its inevitable weaknesses, has undoubtedly been rewarding for many.
1. World Development Report 1979, 35.
2. For elaboration of the three points, see WDR 2010, xx–xxi.
3. Shahid Yusuf and others, Development Economics Through the Decades: A Critical Look at 30 Years of the World Development Report (Washington, DC: The World Bank, 2008).
4. Joseph E. Stiglitz, “The World Development Report: Development Theory and Policy,” in Yusuf, see note 3 above, 140–41.
5. Angus Deaton, “The World Development Report at Thirty: A Birthday Tribute or Funeral Elegy?,” in Yusuf, see note 3 above, 106.
Joel Darmstadter is a Senior Fellow/Resident Consultant at Resources for the Future in Washington, D.C.