World Bank fails to credit intelligence of poor

WHEN a report by the world's most influential development agency provides evidence that many of its staff are "biased" in their perceptions of the poor and their needs, one might expect eyebrows to be raised. When the president of that institution - the World Bank, no less - acknowledges the flaw and goes on to call for "measures to mitigate these biases, such as more rigorously diagnosing the mindsets of the people we are trying to help", jaws should be dropping.

One example of the bias uncovered by the report team is particularly striking. The authors conducted a random survey to examine "judgment and decision making" among World Bank staff. Nearly 5,000 were invited to take part in the exercise, of whom 1,850 actually did - about half each from headquarters and country offices. Participants were asked to estimate how many of Nairobi's poorest residents would agree with the statement that vaccinations caused sterilisation. The same statement was put to the residents themselves. The result was remarkable. Forty-two per cent of the bank's staff estimated that the poor would agree with the statement. But when the statement was put to the residents, only 12 per cent agreed.

A similar gap between the bank's assump- tions and actual responses were found in Jakarta and Lima. In this case, staff predicted that many more poor residents would express feelings of helplessness and lack of control over their future than actually did.

"This finding suggests that development professionals may assume that poor individuals may be less autonomous, less responsible, less hopeful, and less knowledgeable than they in fact are," the report notes.

Yet beliefs like these shape policy choices. And development professionals, the report makes clear, "are not always good at predicting how poverty shapes mindsets".

Not since the economist Peter Bauer delivered his critique of foreign aid 50 years ago, famously arguing that the process amounted to a transfer of funds from taxpayers in well-off countries to enrich an elite in poor ones, has the concept of foreign aid come under such scrutiny - and from such an authoritative source.

Yet reaction so far seems to have been a yawn of indifference and a shrug of the shoulders on the part of the rest of the multibillion-dollar aid industry.

The comments and conclusions not only raise questions about the World Bank's past performance, and the extent to which its projects have been flawed as a result of the bias of its staff.

It also raises concerns about the approach of other donor organisations and those thousands of non-government organi- sations that attempt to alleviate poverty in the world's poorest countries.

This 240-page study is not merely a theoretical treatise. It shows how insights into how people make decisions can have a wide-ranging impact, from helping households to save more, to reducing the prevalence of disease or increasing the efficiency of companies.

"Development professionals and policy makers are, like all human beings, subject to psychological biases," reads a key paragraph. "Government and international institutions, including the World Bank Group, can implement measures to mitigate these biases."

For one thing, it suggests that staff should work harder to understand the beliefs and preferences of the people they are trying to help. For another, it recommends introducing processes to ensure that, where biases remain, they do not filter through into the bank's decisions.

The consequences of bias are profound. The poorest in the world may be doubly burdened. Not only do they fight a daily battle against poverty. They may well have to cope with policies of well-meaning aid donors that owe more to the bias of those who frame them, than to the knowledge of those who are supposed to benefit from them.