Arvind Subramanian says we should reorient the World Bank towards public goods:
It is awfully hard to find evidence that traditional World Bank–type aid works. In a series of papers, Raghuram Rajan, former chief economist of the IMF, and I were unable to find any positive effects of aid on long-run growth but did find evidence consistent with some of the negative effects of aid in depressing manufacturing exports and worsening domestic institutions.
On the other hand, it is widely accepted that some of the biggest contributions to development have come from global public goods such as the green revolution and medical breakthroughs, especially related to the development of antibiotics and vaccines…
India should rather put forward a new vision for the World Bank, with a central focus on global public goods, a point also emphasized and elaborated by Devesh Kapur, the author of the definitive history of the Bank. Nancy Birdsall of the Center for Global Development and I have argued that the governance structure for global public good activities should be quite different from current arrangements. This could be the thin end of the wedge for perhaps eventually breaking up the World Bank into two institutions: first, an aid agency devoted to traditional lending activities that could continue to be dominated by the G-7; and second, a new institution that focuses more on the creation of global public goods, one in which middle income countries such as India, China, and Brazil could start making greater financial contributions and, in return, obtain commensurate power and influence.