The “ Knowledge ” Bank

“Ideas” have always been a core trait of the Bank. Indeed if the Bank was simply a financial intermediary it would barely need a tenth of its staff. The money was seen as the lubricant to move the main product – ideas of what to do, how to do it, who should do it and for whom. However, in its early decades the importance of ideas was implicit. The source of ideas was the knowledge embedded in its experienced personnel and the transmission mechanism was the project mode. Since the 1970s the Bank became more self-conscious of the importance of knowledge, both as an imprimatur institution as well as a producer of knowledge. And in more recent years, the relative decline in the importance of the Bank’s financial role (especially in emerging markets), in part the result of the high transactions costs of borrowing from the Bank, has led to a greater stress on its role as a “knowledge” intermediary rather than just or (even primarily) as a financial intermediary. However, lending has been the principal mechanism for knowledge transfer and stagnation or decline in lending is likely to adversely impact knowledge transfer as well.