World Bank and Rural Development by Steven Kyle

This one is by Steven Kyle:

It was reported yesterday (See here) that the World Bank’s work in rural Africa has not yielded good results. This is a bit misleading – Though I wouldn’t want to disagree with this statement, it would be more accurate to say that the World Bank hasn’t generated much in the way of results in rural Africa because the World Bank has retreated from any major effort to achieve those results in recent years.

A quick look at the Bank’s own website reveals that out of 251 loans and credits to date in 2006 only 24 were for the purpose of Agriculture and Rural Development. Of these 24 only 11 were for countries in Sub Saharan Africa. Even granting that this figure only represents projects initiated in 2006 it is still obvious that rural development is not a primary focus of World Bank lending. Rather, as stated in the article, emphasis has been more on education and combating corruption.

These are certainly worthy goals – but the Bank’s retreat from agriculture over the past decade or so is the result of several different forces – one is the dismal performance of many rural development efforts in the past but another is simply the fact that rural development is difficult and time-consuming so that even if there are positive results they aren’t seen within the 5-7 year span of most projects. Another factor which is not so fashionable to point out is that there are quite a few Sub Saharan African countries where growth in agriculture is never going to be all that great because the countries involved are located in deserts where it seldom rains and soils are poor. Yet another is the fact that agricultural development, unlike some other activities with more of a public good nature, is not best done by bureaucrats in capital cities. (Just look at the disaster the centrally planned economies made of agriculture – The World Bank is not alone in this problem)

The World Bank is as prone to fads and cycles as any other organization. The problem with relegating rural development to a second tier status is that in many parts of the world that’s where most of the poor people are. Depending on whether you believe the World Bank is a useful participant in trying to promote rural development, we should hope that agriculture will be the target of renewed interest in the future.