In 1996, James Wolfensohn, then President of the World Bank, called for the World Bank to become a Knowledge Bank. Production and provision of knowledge - used to design, justify, plan and support policies, programs and projects all over the world - was not new for the Bank. Wolfensohn formally recognised this 'other' side of the Bank to be as important as its financial side.

In India, the latest country assistance strategy (CAS) that defines the Bank's approach to lending for the three years 2005-08, says:

"Three Strategic Principles will underpin the Bank Group's work: (i) focusing on outcomes… (ii) applying selectivity…and (iii) expanding the Bank Group role as a politically realistic knowledge provider and generator."

Creation of Intellectual Support for Privatisation and Globalisation

Why is the Bank giving so much importance to the creation and provision of knowledge? Ostensibly, it is to better tackle the challenges of global poverty eradication and improving people's lives. However, there appear to be other reasons.


"Enormous problems can occur when not-very-robust research results are sold as irrefutable truths to the countries in the form of policy advice, technical assistance or as part of the conditionality of the lending programs…"

Independent Evaluation of World Bank's Research by a distinguished panel from academics at Princeton, Harvard and MIT.

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It is an open secret that the World Bank directly intervenes in the policy making processes of the countries to which it lends money. In the last 15 years or so, the Bank has been pressurising governments along the path of Liberalisation, Privatisation and Globalisation (LPG), forcing open more and more sectors of the economy to global private capital. Simultaneously, it has been pushing for the 'commercialisation' of these sectors, that is, the operation of these sectors as a market, so as to create an enabling environment for privatisation.

There is tremendous accumulating evidence that the policies are harming the poor and destroying the environment, and they are facing wide-spread resistance. The Bank is therefore under increasing pressure to present justification for these policies. The Bank is doing this through the use of knowledge - in effect, the creation of 'intellectual' support to build up the rationale and justification of privatisation and globalisation.

Where is the knowledge produced

The Bank is recognised as the biggest research institution working on developmental issues. It generates two kinds of knowledge: one, what it calls research. This is work that is more academic in nature and has broad applicability over countries and sectors. The other is the economic and sectoral work that is more of applied knowledge.

The Bank budget for research is about US$ 25 million, and an additional US$ 20 million spent on statistical capacity building. Bank researchers and their consultants produced nearly 4,000 papers, books, and reports between 1998 and 2005 including more than 2,000 articles in peer-reviewed journals. In addition, the World Bank publishes two peer-reviewed research journals, the World Bank Research Observer, and the World Bank Economic Review.

In addition to research, the Bank produces enormous amounts of knowledge in its economic and sectoral work, technical assistance, country level assessments, project preparation studies, project evaluations, capacity building work and so on. Considering that in 2004, the Bank was involved in about 1500 active projects we can see the extent of the project related knowledge generated by the Bank.

As important as the Bank's in-house system are the many and extensive linkages and networks that the Bank has created with external researchers, research institutes, professionals and others. Some - like the Consultative Group on International Agricultural Research (CGIAR) with its 15 research stations - predate the Knowledge Bank. Others, like the Global Development Learning Network (GDLN), a partnership of over 120 learning centres in nearly 80 countries around the world, are more recent.

The World Bank Institute (WBI), founded by the Bank in 1955, is one of the Bank's capacity development instruments. WBI delivered more than 700 learning activities to some 75,000 clients, and awarded 211 scholarships in fiscal year 2007. WBI has representation in the field in Burkina Faso (a landlocked nation in West Africa), China, Egypt, Ethiopia, France (Marseilles, Paris), Ghana, India, Nigeria, Senegal, Tanzania and Turkey.

The knowledge producer in India

In India, the Bank produces knowledge in the form of short pieces of sector work to formal pieces of analytical and advisory work, technical assistance, conferences and workshops. Apart from these, knowledge is also being created in the form of project preparation studies, studies undertaken as part of project implementation and assessment on project completion.

In terms of policy impact, by far the most important are the thematic and sectoral studies, called AAA - Analytical and Advisory Activities - in Bank parlance. For the years 2005-08, the Bank planned 22 major studies to be undertaken. These include studies like Land Issues for Growth, Strategic Issues in India's Water Sector, Agricultural Marketing and Value Chain Development, etc.

Technical assistance (TA) is another important knowledge generation method, used mainly to promote LPG type reforms. Examples include analytical and lending support to Public Private Partnerships, TA projects in agribusiness, regulatory reforms for private sector development in Orissa, technical assistance on resettlement and land acquisition policies etc.

A significant part of the knowledge generation work is carried out by the Bank in collaboration with other multi-lateral or bilateral aid agencies like the Asian Development Bank (ADB), UK Government's aid agency Department for International Development (DFID) etc.

Significantly, at the central government level, the Bank's knowledge activities in India focus on creating an environment conducive to LPG reforms, while at the state level they take the form of dialogue on cross-cutting reforms which include analysis of the major reform areas.

Flawed knowledge

Unfortunately, the knowledge created by the Bank has several serious flaws. The process of generating this knowledge excludes common people and their traditional expertise and knowledge. The knowledge is created mostly by highly paid, often international consultants. Knowledge creation is mostly directed towards arriving at a pre-determined set of policies - the LPG package. Information, evidence or experiences that do not support these pre-determined outcomes are ignored. All this makes the policy influence of the Bank's knowledge activities a serious cause for concern.

I have been involved in a study that is tracking how the Bank is producing and using knowledge in the water sector. The study reveals all the above flaws. One example is presented here.

