My New Position as Chief Economist at the World Bank

I’m pleased to report that President Jim Yong Kim has asked me to join the World Bank as Chief Economist and I have agreed to accept his offer. This may surprise you. It surprises me.

I have often said to myself that the intersection of the set of jobs in Washington DC that I would find intellectually exciting and the set of jobs that I would accept is empty. Intellectual excitement depends on the chance to learn. The decisions people make when they work in Washington tend to have real consequences, so it is risky to be learning on the job there.

A good place to learn is in a job at a university. I came to NYU in 2010 because Dean Peter Henry of the Stern School of Business and President John Sexton were willing to back my vague hunch that there was an opportunity to build a new academic field of inquiry based on “the city as a unit of analysis.” Roughly a century ago, there was no such thing as a business school. Now, the business is a standard unit of academic analysis. Could we bring the same focus to the city?

The city is interesting because it fits in between the business and the nation. It is relevant because two of the most predictable patterns in the process of economic development are the shift of employment from agriculture to manufacturing and services and the associated shift in the spatial location of economic activity toward cities.

After I arrived, Don Marron offered to support work at NYU on the city. Early in his career, Don hired Otto Eckstein to come work for his new company, Data Resources Incorporated (which came to be known as DRI.) So he had some tolerance for the peculiarities of academic economists and a clear sense of the value of quantitative data as a guide in making decisions. From his experience leading Paine Webber, he also understood the difference between management and policy and the essential role of measurement as a tool of management. His support made possible the Marron Institute of Urban Management.

In my work as head of the Stern School’s Urbanization Project and then also as director of the Marron Institute, I had the good fortune to connect with two of the most experienced observers of urban development, Alain Bertaud and Shlomo (Solly) Angel. All I had to do in my official capacity was provide air cover so they could do their work, then watch what they did so I could learn.

They both learned about the connection between urban and economic development through decades of work funded by the World Bank. I am betting that going to the World Bank will let me learn enough to keep up with them when I get back.

This position gives me a unique chance to learn about the thing that fascinates me most – producing knowledge that is useful in the sense that it yields benefits on the scale of billions of people. If you are familiar with my early work on ideas as nonrival goods, you can appreciate why scale is so compelling to me.

So the chance to learn is hard to pass up. And because I will be working with, and working for, people with lots of experience, the risks seem manageable.

It is an example of something I never thought possible: an intellectually exciting job in Washington DC that I am eager to accept. Proof yet again of things I have said before, perhaps without fully appreciating that “we” and “us” includes me:
– More things are possible than we realize. 
– Often, what holds us back is a failure of imagination.