Deeper Questions about Pay and Rations at the World Bank

OK, confession time. I grew up in a World Bank household. My mother started working there when I was two; my father joined the International Finance Corporation when I was four. As a child I heard snippets of conversation about West African travels and poverty around the world. I also picked up talk of “golden handshakes” and benefits such as my own private school education being subsidized by the Bank. At some later point, I hope to capture a lot of these contradictions in a book. At the moment, it’s worthwhile asking whether these benefits and high salaries are necessary for an institution that claims to be about “poverty reduction”. In this article, Wolfowitz’s Golden Parachute, I look at Wolfowitz’s attempt to take these policies to an extreme, and argue that it’s time to end the hypocrisy.

34 thoughts on “Deeper Questions about Pay and Rations at the World Bank

  1. It happens, sometimes the syndrome is outgrown, sometimes the insights and connections allow one to play the rebel and be holier than thou. Have you thought about doing an estimate of the subsidies you received for your education, travel and other good things you got from being a WBG brat? Present value the amounts and then return them to the poor of the world.

  2. Obviously you grew up the way you describe. Most people that “grow up” in your bracket turn to the private sector and make millions or tens of million within a lifetime. Those that work for the WB “put their kids through private school.” Don’t feel priviliged please because you are not. Working for the WB is heroic for those PhDs from Ivy Leagues who are making peanuts in comparison with what the market has to offer!

  3. Ooh, cheap shots at me, that’s really unexpected.

    The issue has little to do with me personally and even less to do with private sector jobs. The World Bank has spent about $60 billion (rough estimate) in salaries and benefits for its staff to administer about $600 billion in loans for policies and projects which are more often than not deemed a failure after the fact. Is that expenditure justifiable? Is the world in any way better off because of this expenditure? Even assuming that the world is better off, are $200-$300k salaries justifiable for a group that claims to work for the benefit of those who make $350-700 per year? How does this expenditure compare with much smaller entities in terms of impact on human lives per dollar spent in overhead?

    But by all means, if it’s easier for you to take cheap shots at me than answer these questions, go right ahead.

  4. Mr. Dossani:

    You have some serious issues to deal with – I assume you have a good therapist.

    In the mean time – keep in mind that World Bankers – generally – get paid a market wage. An economist for instance makes just about what she would make as a professor in an economics department, and much less than what she would make teaching at a business school. Bank salaries are more or less in line with UN salaries.

    The changes that Wohlfie the First introducted (Wolfensohn) in pay scales took away a lot of the benefits that your parents had. If you were a Bank Brat today you would likely not be in private school for instance. We also no longer get the kind of generous retirement benefits that your parents recieve.

    Salaries are in the $100-250k range. Very very few hit $300k. Corrected for inflation this is a lot less than salaries twenty or even ten years ago.

    If WBers were paid a lot less than their market wage – as you propose – there would be two problems. First, you would not be able to get anyone half way decent to work for the Bank. Second, we would be in a dangerous position where underpaid peeple would be dealing with large amounts of money. A recipe for corruption. Right now – as I have said previously – World Banker’s are perhaps a little coddled, but not corrupt.

    Your parents, whom I know a little bit, are wonderful people by the way.


  5. If the World Bank staff are well paid as what the press keeps on insinuating, how come a lot of the more experience and qualified staff have left or took early retirement? WB pay scale and benefits may be competitively only for fresh graduates but definitely not for more experience and senior staff. Have you ever ask why the western Europeans are less represented among the staff now? Did you know how many broken marriages and suicides occurred among the WB staff and compare this to a corporation of similar size? How many staff are not able to enjoy a decent family life because they have to travel and assist developing countries? Most important, the staff benefits prior to the 1998 HR reform were originally driven by the racist atmosphere in the USA. The US did not want the children of WB staff especially those coming from developing and non-Caucasian race to mingle with the school children of white USA. The home leave benefits were also provided then so that the non-USA staff will not settle in the US by having continuous link to their home countries. Now, with most of these benefits gone and almost 50% of the staff under contract, and finally being run by brilliant fresh graduates, the institution will perhaps be on the road to its demise. Why would a government listen to brilliant minds but wet between the ears?

