The World Bank Is Remaking Itself as a Creature of Wall Street

Jim Yong Kim, the World Bank’s president, is
trying to revitalize a hidebound institution.
But his embrace of Wall Street is controversial.

.. provides cash to companies in exchange for equity stakes, the World Bank currently drums up more than $7 billion a year from the private sector to invest in ventures in the developing world. Mr. Kim wants that figure to increase eventually to $30 billion.
.. The World Bank promised to protect investors against some losses.
.. those benefiting from the World Bank’s lending practices were “the people who fly in on a first-class ticket to give advice to governments.”
.. The argument was that growing investment flows into developing countries rendered World Bank lending mostly superfluous.

.. Last year, the World Bank dispensed $61 billion in loans and investments. By contrast, investors now inject more than $1 trillion a year into emerging markets

.. In effect, he was pitching the bank’s services as a middleman, ready to back projects with guarantees and other incentives. No longer could the World Bank be the sole provider of loans, which, he said, are “crowding out” the private sector.

.. the World Bank economists whose pay is tied to how many loans they churn out

.. “One of the most difficult things to do in a large bureaucracy is to change incentives,

.. “And if you have a large bureaucracy full of economists it is especially hard, because it turns out that economists really hate it when you change the incentives.”

.. On Wednesday, the bank’s top economist, Paul Romer, abruptly resigned.

.. His end came after he claimed, in an interview with The Wall Street Journal, that the World Bank’s closely-watched report on business conditions in different countries had been altered for political reasons.

.. the bank tends to see private sector solutions — those involving the profit motive — as morally questionable.

.. World Bank staffers are used to talking to governments, and now they have to leverage the private sector? It is a different skill set, and flexibility is not the hallmark of development institutions.”

.. “He had to work against his own incentives,” Mr. Kim said, referring to the bank’s practice of rewarding staff for loans. “And that is part of the institutional problem here.”

.. “He has pursued a strategy of making himself popular in Davos by attacking the organization and its staff,” said Lant Pritchett, a retired World Bank executive. “It is this idea that his hand has been hampered by bureaucratic machinations. That may be accepted in Davos — but it’s completely false.”

.. His biggest coup was working with Ivanka Trump

.. They eventually settled in Muscatine, Iowa, where Mr. Kim was a high school quarterback before going on to Brown and securing advanced medical and anthropology degrees from Harvard.

Private Funding Is Key Challenge of Trump Infrastructure Plan

Effort reflects the difficulty of coming up with taxpayer dollars in era of constrained budgeting; administration has released few details

 President Donald Trump’s proposed infusion of funding for infrastructure turns on a critical question: how the administration will get private investors to put up most of the money.
.. Mr. Trump’s advisers say they can get private investors to flock to put up the capital for such projects by curtailing permitting requirements and regulations, and by offering incentives to states and cities to turn to the private sector for financing.
.. it plans to encourage cities and towns to raise fees—like roadway tolls or water-usage charges—that will provide the revenue streams for private-equity investors.
.. The municipal bond market remains a more attractive source of funding to many state and local officials needing funding for major projects, Ms. Crebo-Rediker said, and many local governments lack expertise in how to structure public-private partnership deals.
..finding money for projects isn’t the problem; it is the dearth of attractive investments.
.. Blackstone Group LP last month disclosed that Saudi Arabia has agreed to invest $20 billion in an infrastructure fund that the New York firm hopes will reach $40 billion and have spending power of as much as $100 billion once debt is added.
.. while the administration says it will devote $200 billion more to infrastructure over the coming 10 years, the department is also cutting funding to existing programs that support major projects.

Making Ignorance Great Again

Donald Trump just took us out of the Paris climate accord for no good reason. I don’t mean that his decision was wrong. I mean, literally, that he didn’t offer any substantive justification for that decision. Oh, he threw around a few numbers about supposed job losses, but nobody believes that he knows or cares where those numbers came from. It was just what he felt like doing.

.. today’s G.O.P. doesn’t do substance; it doesn’t assemble evidence, or do analysis to formulate or even to justify its policy positions. Facts and hard thinking aren’t wanted, and anyone who tries to bring such things into the discussion is the enemy.

.. So how did the administration respond? By trying to shoot the messenger. Mick Mulvaney, the White House budget director, attacked the C.B.O.

.. He also accused the office — headed by a former Bush administration economist chosen by Republicans — of political bias, and smeared its top health expert in particular.

.. Mulvaney and his party don’t study issues, they just decide, and attack the motives of anyone who questions their decisions.

.. they insist that the private sector is infinitely flexible and innovative; the magic of the marketplace can solve all problems. But then they claim that these magical markets would roll over and die if we put a modest price on carbon emissions

.. Can you think of any major policy area where the G.O.P. hasn’t gone post-truth?

.. bear in mind that so far Trump hasn’t faced a single crisis not of his own making. As George Orwell noted many years ago in his essay “In Front of Your Nose,” people can indeed talk nonsense for a very long time, without paying an obvious price. But “sooner or later a false belief bumps up against solid reality, usually on a battlefield.”