This year’s Report, the twenty-fifth, is about the growth in income and
productivity required in developing countries to eliminate poverty in a way
that is environmentally and socially sustainable. The core development
challenge is to ensure productive work and a much better quality of life for
the almost 3 billion poor people today earning less than $2 per day and for the
2–3 billion people to be added to the world’s population over the next 30–50
years. To achieve this goal, while taking better care of our environmental and
social assets, will require a global development process that does better than
the one followed in the past.
Even though the world’s population increased by 2 billion people in the last 30
years, there have been significant gains in human welfare in developing
countries as measured by average human development indicators. But the
development path has left a legacy of accumulated environmental and social
problems that cannot be repeated. There are many drivers of today’s
socioeconomic and cultural transformations. Some are ongoing and continuous
(such as technological innovation and income growth). Others are onetime and
transitional, such as the demographic and urban transitions, which should be
completed within this century—largely within the next 50 years. These historic
transitions define the temporal and spatial context for managing
sustainability. How it will be managed is critical.
Environmental and social assets matter greatly for well-being and productivity,
but they are often neglected. That is why we need to think about managing a
broader portfolio of assets. The 1992 World Development Report identified many
policies to deal with environmental problems, but it overestimated
the capacity of institutions to implement even policies that seemed on the
surface to be win-win options. The failure to implement them is most often due
to the social and political problems associated with distributing costs and
benefits within and between groups and generations.
This Report integrates the findings of the last few WDRs into a broader and
longer term framework to identify some elements of a process that might do
better:
The interaction between economic, social, and environmental problems and
opportunities are manifested spatially—where people live. For this
reason, the report takes a spatial perspective on the social transformations
and the opportunities for growth and poverty reduction—in fragile lands, in
more favored agricultural lands, in urban areas. Some of the local problems can
be handled locally—but others must be dealt with nationally or globally.
Problems that require lasting solutions often are not susceptible to quick
fixes. Everyone could be better off if cooperative solutions were
agreed on and implemented. But often the rules and organizations to coordinate
human behavior do not yet exist, are undeveloped, faulty, or weak—especially
for problems with high transaction costs and longer time horizons. To be able
to coordinate well requires institutions that:
Pick up signals about needs and problems, especially from the fringes.
Balance competing interests.
Ensure credible commitments and accountability in executing agreed decisions.
Institutions need to be improved at many levels—from the local to the global—to
promote growth in ways that protect environmental and social assets. The
institutions to manage and protect environmental and social assets are not
emerging rapidly enough to address the consequences of the growing scale and
interconnectedness of human activity. Action is required now—even for problems
that will unfold over a longer period. Societies need to ensure an enabling
environment for creativity, initiative, and learning. These initiatives can
come from the public sector, the private sector, or civil society. Partnerships
among these various actors are needed within and across countries. Many
innovative institutions are emerging which need to be strengthened. The key is
to find ways to scale up these initiatives.
Strengthening the foundations for better institutions requires overcoming the
inequitable access to assets and the pervasive barriers to inclusion. The
needed institutions (and the solutions to tough problems) do not emerge when
some interests are dispersed or when some groups in society are poor or in
other ways disenfranchised. This affects the evolution and quality of
institutions and their ability to solve problems over the longer term. The
reciprocal relationship between the quality of institutions and the
distribution of assets can get countries locked into vicious cycles that
require a special effort to break out.
Inclusive societies, within and across countries, ensure that signals of
emerging economic, social, or environmental problems are picked up from all
groups, and that they can cooperate to solve tough problems. Put another way,
empowering poor people and the disenfranchised—the people “at the fringes”—and
giving them a real stake in society is the key to building the stronger
institutions required for longer term sustainable development.
