The World Bank

From Reconstruction to Development to Equity

Katherine Marshall

• Publisher: Routledge
• Year: 2008
• Print ISBN: 9780415381321
• eBook ISBN: 9781134178605
• Edition: 1
• Topic: Politics & International Relations
• Subtopic: Politics
• Index: Politics & International Relations

The World Bank is oneofthe most important and least understood major international institutions. This book provides a concise, accessible and comprehensive overview of the World Bank's history, development, structure, functionality and activities. These themes are illustrated with a wide variety of case studies drawn from the Bank's int

1 ‘‘In the catbird’s seat’’

The World Bank and global development

The ‘‘catbird’s seat’’ is a privileged place affording a unique vision and broad overview, as well as advantages of access. Though widely used, the derivation of ‘‘catbird’s seat’’ is somewhat obscure. It refers to a bird that tends to sit at the highest point of a tree with the fullest view of its surroundings. The image describes well the World Bank’s special position today in the world of international development.

The World Bank is one of many institutions working on development, but it is privileged by the unique breadth and depth of its perspective. It works at the highest levels of global and national leadership to help shed light on what is happening and envision what is coming. In the process, the World Bank has developed long and deep relationships—some enduring more than five decades—with most government ministries and institutions leading different sectors of national economies and societies, and is a key player in education, transport, power, health, and other vital arenas. The Bank has also often taken the lead in framing and addressing issues that cut across many sectors, including gender, the environment, and the climate for private investment.

And last but not least, the Bank works intensively to translate ideas and visions into reality—that is, to hammer out the overview and details of programs and budgets and monitor their execution. Through this work the Bank directly and constantly engages with communities and local institutions, and continuously gains extensive day-to-day practical experience.

No other organization operates in so many different domains. This puts the World Bank in a special position, well placed to see linkages and bring an informed and grounded perspective to bear. This engagement on many fronts is enhanced by the Bank’s position as an international institution that, at least in theory, is removed from the hurly burly of national politics because it is an outside party and a respected international institution with a reputation for thorough analysis. And, with its international staff, it has the potential to bring widely different intellectual and cultural values to bear. Add to that the advantages of access that accompany the Bank’s considerable resources—where money talks, the World Bank is heard. And when it is convinced to act (or allowed to do so by its governors), it can almost always mobilize the resources to support that action.

This unique position helps explain why the World Bank has so often played a central role on development issues as far afield as avian flu, global warming, clean water supplies, preschool education, and nutrition. It explains why the World Bank can continuously produce a remarkable array of analytic reports, why it so often chairs aid coordination groups for individual countries, why other analysts seek its views during economic crises, and why its processes for creating economic development and anti-poverty strategies often bring insight and solid information to discussions within individual countries and the aid community.

The World Bank’s broad vision, however, carries some challenges, disadvantages, and risks. Because the Bank is involved in so many issues, the task of framing a strategic vision can, ironically, be particularly difficult. With so many threads, the possibility of bland rhetoric at one extreme or cacophony at the other is never far away. Many observers are uneasy with the multiplicity of tasks the contemporary World Bank pursues, and see a dispersion of effort. They argue for refocusing the Bank’s mandate and mission on a narrower set of issues—for example economic issues and the classic work of infrastructure development. A different view (my own) is that the Bank’s central challenge is to make the best of its privileged position, to bring very different perspectives together in creative ways, however demanding that may be. The Bank today is a highly interdisciplinary organization, with an ever-widening array of specialists. Extraordinarily complex teams are a hallmark of the World Bank’s work, though fully integrating these different perspectives presents a constant challenge. When these assets are well employed, however, the Bank’s insights are powerful.

Height confers advantages but also drawbacks. Because it operates at a global level, or at least with a broad vision, the World Bank often has difficulty both in seeing the individual trees in the forest and in linking its detailed work with the broader vision. Much of its work occurs within sectors, such as transport, education, or finance. Work within specific sectoral boundaries is well established and disciplinary focus within the traditional sectors is generally clear—for example, in education, with the respective roles of education economists, educators, and architects. When it comes to crosscutting issues, however, the bridges among sectors and disciplines may be harder to cross—say, the linkages between education programs, transport and health. This applies especially for the broad-brush analysis of global and national economic approaches and the far more specific micro-analysis resulting from project and sector work. The multitude of perspectives provided by day-to-day work at the local level can be hard to capture.

