Thursday, April 27, 2006

Banks Won't Make Pizza

I forget where I first saw this sign: "We have a deal with the bank.  We won't cash checks, and the bank won't make pizza."  It probably was in a pizza place, perhaps the Cottage Inn on William St. in downtown Ann Arbor.  If that is where it was, it is not there any more.  But I have seen signs like that elsewhere.  It is still a good idea.  Banks should limit what they do to areas in which they have expertise.

In the latest edition of the medical journal, The Lancet, there is an article about the World Bank and its efforts to address the problem of malaria in developing nations.  
The World Bank: false financial and statistical accounts and medical malpractice in malaria treatment
The Lancet Early Online Publication, 25 April 2006

The World Bank has an annual budget of US$20 billion, and is the largest organisation operating with a mission to reduce poverty worldwide. Malaria destroys about 1 million lives a year; the disease is the leading parasitic cause of death for Africa's children and impoverishment for their families. Here we examine how these factors meet in the new Global Strategy & Booster Program, which is the Bank's plan for controlling that disease in 2005–10.

We believe this plan is inadequate to reverse the Bank's troubling history of neglect for malaria. In the past 5 years, the Bank has failed to uphold a pledge to increase funding for malaria control in Africa, has claimed success in its malaria programmes by promulgating false epidemiological statistics, and has approved clinically obsolete treatments for a potentially deadly form of malaria. Crucially, the Bank also downsized its malaria staff, so that it cannot swiftly execute the restoration it plans under the Global Strategy & Booster Program. We summarise the evidence, show that the Bank possesses demonstrably little expertise in malaria, and argue that the Bank should relinquish its funding to other agencies better placed to control the disease. [...]
The article is made available freely to the general public, something which Elsevier generally is loathe to do; the fact that it is freely available is an indication that the editors think it is a pretty important matter.  And so it is:
The Bank's secrecy and technical errors combine dangerously when we look at malaria treatment. Our investigations suggest that the Bank wasted money and lives on ineffective medicines.
The authors go on to provide abundant evidence of profound mismanagement.  The more you read, the worse it sounds, despite the fact that it was written in a dispassionate and objective style.  If anything, they are too gentle.  After stating that their investigations "suggest" that the Bank wasted money and lives, they document six instances of exactly that.  

Upon reading the article, one is left to wonder what the World Bank is doing.  Is it merely a political showcase, rather that an humanitarian institution?

They would have been better off if they had decided to spend hundreds of millions of dollars making pizza instead of running a medical program.