News & Stories

Ian Solomon, U.S. Executive Director of the World Bank, Speaks at SIPA

Posted Mar 21 2012

Ian Solomon understands why people are skeptical of the World Bank Group. “When I was an undergraduate,” Solomon, U.S. Executive Director of the World Bank, told SIPA students, “I remember protesting the World Bank. I was very skeptical.”

On March 20th, Director Solomon spoke with SIPA students about how the World Bank has changed, and why it’s needed now. Touching on the institution’s history, its objectives, and some of its tensions, Solomon painted a comprehensive portrait of the World Bank as an institution with a key role in international economics.

The World Bank, Solomon explained, was established after World War II as a means of rebuilding the broken international economic system. As the decades passed, the World Bank shifted and expanded its mission from postwar rebuilding to addressing rural poverty, social issues, and institutional corruption. But over time, people began to question whether the Bank and the IMF were obsolete. “It was a real debate,” Solomon said, “but then there was the international financial crisis [of 2008], and these organizations were called upon to increase their activity.”

The Bank has thus become a powerful group of organizations working in international development. Solomon said, “It is the belief of the Obama administration that development is a moral, strategic, and economic imperative.” Countries in which the Bank works have seen drastic improvements in gender equality, access to education, hunger, and child mortality, but, Solomon said, “we are behind on maternal health.” Solomon emphasized the Bank’s desire to make growth sustainable. “We know how to get countries to grow,” he said, “but we still have a lot more to learn about how to make that growth sustainable. We also have not been doing as good of a job as we could to ensure that growth is distributed equally.”

So what problems does the Bank face? Solomon explained that the one thing both parties of Congress can agree upon is that the foreign aid budget should be cut. Other problems are more philosophical: how should the World Bank balance institutional versus development priorities? He said, “How do we ensure we do the things that work us out of business instead of perpetuate us?” Solomon discussed issues he struggles with, among them innovation versus control. He explained, “[as an Institution] we want control—we want to make sure there are no mistakes. But we also want to see great innovation.”

When the floor was opened for questions, one student asked how Solomon’s thinking has changed since he protested the World Bank as an undergraduate. Solomon emphasized the Bank’s changes, especially its increased transparency. He listens to those who now protest, believing that both the Bank and the protestors share the same goal. He added, “The Bank was not as sensitive to [political economy] issues as it is now. The Bank takes social services very seriously. It takes the issues of the poor much more seriously now than it ever did before… we are in good faith trying to improve the lives of the poorest.” As for how his own thinking has changed, he smiled: “Maybe I’ve just gotten older?”