  6. I would appreciate getting a clear understanding. In Canada, we get quite a few students, whose parents work for the WB, attending universities here because we are told that the WB will pay for Uni only if it is outside the US.
    Some are very bright and could have easily get admitted in the US top uni.

  7. This debate is amusing as it is sterile. There is no need to attack the guy for raising the issue, nor to ask him to return the subsidies he received. He did not ask for them. Let’s just hope that he put the studies he received to good use. As it has been pointed out, the generous packages World Bankers enjoyed were cut some ten years ago. Salaries are ok for the public sector, but nothing spectacular. According to a recent study, the only segment of Bank employees whose salaries are higher than the market rate is the administrative staff (but that’s another story, and a difficult issue the next president will have to deal with) Most World Bank employees are not there for the money.

  8. The hysterical rantings of Mr Dossani are simplistic. Comparisons of well-being across nations always throw up stark contrasts, but to attribute causation or motives is naive. Hope some day he will grow up out of his WB childhood traumas.

  9. So it’s clear then: overpaid WB employees waste money on investments with poor returns, including possibly the poster’s education

  10. While Sameer didn’t pick his parents (or, presumably his good education), I don’t see a lot of readers posting to defend Sameer’s out-of-date stats. I can’t vouch for Sameer’s ‘rough estimate’ that 10% of the loans since the Bank’s founding were spent on salaries and benefits, but it seems a bit high for me. The current wage bill is probably about 7% of disbursements, and less than 5% of commitments. That does not strike me as excessive, compared to, say, a lot of global NGOs or many UN agencies, whose perks are as lavish (sic) as the Bank’s and not nearly so lavish as the IMF’s. Or the European Commission?

    But this is not about salaries and benefits, the issue is effectiveness.

    Sameer is right to point out that the Bank does not have a perfect record, nor did we ‘get it right’ on a lot of what Sameer and his colleagues (who, by the way, is on your boards? who picked them?) rightly pointed out needed to be fixed. And fixed it was.

    To continue to dine out on the boogie man of SAPs (and I don’t mean the Bank’s accounting software) is a fundraising and PR ploy. Judge the Bank by what it does today, and suggest how it could be made better. And use all the data that the Bank, contrasted to most NGOs, makes available or has its members make available under our disclosure rules, rather than bring up tired half-truths of past eras.

    And please keep criticizing projects that don’t seem well-justified, because that’s the only way they’ll be stopped if they are as bad as the critics claim, or delivered in a smarter, sustainable way if they can be fixed.

  11. Please. The “Bank” is not a bank as 45% of its lending is not repaid due to corruption.

    Salaries are tax-exempt. Most employees receive tax “supplements” to pay the employees taxes, each employee makes about $50K per annum in retirement, etc, etc, etc.

    It’s an irrelevant organization full of arrogant “economists” who are not making a tangible difference in poverty reduction.

  12. Indeed. Some of these salaries are rather large/ vulgar given public prounouncements about helping people who are earning $2 a day, but I guess I’m a little tired of the generalizations. The Bank is a mixed bag and many (hardworking) World Bank staff at headquarters and indeed the vast majority of those in country offices do not receive a 6-figure US dollar salary. The salaries are on par with market rates. I am thinking of one case right now in a country office where even working for the Government, as say, a policy analyst in the office of the Prime Minister or President or in some other comparable capacity would pay better than or the same as the WB country office salary for a person with equivalent qualifications. There are many cases of this in a number of countries. There are also regional and local organizations that sometimes pay WAY more both in terms of salaries and travel allowances.
    By all means hold the Bank accountable through this site and bicusa (this is necessary!) but please live in the present (now as opposed to back then) and stop the generalizations based on the top 30% of the organization. This will make your cause more credible and help things move forward.

