La Follette partnered with the Law School and the School of Business to host the World Bank’s Chief Economist, Dr. Indermit Gill for a campus visit. Dr. Gill gave a public presentation on the World Bank’s development work and met with undergraduate and graduate students for informal discussions. He was also generous enough with his time to sit down with the La Follette School for a Q&A. Here is part 2 of the interview. You can read part 1 here.
World Bank President Ajay Banga recently unveiled the Bank’s vision and mission to “create a world free of poverty – on a livable planet.” Can you give a high-level overview of this goal?
Soon after Robert McNamara became the president of the World Bank in the late 1960s, it adopted one overarching goal: to eradicate extreme poverty. There was a growing sense that while economic output had grown during the 1950s and 1960s, the world was becoming very unequal. Some parts of the world were being left behind. Even in countries that were doing well, poor people were being left behind.
All the things that I’ve talked about, macro stability, economic growth, investments in human capital– these are all successful ways to eradicate extreme poverty. During the 1970s, 1980s and 1990s, many countries—especially in East Asia, then the poorest part of the world—implemented these policies. Extreme poverty began to fall rapidly. In 1990, one of every two persons in the world was living in extreme poverty. 25 years later, the share was one in ten.
The concern began to shift to inequality, and the shareholders of the World Bank added a second goal of promoting a shared prosperity. Achieving the twin goals relied on country-specific strategies, and that was the strength of the World Bank in the sense that we worked with country programs. It was an effective way to work toward our two major goals: poverty eradication and shared prosperity.
Over the last decade we’ve realized that there are some things you can’t do just with country programs because some problems like climate change affect everybody but cannot be solved by countries acting by themselves. So President Banga has essentially added a third goal: looking after the planet while you’re addressing poverty and spreading prosperity? The first goal concerns poverty, the second prosperity, the third the planet. The difference between them is that while the first two require country-level investments and multilateral cooperation, the third also requires big global shifts in development policy with costs that will have to be made by the biggest polluters of the planet.
You were previously a professor at Duke’s Sanford School of Public Policy. Public policy and public affairs education seems to be having a moment right now. Why do you think that is?
I think it’s because of our successes in that a lot of countries have solved major policy problems. For example, I think in general there have been massive improvement in health policy, school enrollment and basic infrastructure across the world. But now we have even tougher problems like environmental harm, climate change, geopolitical fragmentation and risky new technologies, and the development strategies that worked—like freer trade and foreign investment—are becoming harder to implement.
These are trickier problems, and they require more thought. In other words, they require better public policy—both for domestic and international affairs. That’s probably why public affairs education is more popular than it has ever been.
What I believe is not quite right is a general presumption in public policy programs in US universities that policy solutions invariably involve more government. I think we should be looking for solutions that involve a good balance between public and private initiative. Schooling, healthcare, infrastructure, and climate action are all too big for taxpayers to foot the entire bill, so we must create incentives for private enterprise to make a profit while doing good.
I think the success of public policy in the US—as well as in other important countries like China and India—will eventually involve making government lean and focused. There is a great Chinese proverb that you should “govern a great country as you would cook a small fish: do not overdo it.” That should be the aim of public policy professionals in countries great and small.
What do you think the next generation of public policy scholars should be turning their analytical eyes toward? What has you excited about this next generation of policy analysts?
I think the next generation will have to deal with two or three fundamental truths. The first is that across the world governments have become much more indebted, so they’re going to have to focus on trying to get more from the public dollar rather than trying to extract more public dollars from taxpayers or from Nature. Take the US and the UK, for example. The public debt to GDP ratio is now greater than 100 percent. These ratios should be closer to 50 percent.
The second thing to remember that public debt is simply a claim on future economic output of an economy. If we want to repay our debts and if we want future generations to be at least as well off as us, economic growth is essential. The problem is that the capacity of economies to grow is set to shrink over the next decade. This has to be reversed.
Lastly, we have deal with issues of intergenerational inequity and climate change while looking after the least fortunate. The best measure of a society is how well it takes care of those who cannot take care of themselves. But you must do this a way that doesn’t saddle future generations with burdens they will not easily be able to bear. It is irresponsible to do otherwise, because we could make future generations poorer
Many of our students, especially those in the international public affairs master’s program, are eager to help tackle some of the same problems as the World Bank. What advice do you have for them?
I believe that if you want to contribute to international development, the best two places to work are either in a developing country or at the World Bank Group. The World Bank has an extraordinary agglomeration of talent, resources, influence, and connections. You get to meet influential people who make policies, while you’re young and have both strong ideals and fresh ideas. If you can convince them of a solution to problems they’re facing, you get to see your ideas and analysis in action. It is almost magical. And you get to do all this while you’re still in your thirties and forties.
How do you equip yourself to get a job at a place like the World Bank? You should have what we call a “T-profile”. A T-profile essentially means that you have a broad understanding of economic development issues—the horizontal part of the T—but you also have a technical or managerial specialization—the vertical part. A broad understanding of development issues is not hard to get, but a deep understanding of a particular discipline is much harder to acquire. But that is what will make you special.
The only advice that I would give people who want to work at an organization like the World Bank is to be persistent. I know several smart people who couldn’t get a job at the World Bank. I don’t know of a single unsuccessful person who was persistent. So, get that T-profile and then keep trying!