World Bank Doubles Down on Its Fuzzy Math


September 27, 2012
John Fawcett, Legislative Director

 

Last week RESULTS released an analysis demonstrating that the World Bank had substantially recalibrated a 2010 pledge to increase basic education funding to poor countries by $750 million by altering the baseline year of the pledge. In a comment on our blog, the World Bank’s Director of Education, Elizabeth King, disputes our account. While Ms. King’s own dedication to education is unquestioned, arithmetic simply doesn’t support the World Bank’s explanation.

Here’s where we and the World Bank agree: in 2010 the World Bank pledged to provide an additional $750 million for education in the poorest countries by 2015. The key question is, in addition to what? That’s where the World Bank’s math gets fuzzy.

From public statements made by senior Bank officials at the time, it is clear that the $750 million was in addition to the $1.2 billion the Bank spent on education in 2010. But the Bank has subsequently claimed – and reasserts in its most recent response – that the $750 million is actually in addition to an average level of funding over 11 years, a much lower baseline.

In announcing the $750 million increase in 2010, then-Managing Director Ngozi Okonjo-Iweala said, “[t]his represents about a 40 percent increase in our basic education lending over the past five years for the poorest countries.”

With a bit of 8th-grade arithmetic, it’s evident from this statement that a 40 percent increase means the baseline was the 2010 funding level of $1.2 billion for basic education (don’t take my word for it – this report unpacks the math in exhaustive detail). Notably, there were no statements at the time in 2010 about the much-lower 11-year average baseline. That only showed up much later – and with much less fanfare – on the World Bank’s web site.

Okonjo-Iweala, the current Minister of Finance of Nigeria and herself among three finalists for the World Bank presidency, is a renowned economist of formidable intellect with degrees from Harvard (magna cum laude) and MIT. It’s unthinkable that she would casually toss out a mistaken commitment to a “40 percent increase in our basic education over the past five years” while speaking on behalf of the World Bank at a high-profile public event.  And yet that’s what the Bank’s assertion requires us to believe.

Now, let’s suspend disbelief just for a moment – chalk up Okonjo-Iweala’s statement to confusion or an egregious (if oddly precise) typo – and assume the Bank’s $750 million pledge was intended to be above the average funding level going back over a decade, as the Bank now claims. What does that new baseline mean for how much money the Bank has actually committed to providing for basic education?

Here’s where things get really strange: it means the World Bank could cut basic education spending by over $100 million per year and still meet its revised pledge.1 The Bank has taken a pledge to increase basic education funding and given itself permission to decrease funding.

So we’re left with two possibilities: either the World Bank altered its original pledge to make it essentially meaningless, or it made an essentially meaningless pledge to begin with. We think it’s the former, but neither of these possibilities are particularly encouraging for getting the 61 million kids currently out of school the quality education they deserve.

The new head of the World Bank, Dr. Jim Kim, has chance to set things right. Yesterday at the launch the UN’s new Education First initiative, Dr. Kim said, “education is not only a basic human right, it is a fundamental building block for development and integral for our collective efforts to end poverty and expand prosperity.”  We agree. And we urge the World Bank to demonstrate its commitment by upholding its original pledge to increase basic education funding.

 


1. Confused? Let’s try an analogy. You’re earning $40,000 per year, and your boss tells you because of the great work you’ve been doing you’ll be getting a $10,000 raise next year.  Congrats, you’re making $50,000 next year, right?  Not so fast. Your boss clarifies that the $10,000 raise is in addition to your average salary over the last decade. Since you started as an unpaid intern and worked your way up through the mail room, your average salary over 10 years is only $25,000.  A $10,000 raise means you’ll be making $35,000 – less than you’re making now.

 

 

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