And with its privileged position come the dangers of arrogance and overconfidence in perspective and vision. The World Bank has not been known for its readiness to admit error or seek out opposing views. While this is changing, and many in the institution recognize the merits of humility, the stubborn image of arrogance is hard to shed. The potential for an inward-looking view is accentuated by the intrinsic difficulties in judging the impact of the Bank’s work on development. The Bank is tackling some of the world’s hardest issues and should be expected to fail in many of its efforts. Add to that that its role is almost always partial and indirect—it does not implement directly and is one of many players. The Bank too often fails to acknowledge both the intrinsic complexity and difficulty of its role and its own missteps and failures.

Investigating the multiple roles that the World Bank plays is key to understanding both its work and how it is perceived. But first it is important to appreciate how the hydra-headed institution of today has evolved, as its character is deeply embedded in its history. This chapter sketches how the very concept of development has taken shape and changed over the life of the World Bank (while the following chapter offers a more detailed account and analysis of the history itself). The common notion of development—and thus the job of the World Bank—was fundamentally different at the end of World War II, and has taken many turns since. This history explains much about shifts in the World Bank’s work as a development institution over six decades.

A second important aspect reflects what many see as an important culminating point for ideas and action on international development: the formulation in the year 2000 of the Millennium Development Goals (MDGs). A review of how the World Bank fits into the architecture of the goals—in theory and in practice—is another important piece of the story of the World Bank’s role in development.

Shaping development as a discipline and a mission

The term ‘‘development’’ is less straightforward than many would believe, and the very concept has changed radically over the past half-century. When the World Bank was established, the concept of development was barely used in the contemporary sense. The responsibility of the global community and richer countries in addressing poverty and helping to assure an equitable path for all nations to develop their human and other resources was not defined. The name International Bank for Reconstruction and Development highlights that the development mission was understood at some level, but also that it clearly came second to reconstruction.

Visions of development that took shape in the early years after World War II were deeply influenced by the Cold War, which dominated approaches to international relations. These visions also shaped what was understood as a ‘‘just world’’ and how nations related to one another, as well as the role that was envisaged for the United Nations (UN) system. The polarized image of a ‘‘communist’’ path, associated with totalitarian governments and heavy state involvement in national economies, was contrasted with a model of freedom and market-led development. This polarization played out actively as many new nations became independent, especially in Africa. Each nation shaped its own vision of development, but these approaches were seen largely through the Cold War lens. Among the practical results of the polarization of views was the somewhat ironic juxtaposition of a generally suspicious approach among many World Bank managers and staff towards direct involvement in economic life by governments, seen as ‘‘socialist’’ in some lights, and an unease at direct confrontation about negative facets of socialist systems because this was seen as crossing the boundaries of ‘‘political interference.’’ Blunter repercussions were the support that some leading World Bank member countries pressed for their ‘‘allied’’ countries, especially in Africa, even in the face of egregious economic and social management. The World Bank’s continuing support for Zaire (now the Democratic Republic of the Congo) over the years and for Kenya and Zambia during turbulent periods, at the same time withholding support for countries like Albania and Vietnam, can be laid in part at the door of Cold War politics.

By the early 1960s, leading universities had established programs in development studies, analysts had written many books debating what worked and what did not, and the notion was taking root that richer countries had moral as well as practical obligations to help poorer countries catch up with their wealthier neighbors, through both policy-making and financing. But the notion of what it would take to achieve this catch-up was not clearly defined.¹

The international financial institutions² clearly focused on investment, with a secondary emphasis on developing human resources (initially through technical assistance in economic management and project development and implementation, as well as training in a range of development skills, and later through increasing support for education policies and programs). But the overall vision was of a positive, relatively linear path of development. Most decision-making on funding for international development was confined to a narrow circle of policy-makers, as was implementation of specific programs. This picture started to change with the major droughts in Africa in the 1960s, but only in a few countries (the Scandinavian countries among them) did active debates of alternative paths and visions of development extend beyond small groups of academics and activists.