  13. Let’s make things personal…

    I joined the Bank a few years ago and currently have a salary of $125k tax free. This is spot on the ‘market reference’ point for someone of my age and experience. However, prior to joining the Bank I was earning the equivalent of about $180 tax free ($250k gross) and had the good fortune to live in a country and city far less than Washington D.C. I received good bonuses,and my annual increase was about twice what I can get from the Bank.

    I also didn’t travel 140-160 days a year. I was able to save about 50% more than I do right now … and I had a better pension scheme.

    So why am I here then? Obviously it is not for the money. Because, as strange as it sounds, I want to make a difference. And if the day comes when I can’t do that any more I will return to the private sector and enjoy the much higher benefits than I do right now at the Bank.

    The reality is that we are in a competitive market and the Bank does not pay competitive salaries for it’s senior staff. Yes, they are high compared to many, but not compared to what we earn for similar responsibilities in the private sector. It is for that reason that many people are leaving the Bank and we cannot hire top quality people, unless they are financially able to take the hit as I am.

    So if you want to have good staff, you have to pay for it. Calls for lower salaries will only further dilute the talent of the Bank. A much better approach would be to remove the 1/3 or so of my colleagues who do not add much value to our work, cull out the idle ACS staff, and institute a proper and effective management culture. But that’s another story …

  14. AWB has it about right. The most talented staff in the WB are paid only a small fraction of what they were getting (and can still get) outside the Bank. They take the cut, and tolerate brutal travel schedules, because they believe in the Bank’s mission, and hope they can make a difference. They also have to tolerate a lot of mis-informed criticism from NGOs and political hacks — including a good many who sought jobs in the Bank and were not found up to standards.

    As in every organization, not everyone contributes equally. Some are doubtless paid much more in the Bank than they could get elsewhere. This applies to most administrative staff and to some professional categories. A public sector ethos also makes it difficult to fire people for mediocre performance. But any suggestion that WB salaries are overall are out of alignment with reasonable comparators is nonsense.

    The “tax-free” myth should also be addressed. Bank salaries for international staff are indeed tax-free. But the beneficiary is the organization’s budget, not the individual. This is because market comparators for assessing salary scales against outside organizations are based on NET salaries. The organization benefits by not having to pay the difference between gross and net salaries.

  15. Amen to that! Loads of people are in the bank because of wanting to make a difference in whatever way they can (even though it might only be a small way)or sometimes because they just like their job or they’ve made a compromise of some sort.

    I am not complaining about my salary, because it is a good wage for someone in their thirties – but it ain’t the best. It gets really annoying when friends and strangers alike try to take you on for the exorbitant salary you don’t earn and for things the bank did when you were just a twinkle in your parent’s eyes. Or things it may do now that you have no personal control over or responsibility for. I came very close the splitsville with a really close friend over it. She has since been trying to back off (although the thought of yet another white male US president got her goat again the other day!) Even when they know the car I drive etc. were bought over three years ago when I was better paid in a previous job, I am still liable for harassment.

    A lot of my peers who work in the public/ private sector get gross salaries that are higher than mine, to compensate for the 30% or so tax they have to pay. Many also get little allowances like travel allowances to keep their cars running, gym allowances (yes!), uniform allowances, rental allowances, annual bonuses etc. Also the occasional company car. I get salary, health and life insurance, and a pension plan. End of story. Like most of my friends, I have no children therefore none of the lavish benefits so ridiculed in this column.

    My salary is in local currency and is less than US$24k at the current exchange rate in my country. And guess what? It slips every day because we are sliding downward against international currencies. My salary is certainly not keeping pace with the prices on “them there” supermarket shelves. And my partner and I finally got a house the other day after a struggle – we had to buy somewhere way out of town and in serious need of repair (the leaking roof is just the beginning) because we struggle just like any other thirtysomething educated couple earning local currency.

    It is a miracle that I have not yet become part of the plane-hopping brain drain from my region and headed over to Canada (easy migration program for multilingual skilled workers if you are savvy about getting jobs and readjusting in foreign climes) or to somewhere in the UN system where I could earn two or three times the USD equivalent of what I earn now in a country with a cost of living about 50% less than mine.

