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Development and Poverty Reduction. Looking Back, Looking Ahead
James D.Wolfensohn, President; François Bourguignon, Senior Vice President and Chief Economist, The World Bank
Prepared for the 2004 Annual Meetings of the World Bank and IMF
October 2004

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Copyright ©2004 International Bank for Reconstruction and Development/The World Bank SKU 31858

Introduction
Development thinking and practice have evolved in ways that should be conducive to more rapid development, but the promise has yet to be fulfilled.Why? In part because of natural lags between thinking, practice, and outcome. But also because countries of the developed and developing worlds have not delivered fully on their commitments in their North-South development partnership.

The pressure to do better is growing. The global imbalances in the distribution of income and wealth are huge, and the awareness of these imbalances grows as information flows ever more quickly around the globe. People everywhere can compare themselves to the richest developed societies, and they are anxious to reduce the yawning gaps in income and consumption.

Failing to come to grips with these imbalances is bound to produce mounting dissatisfaction. But we face a window of opportunity, one that may not stay open. The opportunity is to put into practice what we have learned about increasing opportunity and reducing poverty, at a time when demographics, economics, and even geopolitics should make that possible.Not doing this will sow discouragement about development and progress in wealthy and poor nations alike-creating barriers to future development efforts, even feeding civil and international conflict.

What will it take to move forward? There is a real opportunity for improving the mechanisms of global governance, but this will take several years. In the meantime, there are tasks to be tackled with some urgency. In trade, developed countries must follow through on their commitments at the Geneva talks-to give developing countries greater market access. In aid, donor countries must scale up their assistance in ways commensurate with the Millennium Development Goals, reinforcing and accelerating the mild progress of the past two years. In governance, developing countries must continue to move toward greater accountability, transparency, and efficiency. And all countries need to work together to address such disasters as HIV/AIDS and climate change.

This paper provides the background for a call to action.

• Part 1 reviews the changes in development thinking and development practice over the past decade.
• Part 2 shows that development progress has been mixed-with fairly impressive global aggregates, with rapid poverty reduction and continued advances in social indicators, but with highly uneven distributions of those gains. And despite some progress on policy environments and aid flows, both developing and developed countries have failed to deliver fully on the commitments to extend these gains.
• Part 3 looks at the worlds of 2015 and 2030 and maps out a course for action in the next decade.

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