How The World Bank Could Succeed In Its Mission

1. How The World Bank CouldSucceed In Its Mission Allen Chao Ian T. Haufrect June 1, 2006

2. Overview • The World Bank’s Mission • Programs • The missing objective • Evidence this will reduce poverty • Implementation

3. The World Bank • http://worldbank.org/ • Primary objective: End world poverty

4. Organizational Objectives • Promoting growth to create employment opportunities • Helping poor people to take advantage of these opportunities www.worldbank.org

5. World Bank’s Mission • The World Bank is a vital source of financial and technical assistance to developing countries around the world • It’s mission is to reduce global poverty and the improvement of living standard www.worldbank.org

6. Program Objectives • End extreme poverty and hunger • Make sure all children receive a primary education • Promoting equal rights for women and give them power to help themselves • Reduce child death rate • Improve the health of pregnant women and mothers • Tackle HIV/AIDS, malaria and other diseases • Protect the environment and natural resources • Develop an international partnership for development www.worldbank.org

7. Missing Program • Primary Mission is to end world poverty • It is failing that mission • The main programs missing are FAMILY PLANNING to reduce unintended pregnancies and increase the average age of first pregnancy among women in poverty

8. Why will this reduce poverty?

9. Poverty Begets Poverty • Compared to children from non-poor households, it is mostly children from poor (<$1/day/person) households who are likely to dropout of school • Orphaned girl-children more likely to drop out of school than boy-children • Children born to married parents are not likely to drop out of school vs. children from single, divorced, separated, widowed and polygamous parents • Poor education is the main medium through which poverty is passed from one generation to the next Muyanga, Milu “Poverty Begets Poverty: Breaking the Vicious Poverty Cycle Via Education” Kenya 2006 www.iariw.org/abstracts/2006/muyangaa.pdf

10. http://www.guttmacher.org/pubs/journals/2804102.html

11. China as an Example • 1 child/married couple • Mandated and enforced by the government • Reduced the # of people living on <$1/day by 90 mil over a decade • This is a 39% reduction of poverty in China vs. the World’s 17% reduction from 1987 to 1998, and the Developing World’s reduction of 25% from 1990 to 2001

12. Supporting Thesis • Fertility decline would slow population growth in developing countries and thus reduce poverty • High birthrates create large numbers of children relative to the number of working adults • Underpowered women are often unable to act on their own behalf to obtain contraceptive services to regulate their childbearing http://www.guttmacher.org/pubs/journals/2804102.html

13. Further Reasoning • Children in large families perform less well in school and less well on intelligence tests than do children from small families • Children in large families also tend to have poorer health and lower survival probabilities http://www.guttmacher.org/pubs/journals/2804102.html

14. Steps of Poverty Reduction • Implement Family Planning Services • Birth control delays and reduces fertility • This reduces the ratio of youthful dependents to working adults which will increase developing countries’ human and physical capital • Invest the retained human and physical capital in national infrastructure and education to raise the living standard and transform the work force (EX: South Korea and Taiwan) http://www.worldbank.org/research/journals/wber/revsep98/pdf/article%203.pdf

15. Implementation Obstacles • Political • Religious • Monetary & Logistical

16. Political Obstacles • 184 member countries of the World Bank • Many, including the United States (the largest shareholder) would object to family planning objectives because of the association with abortion • It is so controversial that it is not even mentioned anywhere on the World Bank’s website • Non-coercive policies stand the best chance of gaining acceptance www.worldbank.com

17. Non-coercive Policies • Provide free passive birth-control • Provide free follow-up exams to minimize/eliminate side-effects • Provide monetary incentives in territories with high rates of women living on <$1/day

18. <$1/day Poverty Rates by Region • 1.1 Billion people total in 2001

19. Religious Obstacles • Religious organizations may object and advise (command) followers to reject family planning • Clinics receiving family planning funds may be the target of religious fundamentalist attacks

20. Monetary & Logistical Obstacles • Costs of passive birth control Implanon: Cost approx $117 99.9% Effective for 3 years Mirena: $175–$500/ exam, insertion, and follow-up visit >99% Effective for 5 years • Estimate $200 per person for birth control with all costs (implantation,marketing, etc.) www.plannedparenthood.com

21. The Cost • 1.1 Billion people live on less than $1 per day • Approximately ½ are female • Average life expectancy approx 50 years • If family planning starts at age 12 and is subsidized through age 21 (ten years): • 1.1B * ½ * 1/5 = 110 mil • 110 mil * $200/person = $22 B • Assume this amount is only spent every 4 years = $5.5 B / year

22. Comparative Numbers • The World Bank sells about $12B in bonds per year • Their operating income is about $1B per year • As of June 30, 2005, they had $138 B in outstanding loans The World Bank’s 2005 Annual Report

23. Considerations • Childhood poverty and a single-parent household are among the strongest predictors that a child will have a criminal future • As the numbers of people living below $1/day falls over the following 2 decades after implementation, the need for these family planning services will decrease, and so will the cost of providing them Levitt, Steven J. and Dubner: Freakonomics 2005 p138

24. Conclusions • The World Bank is failing its mission to end world poverty • Family Planning Services will best accomplish the World Bank’s mission • Cost is attainable • Political and Religious objections are the main obstacles