Example: Using Knowledge to Push Privatisation in Water Sector

In 1998, the World Bank brought out a comprehensive and wide-ranging review of India's water sector - called the India Water Resources Management Sector Review (Water Sector Review 1998). This review is a remarkable demonstration of the use of knowledge to influence policy.

The Water Sector Review 1998 makes a strong push for privatisation, or Private Sector Participation (PSP) in the water sector, especially urban water sector. Among the three key elements of the recommended strategy is "Commercialisation of urban water supply providers and private sector participation". It also stresses that "It is important to dispel the misconception that PSP will affect the poor adversely", and then brings in its 'knowledge' of international experience to support this - knowledge that turns out to be seriously unsound.

The Review claims that "Efficiency gains from private participation reduce tariff" and says that water tariffs in Buenos Aires reduced by 17% on privatisation. However, it fails to mention that prices were hiked steeply before privatisation - but after the decision to privatise has been taken - allowing the private company to offer a 'manufactured reduction'. In real terms the prices went up by 20%.

It also gives the example of Metro Manila where privatisation is stated to have led to "50% reduction for half the city and 75% for the other". However, this conclusion was highly premature and untested as the project had barely started operation when the Bank report was prepared. In fact, soon after the operations began tariffs started rising sharply. By 2003, tariffs had gone up about 500%.

Interestingly, almost all the projects that the Bank presented as successes in the Water Sector Review 1998 and used to justify introduction of privatisation in India subsequently collapsed and the private players exited - Trinidad in 1999, Manila (West) in 2002, Puerto Rico in 2003, Buenos Aries in 2005.

An independent evaluation

These cases are not merely anecdotal. Rather, they are typical of the way knowledge is produced and used by the Bank.

Recently, the Bank commissioned an independent evaluation of its research by a distinguished panel from academics at Princeton, Harvard, MIT etc. (The Bank has a policy of carrying out assessments and evaluations of different parts of its work at regular intervals. Often, these are carried out internally, but sometimes the bank also commissions external agencies and researchers.) The Evaluation, published in 2006, had substantial praise for the Bank's research, but it also has very serious criticism.


    "…in some cases strong policy positions have been supported by … (non) evidence…..and the panel believes that, in some cases, the Bank proselytized selected new work in major policy speeches and publications, without appropriate caveats on its reliability. "One criticism that was made repeatedly is that research tended to jump to policy conclusions that were not well-supported by the evidence." Importantly, according to the Evaluation, "the area with the most widespread and troubling issues" was:

    "Enormous problems can occur when not-very-robust research results are sold as irrefutable truths to the countries in the form of policy advice, technical assistance or as part of the conditionality of the lending programs…"

Challenges and concerns

Not only is the Bank's knowledge often flawed, it also fails - with widespread destructive and traumatic impacts.

In September 2004, John Briscoe, Senior Water Adviser, World Bank made a presentation on behalf of the Bank to the International Water Association's World Congress at Marrakech. Among other things, lamenting the lack of adequate investment in water infrastructure in the previous decade, he said that "The last decade has been a lost decade [partly] due to the naïve view that the private sector will take care of the infrastructure."

A decade lost, trauma for millions - yet, the policy advice of the World Bank, and the knowledge on which this policy advice is based, still holds sway. How?

Apart from the Bank's huge financial muscle, one of the reasons for the domination and hegemony of the Bank's knowledge is the vast networks it has created for generating and disseminating knowledge - networks that draw in people from research institutions, academia, professionals, NGOs and bureaucracy in many countries, helping it penetrate national knowledge production systems. A related phenomenon here is the so-called 'revolving door' wherein middle or high ranking bureaucrats are offered deputation or short / medium term assignment with the World Bank.

For those who are a part of the Bank's developmental networks, or of the revolving doors, generating knowledge that goes against the grain of the Bank's thinking is not likely to be very remunerative. A particularly interesting article on this issue is 'Research, knowledge and the art of "paradigm maintenance"' by Robin Broad, a professor of international development at the American University in Washington, D.C. In her article, Broad talks about the very high salaries and fees that staff and consultants get at the World Bank, and then says that deviating from World Bank-type research can be very costly for staff or consultants. Broad uses a very interesting term for this, "golden handcuffs". The detailed article was published in Review of International Political Economy, August 2006. A shorter version of it is available at the website of the Bretton Woods Project.

These networks are a means to building long lasting institutions that legitimise, replicate and perpetuate Bank style research, ultimately leading to internalisation of such methods and such knowledge.

One of the key functions of the Bank's knowledge has been to create the TINA myth - There Is No Alternative. No alternative to these policies, no alternative to the knowledge created by the Bank. Therefore, it is a challenge for the citizens of India to break the hegemony of the Bank on knowledge production, to liberate the process from the control of the elite.

Making this suggestion is not to romanticise 'local and traditional knowledge'. We need to understand its strengths as well as limitations. But we also need to apply skepticism to 'expert' knowledge. Equally important, the process of knowledge creation needs to be detached from the interests of excessive profits, and needs to be reformed to address issues of common good, equity, justice, environmental sustainability.

Ultimately, it is about controlling our development process. Control is the key reason the World Bank is placing so much importance on being a Knowledge Bank. As the Independent Evaluation of the Bank's Research states:

    "As is well known, there is an on-going effort to reposition the World Bank as the 'Knowledge Bank,' with lending operations playing a reduced role, and the Bank playing a more important role as a source of policy knowledge. In many ways this is responding to the changing demand for the Bank's services. We already see that a number of middle income countries like Mexico, or even countries approaching middle income, like India, either do not really need the Bank as a lender or are moving in that direction."

The Bank is preparing for the future. Are we?