The Leap Blog: IMF and World Bank : Where do India's interests lie?
While I agree with most of what you say with respect to India, I am not sure why if the World Bank knowledge sharing doesn't work on Indian projects, they are any more likely to succeed in other troubled countries. The WB bureaucrat will still sign that paper and not bother to follow up or implement best practices.
I am sure it will make everyone feel good that someone is helping to generate the global public goods. But that someone is not (and has for the most part never been) very good at it.
The current global institutions like the UN and WB have proven time and again as useless institutions (or at worst perpetuating problems perennially). But still we pay homage.
My guess is that in troubled countries like Nepal and Afghanistan, the most obvious and basic inputs brought by the World Bank would be a step forward when compared with what the locals are doing by themselves.
In the context of India integrating further into the global economy, it should strive to strengthen the multilateral institutions and assume greater responsibilities. Making judgments on the efficiency and/or relevance of an institution based on the failure of one project is misguided. There is a lot of cross-country expertise at these institutions that can be gainfully used, including in the Indian context, and I beg to differ from some of the rhetoric.
I'm all for more knowledge inputs and more study of international experiences. But does that require a bundling of loan + knowledge? And, is the commercial banking crew of the World Bank the best equipped do knowledge inputs?
My counterfactuals would be as follows.
2. Suppose an Indian effort unbundles the debt from the knowledge. Suppose debt is obtained by open competitive bidding and knowledge services are obtained by open competitive bidding. If the World Bank is the best source of the knowledge, sure, it should get the knowledge services contract, but this doesn't *have* to be the case.
3. In a lot of situations, project structure in India tends to have too much debt and not enough equity. The World Bank's financial model is not equipped to do equity, so there's an undue emphasis on leverage. This is not necessarily optimal.