    I am still here because I love my job and my country.


  16. Alright, so on the one hand, I’m really pleased that this thread has generated the most comments/discussion since we migrated the site to the new format. On the other, I wish we could be having a more substantive discussion. A few quick points:

    1) If this is about the market, go and join it. The World Bank is not a private sector institution; it is one that claims to be about ending poverty and has little (if anything) to show for it. (And that’s not my view, it’s the view of evaluation after evaluation for as long as I can remember.) I work with people who make less than $1,000 a year to work full time with no benefits to make life better for villagers who are demanding basic human rights and an end to development that ignores their needs. Those same people would probably do it for free, and indeed I know many who’ve given their life savings for the cause of helping people better their lives. You’ll get no pity from me talking about going from $200k salaries to $130k salaries.

    2) The question about where our boards come from is interesting but irrelevant. WB is a public sector institution with a huge publicly funded budget that should be held to a high standard of accountability. Our entire budget is one mid-level salary, from what I’m hearing and comes primarily from people around the country who are in sympathy with the work that we do, which is pretty much taking on the IMF and the World Bank. Should we be accountable? Yes, absolutely, but I think the standard is somewhat different.

    For the record, we at the 50 Years Is Enough Network have three governance bodies; a) a steering committee made up of U.S. grassroots representatives; b) a South Council made up of representatives from movements around the world; c) a board which at the moment is made up of reps from these two committees plus a few outsiders.

    3) As for the “don’t blame me for what happened in the past” line, here’s a question: is there one success story at the macro level? Is there one country in which the IMF and World Bank have had a lot of power that can be classified as a success story?

  17. Bottomline: most are overpaid with benefits that NO corporation would ever think to give its employees. Most are not making a difference in the lives of others. And most loans are not repaid, doled out by the WB to corrupt ministers. This organization is in MAJOR need of reform.

  18. Not in disagreement about the major reform part – I have plenty of issues w/ the Bank from today and in the past! And I think if you keep pushing that reform will come. Still think your purposes would be helped by not generalizing about salaries though. I repeat: base your statements on fact to help your cause.

    I don’t know of anyone in my country that could survive on $1000 per year, where there are minimal social security benefits and the minimum wage is about US$400 per month (and isn’t a living wage btw). I already tried the “getting out of the system”, voluntary work full-time thing, and ended up sponging off mom and dad, and partner after my savings dried up. (Thank God I didn’t get sick during that time.) How helpful was that? I was also unable to help others financially in the way I can now by having a salary. And I can still do volunteer work in my spare time while having my light bill paid.

  19. “3) As for the “don’t blame me for what happened in the past” line, here’s a question: is there one success story at the macro level?”

    Onchocerciasis Control Programme (with UNDP and WHO). 1974 Program to eradicate riverblindness in Benin, Burkina Faso, Cote d’Ivoire, Ghana, Guinea, Guinea-Bissau, Mali, Niger, Senegal, Sierra Leone, Togo.

    These kinds of generalizations and hyperbole do not strengthen your argument.

  20. Sorry buddy, but you’re asking for it. Not only are you are a product of every past WBG subsidy, you continue to live off your parents (who are amazing, I cant believe you have the same genes) whose WBG pension pays your mortgage among other expenses. And, spare all of us the crap about living on US$1000 a year. You couldn’t even live on ten times that amount in Manila and came back to the US to live your cushy life in Washington DC.

    And yes, its personal when you make it your living to continually embarass and shame your parents and their friends. So, if you want to continue spouting the nonsense you do, start by returning every penny you owe the WBG. Ever heard the phrase, actions speak louder than words?

  21. The large number of comments in this thread is interesting. Sadly it reflects more the appeal to the worse angels of our nature than to the discussion of serious issues You will find that the responses are a natural reaction when someone feels that their efforts and the institution they work for and livelihood are attacked and distorted by misinformed, disinformed and uninformed comments.

