World at a Turning Point interview

This year's CRADLE conference, The World at a Turning Point: Cornell Conference on Development Economics and Law, took stock of the global economy, with a special focus on the changing nature of labor markets, technological progress, inequality, climate change, and related laws and regulations. The three-day event was co-sponsored by the Einaudi Center and the Department of Economics in the College of Arts and Sciences (A&S).

Arpit Chaturvedi MPA'18 and Larasati Eka Wardhani MPA'25 interviewed Luis Felipe López-Calva Ph.D. ‘99, global director, Poverty and Equity Global Practice, World Bank Group during the conference. 

You were a student at Cornell and a professor in Mexico. How did those experiences shape your approach to global development challenges and influence your leadership roles at the World Bank and UNDP? What skills or insights from Cornell continue to impact your work in economic development?

I was inspired to come to Cornell because I had a very influential professor at Boston University who is also a Cornell graduate, Debraj Ray. I was also interested in coming to Cornell because I had been inspired by reading the works of Gary Fields, Kaushik Basu, Erik Thorbecke and later, Ravi Kanbur. So, it was a dream place to do development economics. 

I spent several years in the academia in Mexico and engaged in research on economic development in Mexico, and gave some external advice to the Ministry of Social Development in Mexico. 

After that, I got an offer to work with the United Nations (UN). Starting in 2007, my life has been basically between the UN and the World Bank. By coincidence, Kaushik Basu came as the chief economist at the World Bank when I was there, which was fantastic. I had the opportunity to lead the main flagship report for the bank, which is the World Development Report, in 2017. It was a wonderful experience. Then, I went back to the UN for four years as regional director for Latin America and the Caribbean at the United Nations Development Programme (UNDP). Then I got this opportunity to come back to the bank as the Global Director for Poverty and Equity. 

During my time at Cornell, two key aspects stood out: the rigorous approach to analyzing complex development problems and the strong theoretical foundation alongside empirical analysis. Cornell emphasized depth while ensuring a comprehensive understanding of the issues.

In my interactions with colleagues, I consistently find value in having a solid theoretical foundation, which boosts confidence in problem-solving. Beyond depth, there was also breadth — the ability to explore questions outside traditional economic thinking. Kaushik Basu, my advisor, along with Ravi Kanbur and Gary Fields, were key inspirations in encouraging this multidisciplinary perspective. Understanding that addressing economic problems often requires looking beyond economics has been invaluable to me. The combination of theoretical rigor and broad, cross-disciplinary insights has greatly shaped my approach.

As Global Director for Poverty and Equity, how do you balance poverty reduction with sustainable growth in the face of climate challenges? What strategies have been most effective?

That’s a fundamental question we’re still grappling with. Recently, the World Bank’s mission was expanded. It used to focus on eradicating poverty and fostering shared prosperity, but now it includes the goal of achieving this on a livable planet. This means we’re addressing not only climate issues but also fragility and pandemics—anything that reduces systemic and individual vulnerabilities. This broadening of focus complicates interventions because we often face trade-offs or complementarities that need to be understood.

If you think of it as a triangle — growth, inequality, and poverty — the key is understanding how they interact. Economic growth’s impact on poverty is often mediated by inequality, and addressing poverty can’t be done through redistribution alone — growth must be part of the equation. But now, climate action introduces a new dimension, affecting how growth, inequality and poverty interact. Adaptation and vulnerability are critical here. To reduce poverty, we need to lift people out and keep them there by building their resilience to shocks. This means successful strategies must not only invest in the poor but also protect them, either through public mechanisms or by creating markets. Public action to shield the poor from shocks is essential.

On the other side, to make growth more inclusive and sustainable, we must lift constraints on the productive capacity of the poor. Poverty can’t be reduced simply through transfers; it’s about strengthening households' ability to generate income. A key channel for this is job creation. Understanding how economic growth translates into quality jobs is crucial for knowing how growth impacts poverty. It’s about bringing the poor into the productive side of economic growth, but in an environmentally sustainable way.

We adopt a gradient approach. For the poorest countries, the focus is on growth, poverty reduction, and reducing vulnerability — prioritizing growth and poverty reduction. As countries move up the income scale, we shift to climate-related investments, such as emissions-reducing technologies. However, many countries need financial support to afford this technological change. But for countries at the bottom of the global income scale, the main priority remains poverty reduction.

What challenges have you faced in tackling global poverty and inequality, and how do you balance immediate relief with long-term change? 

The World Bank aims not just to describe problems but to offer solutions. We've seen effective, low-cost approaches, like conditional cash transfer programs in Brazil and Mexico, which addressed immediate poverty while investing in future capacity through education and health. Although conditionality was controversial, it was later replaced by unconditional transfers. The risk now is governments focusing on income transfers without investing in quality services for the poor, which is essential to break the cycle of poverty. Shifting to a multidimensional view of poverty, beyond just income, encourages a focus on providing these vital services.

Your research on multidimensional poverty introduces methods like poverty space and poverty centrality. How do you see these network science approaches influencing World Bank policy design, and how could they reshape strategies for more effective poverty alleviation given the interconnections between issues?

Great question. The idea behind using network analysis is to address a key issue: we measure poverty multidimensionally, but policy advice is still given sector by sector —education, health, sanitation — without considering how these factors interact. A multidimensional poverty measure reflects a dynamic system where variables depend on each other. Network analysis helps us empirically understand these interactions and identify key factors with the greatest impact. While it's still experimental and faces resistance due to its lack of a clear theoretical foundation, I see it as a promising approach for shaping policy.