This paper calls attention to challenges developing nations face as they seek to strengthen universities, and their ability to contribute to social and economic development.  Two issues in particular are addressed in this chapter. First, developing nations face a monumental challenge in raising adequate funds for expanding the size, scope, and quality of their universities. Overcoming this challenge is critical if nations are to build forms of human capacity suitable for competing in a global knowledge-based economy. Second, financial constraints also limit the ability of universities in the developing world to contribute forms of research-based knowledge suitable for advancing a nation’s role in the global economy.

Overcoming this latter challenge requires developing nations to address a variety of complex issues, including brain drain, the inadequacy of scientific facilities and laboratories, and limited knowledge-based cultures upon which to advance science and technology (Peters & Besley, 2006). Adding to concerns linked to transforming universities and strengthening their role in the global economy is the fact that university contributions to nation building extend far beyond simply advancing scientific and technological knowledge; universities also play key roles in social development, especially in terms of supporting important elements of a society’s culture as well as its social and cultural institutions. This paper examines the World Bank and its role in assisting developing nations and their universities overcome these challenges, and contribute to social development.