Who needs the World Bank?

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The Global Development Finance report, released on Tuesday, shows that net private capital flows to developing countries reached a record $647 billion in 2006 – a 17 percent increase from the year before. The study notes, however, that only about 8 percent of that capital flowed to the poorest 51 countries.

The Wall Street Journal (subscription required) views the report as a demise of the bank:

[in the report] the bank itself describes how record private-capital flows into the developing world are advancing economic growth. The trend clearly is diminishing the need for organizations like the bank.

The most disconcerting news for World Bank fans are the sections on private credit markets. Developing countries are borrowing from markets instead of from multilateral institutions.

[…]. On current track, the private sector over time will reduce the bank's role to irrelevance.

Is there more to the bank than just lending? Here are some ideas.

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