The World Bank

First the mutiny, then the silver

An impressive bounty for the new skipper of a troubled ship

WHEN sailors turn on their captain, it often ends badly—in shipwreck or retribution. But the World Bank, whose staff rose up against their leader in the spring, has just hauled in some treasure.

On December 14th, after nine months' haggling, it convinced 45 countries—including unlikely benefactors such as China, Egypt and Latvia—to give it over $25 billion, to be bestowed on the world's poorest states during the next three years.

That is 42% more than the bank drummed up the last time round, and comes on top of $6.3 billion to compensate it for the loan repayments it lost as a result of debt relief. At a time when the IMF, a sister institution, faces big job cuts, this infusion of funds was a triumph for multilateralism. It was also a victory for the bank's new president, Robert Zoellick (pictured above), who replaced Paul Wolfowitz in July. A confident technocrat, he has reassured Europeans who were unnerved by his neoconservative predecessor's political baggage and lack of direction. Germany, one of the leaders of the spring putsch, stumped up $2.2 billion, and Britain, which pledged $4.3 billion, became the bank's biggest single donor.

Mr Zoellick had raised the ante in this funding round by contributing $3.5 billion to the pot from other bits of the bank's empire. Rather than relending that money to middle-income countries or investing it in the private sector, Mr Zoellick chose to spend it in countries whose annual income per head is less than $1,065.

In some ways, the bank's prospects may have benefited from tumult at the top. Europe's policymakers worked hard to oust Mr Wolfowitz. Why bother, if they were not ready to back his replacement?

Still, Mr Zoellick's pitch in the beg-a-thon differed little from his predecessor's: the bank mobilises common funds for common aims, as Mr Wolfowitz put it. In a world of more than 280 donors (from the Desert Locust Control Organisation for Eastern Africa to the International Potato Centre), international aid is a fragmented business, putting it mildly. The bank says it can hold it all together.

For example, on December 13th the bank approved a project to lay and repair rural roads and bridges in Afghanistan, which often succumb to snow, rain or landslides. Afghan reconstruction is supported by a multilateral fund, administered by the bank. All neat and tidy. But funds for road-building also arrive from the Europeans, the Japanese, the Americans, the British and even the UN's Counternarcotics Trust Fund. The road project's prospectus bemoans the “large numbers of donors and NGOs chasing projects and government attention”.

Too true. Tanzania got 542 donor visits in 2005; Vietnam had 791, more than two a day. By pouring money through a shared conduit like the bank, donors make fewer demands on weak local bureaucracies. The OECD, a rich-country club, says the bank is less of a nuisance than some donors: less prone to split aid into tiny projects, or to bypass a government's own budgetary systems.

The bank calls itself a common “platform” from which others can operate. But such modesty conflicts, at times, with a need to find and advertise success stories. One such tale is a project in India's Karnataka state, which has helped farmers to make dams, collect rain and protect soil from monsoons. The bank says these efforts have raised crop yields by 24% and household incomes by two-thirds; they have also yielded some nice images of sapling mango trees and flowering jasmine.

But the bank is still struggling to gauge the real impact of its work. It can say it built or repaired over 22,000 classrooms in the 12 months to June, but it can't tell how much children are learning. So the bank wants to improve its own indicators: the Afghan project, for example, will judge its success by whether the price of commodities in village markets falls to within 15% of town prices. But the bank's recent woes have slowed the drive for closer self-scrutiny—a need that may well grow as it is called on to oversee projects that are supposed to conserve carbon (see article).

The bank is happy when cash flows smoothly from taxpayers, through its coffers, to the governments and projects it supports. But sometimes development is better served by restraint than by largesse. Free money can stifle a country's own tax-raising efforts—and private enterprise. It can also underwrite misgovernment and malfeasance. The bank's staff and shareholders balked when Mr Wolfowitz shifted course to focus more on corruption. After that experience, will their new helmsman ever dare to rock the boat?