    You are also asking people who have family responsibilities, a high level of education and achievement to wear hairshirts and take a vow of poverty and or give up their lifestyle to placate a few self righteous NGOs or self appointed defenders of the poor of all stripes who stubbornly repeat the same half truths forever.

    The fact is that World Bank and multilateral regional banks on a net basis have had a long record of success everywhere in the world in all areas and their work has made huge diference to the lives of the poor.

    In the macroeconomic area a few examples:
    China and India without the “knowledge” and training and financing obtained over many years from World Bank programs and the implementation of substained reforms adjusted to the specific realities of the countries would not have achieved their remarkable success. The programs in Eastern Europe and Russia also had a great dose of World Bank and IMF inspiration and support. Chile is another case, after using the large loans for implementation of the WB and IMF reforms after the crisis of the 1980’s and sustaining the core of the reforms the country continues to grow and is a clear example of economic success and is reducing poverty rates at a fast pace.
    The case of many east asian countries also reflects the success of the reforms and the conditions related to World Bank programs. Openness, fiscal and monetary balance, with a good dose of capital controls give the countries the ability to adjust to external crises. When countries maintain the core reforms and policies over time, they are also able to adjust rapidly and recover from external shocks.

    The glass is more than half full. When you work in a rural electrification project and a child tells you that she now can study and read at night because there is light, they can watch TV and children are learning about the world you feel you have made a difference. When you visit schools in Bangladesh and see the progress of girls education, when you see healthier children because of a nutrition or health program you know that the work is meaningful.

    You will always find critics and naysayers, that is the cost of doing business. The work goes on, reforms are needed but the Bank is always adjusting and reforming itself. One cannot make every critic happy all of the time.
    Bottom line is: I know and my World Bank colleagues know that we have made a difference with our work and our efforts, we have done well perhaps, but we have also done a lot of good!

    There may be other systems and approaches. To paraphrase a little… “It has been said that the World Bank is the worst form of institution to fight poverty except all the others that have been tried.”

    That is why we take the criticisms a little personally.

  22. To Go Fly A Kite: Again, you’re welcome to attack me personally. I have a thick skin. If you attack others on this site (instead of the ideas that are being discussed), your posts will be taken down. I don’t deny the contradictions of my life, but your assumptions about my life are wrong. If you’re interested in writing my biography, give me a call. We can have dinner with my parents if you like.

    On the “show me an example” question, the responses are telling. So far, the responses are 1) health care programs in sub-Saharan Africa; 2) India, China, East Europe, Chile, Southeast Asia.

    On India, China and East Asia: you’re kidding right? These are countries that have followed the opposite of World Bank/IMF policy advice and done extremely well. Malaysia is a telling example of a country telling these institutions to go away, and recovering much faster (and much more equitably) than those that followed the advice. India and China to this day are highly protectionist economies, heavily reliant on a big state sector. I did an analysis a few years ago of IMF advice to India compared with advice to Malawi. Both received the same recommendation (liberalization of agrariculture policies). India ignored it, Malawi followed it (as it had no choice) and within a year was suffering from famine.

    A lot of players were involved in re-making Eastern Europe after 1990, and it’s disingenuous for the Bank to take too much ‘credit’ there. That said, many places in Eastern Europe are doing just as badly if not more so than before 1990. Witness the split in Ukraine as one example of this, where half the country (more or less) longs for the “good ole days” of communism, a thought unthinkable in 1990.

    Chile I know less about. From anecdotal evidence, there may be something to the argument that privatization policies have been a success there. I would question what is the relationship between the structures that allowed those economic policies to do well there and the Pinochet dictatorship.

    But in some ways all of these examples disprove the basic claim that World Bank/IMF policy advice has done anything but harm. If these policies had been positive, you would expect strong positive results where and when the institutions were the most powerful. So Mexico in the 1980s, Indonesia/Philippines post 1997, Sub-saharan Africa from 1980 onwards. Are any of those places doing better in a macro sense?

