From moneybags to know-it-all. The World Bank shifts its stall

7th October 1998
By Robin Mansell and Andrew Barnett,

"Knowledge is like light. Weightless and intangible, it can easily travel the world, enlightening the lives of people everywhere... Poor countries differ from rich not only because they have less capital but because they have less knowledge". With these welcome and uplifting words the World Bank today launches the latest of its annual keynote addresses to development stakeholders, the World Development Report.

This year's WDR draws a line between know-how or 'knowledge about technology', and 'knowledge about attributes'. The first is the perspective of technology policy and addresses issues of the acquisition, absorption and communications of technical knowledge and 'know-how'; and the second perspective is that of the economics of information and focusses on the importance to economic decision making of information on 'attributes' such as the quality of products, the diligence of workers and the credit worthiness of firms.

 The report shifts the mindset of mainstream economics away from market forces and monetary policies, round to the huge leverage for economic and social progress arising from the 'information revolution - and the rapid technical changes that accompany it, not least satellite telecoms and the Internet.

When assertions like this appear in so blue-chip a document it shows how top-flight economists are starting to take on board the idea that information markets are imperfect. How and why individuals learn is - they are themselves learning - a key determinant of success or failure. No amount of new knowledge about how to produce goods or manage markets will make a difference unless recipients can take hold of it and join it with local skills to put the innovation to work on the ground.

The Bank says unequivocally that if poor people lack knowledge, poverty can only continue to entrap them. But can knowledge of itself cure poverty? Looking at familiar Third World ills and dilemmas through the lens of 'knowledge-led development' yields valuable insights. But it also raises difficult and complex questions. This WDR was apparently harder to put together than any of the previous twenty - and it shows. Carl Dahlman and his numerous advisors (at a cost of approximately $3m) have struggled to reconcile the conflicts and disparities endemic to their topic. Rather than expose and tackle them, they seem to have hidden them behind the aspidistra.

Knowledge can indeed be like light, but it can also take on costumes of darkness. Motorways may open new farm markets but can also blight rural environments. New crops can raise agricultural productivity but can also drive out-of-work labour into city slums. The gain from new knowledge is matched by new risks of adverse consequences and worries that technology may not be able to deliver its promises. Here is a home truth that previous, more hard-hitting WDRs might have relished.

 Yet the Bank appears to shy away even from drawing basic distinctions between knowledge and information, even to the point of dropping the word information from the working title of earlier drafts. It is not until near the end that the authors venture the oblique saw that 'information becomes knowledge as it is interpreted and made concrete in light of the individual's understanding of the context'.

 Most information is produced in wealthy countries. Trying to shift it across into a context of poverty very commonly creates absurd mismatches. Much recent research has looked into how people operate within national and local contexts to combine external information with their local experience and resources to produce innovations. Such communities of interest and habit formed the focus of a series of studies sponsored by the UN Commission on Science and Technology for Development, published earlier this year by OUP as Knowledge Societies.

 The baseline premise of the report in hand, however, is that breaking down information barriers and pushing through progressive regulation to guarantee access to all, for all, will give voice to the unheard and empower society's poor and excluded. Dream on. Power relations between those who hold the purse strings and those who do not will still govern how and why the new knowledge is distributed.

A World Bank is probably one of the few organisations powerful enough to redress the balance between the knowledge 'haves' and the 'have nots'. Patterns of disadvantage and marginalisation are sure to change in the future, but it is far from certain that inequalities will vanish through investment in better IT or knowledge.

 The WDR echoes the current expectation among 'market leaders' that the path developing countries must follow is one of convergence, replicating what they define as the frontier. But recent experience shows that greater potential lies in using new and advanced informatics to create entirely new pathways towards progress or find new solutions to problems and dilemmas that have held development back for years. Learning processes are dynamic, uncertain, full of surprises. Following leaders is not the only, nor necessarily the best, way to thrive.

 New knowledge heightens risks for individuals, companies and countries. Trust needs to be cultivated. The WDR acknowledges this but fails to reflect just how uncertain businesses and governments in industrialised countries feel on this score. Many despair of finding new ways to build trusting relationships in information and communication technology rich environments. It is becoming increasingly clear that both knowledge and trust are 'sticky,' adhering to those first gaining them. The resulting benefits often work to the disadvantage of smaller players.

 The Bank's purpose in releasing the report is to change practice and policy. But policy measures need to encompass not only economists' insights into market imperfections but also insights from other social sciences into the power of social processes like learning and conflict resolution. Development's big issue remains how the world's poorest countries will leverage their capabilities to their social and economic advantage in the 21st century.

In the new networked world, power will be contested and the locus of power will shift as people manoeuvre to gain leverage in both public and private electronic spaces. As Manuel Castells remarks, in The Power of Identity: 'The dream of Enlightenment, that reason and science would solve the problems of humankind, is within reach. Yet there is an extraordinary gap between our technological overdevelopment and our social underdevelopment'.

The World Development Report 1998/1999. Knowledge for Development is published for the World Bank by Oxford University Press and will be available on the Internet at

Note to Editors:
Robin Mansell is Professor of Information and Communication Technology at SPRU, University of Sussex and editor of the report for the United nations Commission on Science and Technology for Development Knowledge Societies: Information Technology for Sustainable Development, Oxford University Press, 1998. Andrew Barnett is free-lance economist and an Honorary Fellow at SPRU.

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