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How to fix the World Bank--in 1981

Always seeing ways to make the world better, I didn't hesitate to put my reform proposals in writing. I don't remember when I first conceived the notion that both the IMF and the World Bank could be more effective if one of them moved out of Washington DC. In this essay, the idea of moving the World Bank appears as a passing reference in the third paragraph from the end.

Amusingly, this 1981 essay begins by referring to the IMF and World Bank as "Tweedledee and Tweedledum", implying that they are inseparable. Twenty-five years later I would refer to them as "conjoined twins", implying that they would have healthier lives after being separated.

This essay is actually more radical than my more recent essays about the Fund and the Bank because it proposed, in effect, handing over the reins of the Bank to the low-income countries that were its major borrowers. The provocative argument was that, with these countries in control, the reformed World Bank would probably make a lot of mistakes, meaning a lot of bad loans. But over time, the mistakes would be object lessons that produced a lending program less driven by the constantly changing priorities of the rich countries and therefore producing much better development outcomes.


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