    In the micro sense, the question is not whether some programs have done some good (Fascism/Nazism also did some good depending on how you look at them). The question that any meaningful evaluation would ask would be, was it a good use of resources to accomplish whatever was accomplished. You don’t evaluate a $50 million project against nothing, you evaluate it against another $50 million project. When such evaluations are done (which is rarely, at the Bank) the reults are not good.

    And it’s here that the question of salaries and benefits comes up again. This is not, as has been interpreted, a personal shot at those of you responding, and it’s certainly not a personal shot at my own parents or extended family, all of whom are good people doing what they think is right to the best of their abilities. It’s rather an institutional question: is the World Bank’s “goal” of poverty reduction served by providing six figure salaries for hundreds of people? If so, how? Aren’t there other models (micro-fnance, whole-timers working in rural India who already do good development work, etc.) that would involve a lot less staff (at least at that pay bracket) doing more and more meaningful work at the ground level?

    I wish someone could answer those questions from an institutional view, rather than responding defensively about their own insecurities and contradictions, which frankly don’t interest me.

  23. Why do you focus on the 6 fig. salaries of a few hundred and not the market rate 5 fig. salaries that most of the 10K + WB staff actually receive? This reflects a persistent ignorance about WB staffing. Ask your parents to contact the WB staff association if you’d like to confirm the staff demographics/salary scale.

  24. Not kidding at all about China, India or East Asia. If you take a closer look, they have not followed the “opposite of the WB/IMF policy advice”. Otherwise the WB/IMF would have not supported these countries reforms all these years.
    You know full well there are no “pure” market economy cases. Every economy is a mixed case and specific country conditions determine how the mix of policies are put together. The “spirit” of the Washington Consensus animated the central reforms carried out in the successful countries. Review the economic history and evaluate the reforms. The net result is that financing for structural adjustment when the reform policies are maintained leads to their relative success. Talk to people who started working on China for the World Bank in 1982, it was not microcredit, socialism, self-management or other experiments that led to the results but hard nose market based reforms. The opening of the economy to trade, capital flows, banking sector reforms, refinancing of SOE and taking the “road to socialism, state capitalism perhaps, have led to the impressive transformation in China.

    The WBG cannot take all the credit, but it can take a good amount of credit for the role it has played providing funds, technical assistance and the conditions enabling the environment for success in these countries.

  25. ‘I wish someone could answer those questions from an institutional view, rather than responding defensively about their own insecurities and contradictions, which frankly don’t interest me.’

    I trust that you do not expect that the institution will appoint a group of overpaid EXT professionals to respond to those questions giving you an institutional view. That would no be a very good use of resources. My comments here are during a “leave day” and completely personal. If you are not interested in insecurities and contradictions you should not have started your posting like you did.

    “OK, confession time. I grew up in a World Bank household. My mother started working there when I was two; my father joined the International Finance Corporation when I was four.” or written later “At some later point, I hope to capture a lot of these contradictions in a book. At the moment, it’s worthwhile asking whether these benefits and high salaries are necessary for an institution that claims to be about “poverty reduction”.

    The answer to the last question remains the same: Yes, the benefits and high salaries are necessary for an institution like the World Bank, it takes a lot of resources and specialized skills to succeed in the tasks of poverty reduction and to actually do the work professionally.

    You must have received the same answer all too many times perhaps,from your parents and from your WB friends. By now it should be abundantly clear why that is the case and trust you will finally acknowledge that.

    (Do you have a working title for your possible book?)

  26. 1) Let’s assume that I agree with your analysis of India and China for a moment. (One of the reason’s I don’t can be found in Patnaik’s studies on caloric intake in rural India, btw ) But leave that aside for now. I assume you agree that World Bank/IMF has less influence in these regions than in Latin America and Sub Saharan Africa. Why the dirth of success stories there?

