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A Message from the Director-General

vinodA farmer in Kenya faces a hopeful future as he exports to growing markets opened up by global trading agreements. But another in Vietnam stares at ruin as her poultry is culled so that the threat of avian flu can be curtailed. And others in the Bay of Bengal face longer- term danger from a growing risk of floods as the earth's climate warms. Living continents apart, these farmers have more in common than their efforts to escape poverty. Their futures are increasingly interlinked with the world's response to shared global challenges.

Such global public goods— a global trading system, biodiversity— and the issue of combating global public bads— climate change, transborder contagion— share the problem of undersupply. To increase supply, and to avoid the "tragedy of the commons," collective action is required, often with coordinated responses at the local, regional, and global levels. Where the benefits can be directly felt at the local level, such as halting transmission of diseases, motivating action is less difficult. Where fully appropriating the benefits locally is not possible or takes a long time— such as climate change— collective action is far more difficult and requires global efforts to help motivate local action.

The World Bank has set fostering global public goods as one of its six strategic priorities under its new president, and is deeply involved in efforts to strengthen their supply through investments spanning local, regional, and global public goods. This goes hand- in- hand with the Bank's commitment to delivering development results, including through the use of the new round of International Development Association funding to which donors have committed a record of nearly $42 billion.

This year's Annual Review of Development Effectiveness focuses on assessing the World Bank's development effectiveness, with special attention to global public goods. It notes some encouraging developments. Project performance has improved over the medium term; country programs have worked relatively well in several large nations that house a majority of the world's poor; and the Bank has increased attention to collective international action on global public goods and advocated effectively on some of those important challenges. But work is required to remedy weaknesses. Notably there is a need to go beyond the Bank's country- based model when tackling issues where the perceived local and national benefits of action do not match global benefits from collective action. Attention should be paid to improving weak performance of country programs in smaller states and those with extensive poverty, and redressing shortcomings in applying monitoring and evaluation in projects and country programs.

Over the next decade and beyond, the success of the international community and the World Bank Group in rising to the shared global challenges of our time will be crucial to reducing poverty and, indeed, to solving the looming challenges the world collectively faces.


Vinod Thomas

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