interactions with DEC and the CEOs. This implies that quality control becomes a central and critical aspect of knowledge sharing _from the incentive perspective_ . Similarly, serious quality control would create in managers a laser focus on getting the strongest human capital, an incentive to ensure that it did not decay, and a demand that the supporting knowledge organs of the Bank functioned well.

# **_(d) Institutional structure and incentives_**

The Bank remains a lending bank in spirit and it faces numerous challenges in moving toward a Knowledge Bank. The issues involved are extremely complex and beyond the competence of the authors so we venture at a rather general level and into only a few select issues.

_Measurement—finding the missing coin where we lost it, not where the light is better._ Ten years ago, Managing Director Shengman Zhang was asked why, despite persistent talk of the coming of the Knowledge Bank, loans remained the central and most valued product. He responded “because we can count them.” Any nonmarket driven organization has a problem of measurement and this becomes increasingly difficult with knowledge, especially of the public good-intensive type—on two fronts.

First, it is hard to measure the quality of very heterogeneous knowledge outputs. It is difficult to compare across such diverse knowledge activities as, for instance, just-in-time policy notes, face-to-face conversations with ministers, sponsored conferences, substantive reports, and academically-oriented papers. It is also hard to measure their quality and impact<sup>18</sup> . Various measures of relevance of analytical work have been offered, for instance, the surveys of what is needed by the client. These are imperfect for numerous reasons: good quality knowledge may take years to work its way into the country debate (viz., labor market legislation); the multiplicity of knowledge outputs somehow requires a similar multiplicity of measurement tools; it is difficult to isolate and identify the effect of a particular knowledge product when the observed effect is the result of many contributions in a complex chain that goes from fundamental research to policy debates, from research done in the Bank to research done outside the Bank, etc. Moreover, it is difficult to capture knowledge quality solely through client satisfaction surveys— the functionaries answering the surveys are frequently not those involved with the product and it is not clear if the local client is always in the best position to evaluate the quality.

Second, it is equally hard to measure knowledge inputs. The production of loans, while it often involves herculean efforts, nonetheless follows a relatively well-known recipe, the intermediate stages of which are relatively straightforward to monitor. The same is not

> 18 Exceptions are comprehensive evaluations carried out by distinguished experts.  In 2006 the World Bank’s Chief Economist requested an independent evaluation of all research activities produced by the World Bank, both in its Development Economics Vice-Presidency and in other Bank units, between 1998 and 2005.  The evaluators, headed by Angus Deaton (Deaton et. Al, 2006), found that “[...] too large a fraction of Bank research was undistinguished, in the sense that it had neither great relevance to policy nor claim to academic distinction.  These are subjective judgments, but our evaluators are distinguished development economists, and their views were very similar to one another.  Their judgments did not refer to the lack of good papers in good journals, many of which were innovative and important by any standard.  Nor were any of them counting citations.  The concern was with the large fraction of papers that, on reading, did not seem to be very useful from the perspective of either an academic or a policymaker.”

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