    2) The answer I’m looking for is not an EXT example; nor is it the pat “we need experts” answer that you give. It is rather an answer to the “why do we need experts to do work in a mediocre way (the evidence for the mediocrity is in the poor results)”. To give one concrete example, the people who wrote the Globalizers vs. non-Globalizers research of 2003 are guilty of “proselytizing” according to one evaluation. According to everyone else, they’re guilty of shoddy research. Why are they still overpaid researchers at the institution? What do they add? How do they diminish poverty in the world?

    3) The point of my personal story is to bring up these contradictions and how they reflect on an institution; the personal is anecdotal evidence of a political point. If others want to add their own personal stories to make political points, by all means do. But replying in either the “shut up you hypocrite” or “my salary’s not too much” veins betrays personal insecurities… The book has a working title that I’m not happy enough with to share… Again, if you have suggestions or would like to hear my thoughts on that, give me a call. 202 IMF BANK

  27. I think the Bank has very sloooooooooowly been responding to a number of concerns about its structure and has begun, for example, getting closer to its clients and lowering its wage bill by farming out jobs to developing nations and moving things out of DC a little. This can be seen in the gradual decentralization of the organization. This is usually a sluggish process for any large organization, but it is actually happening bit by bit. Not that many people outside the organization have noticed this very real process though – especially the press.

    These positive changes have had to happen for a number of reasons including the increased competition the Bank is facing from China and others in development financing, and NGO/ public pressure. It is happening as the Bank becomes a comparatively smaller player and seeks to serve its clients more with less. It has been forced to listen more in such a context. And that’s a wonderful thing, particularly for small and micro states that are heavily import-dependent and have not had the competitive and other advantages of Beijing. (one of the many examples being, actually being able to benefit massively from devaluing its currency rather than watching the manufacturing sector being stifled, and the economy being flooded with genuinely cheaper or heavily subsidized imports, the exact opposite of what your econ textbook said would happen). Frankly, small states have often floundered in the face of globalization compounded in a number of cases by extremely poor leadership.

    However, while some of the six-figure USD salaries are going and others will probably have to go because of a number of factors, attracting high quality professionals often requires money. And it will have to be dependent on the cost of living and other salaries in your location. Washington DC, NY, London etc are really expensive. India in general isn’t. Other countries/ cities are somewhere in between. Even many developing country organizations in the public and private sectors have started to understand incentives in a global context and are making their salaries more attractive to stem the tide of departing professionals. A slew of eager, idealistic but unqualified volunteers (ie the type you don’t gotta pay) just won’t cut it for consistent economic/ social development work. They may be able to help but they can’t do it all.

    Moving the head office to another location outside of the developed world is a thrilling and possibly cost-cutting proposal I saw mentioned during the recent furor, but it’s unlikely to fly with donors.

    And also:

    1. Recognizing the reality that you have taken a pay cut to go the Bank is not insecurity. It is a fact that you can see when you look at the numbers on your old payslip and remember what you used to get. It’s even worse when you calculate inflation and realize you just can’t buy what you used to. Do some research.

    2. If you are not interested in other people’s insecurities and contradictions, then why introduce yours into the picture? Real people with real lives are reading your posts. And the blanket statements like the $1,000 a year -sorry, that one got lost in the translation to this part of the developing world. Inapplicable cross-country comparisons spouted by people living far away in Washington who can see the “big picture” tend to do that- and haven’t we already seen the damage they can do?

  28. Recognizing the reality is one thing, advertising it is another. If Bank staff are underpaid (and some I work with actually are), unionize. (We tried to help custodial staff do this in 1998-1999 and were bitterly opposed by the Bank and the Staff association, btw.) If, on the other hand as this WSJ editorial claims, 17% of Bank staff make more than the head of the U.S. State Department, please don’t try and tell me that you’re making some kind of sacrifice.

    And that’s the point of the $1,000 a year story. Fighting poverty is not making a career. There is an element of service, of sacrifice, and commitment to it, no matter how many degrees you have. If the World Bank is Bank of America, fine. Pay your staff market rates and get on with it, but drop the anti-poverty rhetoric please.

