The article ‘The World bank of the future’ gives an insight into the contributions made by the World Bank to the development of the world economy. It assesses the available means that can be used to eradicate poverty. As such, countries that defaulted payments should be offered funds with rational restrictions to avoid suffocating the countries’ economies.
This issue will allow for the restructuring of lending programs once such default reoccurs to complement the scuffled optimal plans. Also, the World Bank should promote the invention of economic ventures and investments, which increases its capital base. Such an initiative can be achieved by offering capital investment, such as infrastructure and information expertise needed to initialize these investments (Banerjee & Ruimin, 2010).
It could also utilize its advantages to pursue the creation of viable procedures that promote economic activities. The article also delves the procedures that the World Bank can utilize to improve efficiency in targeting its objectives.
A quasi-experimental design is used to conduct qualitative research of the overall credit allocation of funds to the countries. The authors used the loans lent to the market as a controlled variable, which enables them to hypothesize the market performance and estimate the effectiveness of the World Bank in carrying out its economic tasks.
The data used is not accurate due to the presence of biases in the selection of the sample countries and controlled variables used in the experiment. Such an issue may have altered the results obtained regarding the effectiveness of the World Bank in achieving its objectives through lending (Banerjee & Ruimin, 2010). The data does not give a true representation of the effectiveness of the World Bank through the different methods of lending.
This is attributed to an arbitrary sampling method adopted, which is contrary to the expected scientific random sampling method. Therefore, this research does not consider the pre-existing economic conditions of the countries selected, which may have affected in conclusion the effectiveness of the World Bank.
In many instances, the World Bank advocates for the best economic practices that effectively reduce poverty. Since major world policies favor the developed countries, the World Bank stepped out to use its expertise and negotiation power to offer terms favorable to the third world governments. Although the bank has been lenient on some defaulters, it has created a set of strategies targeted at one of the fundamental issues, which is poverty reduction.
This initiative was done by ensuring that information was effectively passed on through education, provision of means of communication and targeting the marginalized population (Banerjee & Ruimin, 2010). Participatory events were also set up to assess the poverty level and viable means of eradicating it, such as through micro-financing.
Several questions have been raised on the impact of the strategies used by the World Bank in the eradication of poverty. The management of lending defaulters and the discord with other lenders have been the main issue. Opponents argue that there should be a module to ensure punishment of defaulters because restructuring the loans would be detrimental to the borrowers in the long term.
The bank has provided clear-cut procedures to support bankrupt countries. The involvement of private sector lending in the eradication of poverty has affected the bank’s response during the evaluation of projects and is undertaken negatively. Questions posed to the bank include the way its rates are achieved and initiatives were taken to create an all-inclusive means to eradicate poverty.
Reference
Banerjee, A., & Ruimin, H. (2010). The World Bank of the Future, Economic Review 14(1), 39-44.