    If, on the other hand, the Bank truly wants to be a poverty reducing institution for more than just its own staff, it’s time to look at some much lower cost models. Will you still need to hire some high cost “experts”? Possibly, but please measure their results and fire them first when you see you’re not making a difference. Will you need to pay 20% of your staff more than 150k? I doubt it.

    Lastly, I think it is important to see that “the poor” and “the rich” are not just economic terms, they are political terms. When did life get better for “poor” people in the U.S.? It wasn’t when the cotton gin was making the U.S. a rich country. It wasn’t when railroad barons were making fortunes out of government contracts. It wasn’t even when the stock market was booming in the 1920s. Rather it was when unions stood up to the people who were making all this money and demanded a share of the pie, instituting such outlandish practices as the 8hour day and the weekend. Promoting policies that are pro-growth are one thing (and even there, the Bank’s track record in the places it has the most influence is abysmal), but on working with labor/farmer unions and insisting that countries abide by ILO standards, the Bank should hang its head in shame. And that’s too bad, because that’s the usual way out of poverty.

    Sorry for the tangent… I think we’re all repeating ourselves. I will close this thread in a day or so…

  29. Nobody here was grumbling about their wage until you started accusing all Bank staff of earning too much. None of us is starving and we don’t mind making the sacrifice of a slightly lower wage since we like our jobs. Most people here made a knowledgeable decision to work for what they work for because getting the highest salary isn’t everything – job satisfaction matters.

    I think you’re right. Close the thread. We have all vented enough and have not been listening to each other enough. Enough of talking past each other.

    Keep challenging the Bank to do better, though.

    Happy Tuesday everyone!

  30. I would like to correct the statement that World Bank salaries are in line with academic salaries. I am an assistant professor at a leading institution with a Ph.D. from a top program in economics. I can testify that World Bank salaries (certainly those reported here, and those I of friends I know) are much higher than the bulk of academic salaries (even for economists, who are paid more than many other academics), with the possible exception of economists in certain business schools and a few academic ‘stars’ to whom the vast majority of rank and file academic economists, let alone World Bank economists, are not comparable. If you would like to verify this, please consult the Chronicle of Higher Education online database, certain public universities’ disclosures of faculty salaries or similar widely available resources. It is true that earnings for economists in hedge funds or investment banks are vastly higher, but is that the relevant comparator? I happen to know that Bank salaries are also somewhat higher than UN salaries (which are in any event similarly obscenely bloated). ‘Our dream is a world free of poverty’ indeed!

  31. It depends on which country you are in. I guess what you are saying must be true where you live. However, it is not the case where I am. I think it also varies according to whether you are hired internationally (paid in USD) or you are local hire. All WB positions here are local hire.

  32. I was referring to academic salaries in the United States, which is the most pertinent comparator for internationally mobile economists trained in Ivy League universities or their equivalent. Obviously, appropriate purchasing power adjustments have to be made when one changes the location of the posting. To note this does not constitute a critique.

  33. Dear Professor “Ito Lemma”:

    A database of salaries of economics full professors in US universities is available here:

    You need to divide this by 9 and multiply by 12 to get the annualized equivalent because academics are paid on a 9 month basis.

    The average annualized salary of a full economics professor calculated this way is $218000 which is about 10% lower than the average gross (i.e. the before tax equivalent) salary of a GH level staff member in the Bank’s research department (which is the most obvious comparator).

    Also one of the main points made in the recent external evalation of DECRG by academic economists was that Bank researchers salaries are now becoming increasingly non-competitive in comparison to comparable academics in top universitues.

  34. Statement of the lemma
    Let x(t) be an Itō (or generalized Wiener) process. That is let

    where Wt is a Wiener process, and let f(x, t) be a function with continuous second derivatives.

    Then f(x(t),t) is also an Itō process, and

    This is not Ito’s Lemma, and is in fact just a specialization of the Lemma.

    Get off your high tower false Ito
    The World Bank Economists are not paid enough.

    Domo Arigato

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