The 1970s and 1980s brought three major changes to this picture. The first was a steady broadening of the notion of development, which spurred institutions to recognize the complexity of the task confronting them. Education, health, nutrition, land tenure: a steady drumbeat of new topics appeared on agendas and filtered into organizations. The second, related, change was the emergence of doubts about how successful investments in infrastructure and human resources had been, especially but not solely in Africa. Major critiques began to suggest that all was not well behind the closed doors of the financial institutions. The rather complacent and confident tone of much development work began to give way to debates regarding how best to fulfill basic needs (a focus on providing the most essential services to people, like food, education, water, health) and integrated rural development (bringing together disparate programs and approaches so that there would be more coherence in efforts to support rural communities), among other concerns, and spawned a long series of new approaches and programs. The civil society revolution, which was to result in an explosion of institutions and movements over the last decades of the twentieth century, began to take shape and to seek admission into policy debates. And third, a string of economic crises—first in Latin America and then across Africa—had the effect of an electric shock, forcing practitioners and theorists to rethink basic concepts.

From a relatively self-confident and simplistic approach to development, the World Bank and institutions like it were slowly drawn into deeper reflection about what they were trying to do and what impact they had had. Evaluation emerged as a central theme: who would judge success, and how? Nongovernmental organizations and civil society institutions grew to parallel institutions like the World Bank, and the two camps began to encounter and engage each other, often through contention.

No issue exerted as much impact on development debates and visions as the environment. Development institutions at first viewed environmental critics as gnats annoying them with a buzz of critique, but gradually both the strength of their organizations and the merits of their arguments gained ground. The politics of these mushrooming critiques are a separate story, but a fundamental questioning of accepted concepts and basic values on environmental grounds caused seismic shifts over time and had broader repercussions; for example, it was the new safeguards on environment that, in many respects, opened the door to a far broader set of changes in social analysis. So, much more slowly, did changes in thinking about the roles of men and women. When it was first suggested, by critics and by people (especially women) within development institutions, that a special focus on issues for women was both essential and would strengthen development programs and their impact, the general response was (to say the least) skeptical, but over time a combination of evidence from research and operations and increasing voice of women began to shift the balance towards more openness. Gender strategies and analysis and probing questions about the impact of policies and programs on women came to be the norm. Today, many argue that the focus on women has become so much part of mainstream development thinking and practice that separate units and programs are hardly needed; this overstates progress but it is at least encouraging that in budget discussions it is now rare that gender programs are cited as the first on the list for cuts.

It began to dawn on many engaged in development work that the boundaries they had drawn around their mission and mandate—with parallel limits on ideas, policies, and procedures—had limited meaning, and were often quite flawed. A world neatly divided into first, second, and third worlds, development projects and economic advice, poor and rich, gave way to a far more complex picture.

The reflections about why many countries were not succeeding, why armed conflict seemed to persist and recur in some parts of the world, why so many carefully designed projects yielded disappointing results, and why technical assistance, provided at great cost and in staggering amounts, seemed still to leave yawning voids in capacity and continuing needs for outside advisors, led to much soul-searching. A healthy humility began to creep into some discussions, along with an appreciation of deep pathologies of development work, such as balkanization of projects by donor, and heavy-handed imposition of conditions and frameworks.

Two new mantras entered the discussion. The first was country ownership, reflecting the important observation that unless leaders and managers responsible for policies and programs are convinced and determined to act, development programs cannot succeed. Too often, it became clear, development institutions including the World Bank had taken too heavy a hand in program design, suiting it to their perceptions of how development should proceed, and had taken far too much at face value national government acceptance of proposed programs and conditions without testing commitment and recognizing the obvious pitfall that came when officials accepted proffered funds in the face of limited options. The second traced a path from consultation to participation and empowerment. This path reflected the crucial observation that communities must be far more directly involved in programs designed to help them. An array of advocacy, tools, and rules emerged to ensure that programs did indeed engage the people they most affected. Many civil society actors and local activists would fiercely contend that these insights were obvious from the start, but they were not part of mainstream development thinking until the 1990s.

The dawning appreciation of what actually happened at local levels, the reactions of individuals to development projects, and which incentives worked and which did not, paralleled growing awareness that information technology and transportation—the Internet, easier airline travel, the shift from mail to facsimile to email to cell phone—were spurring a revolutionary change in international relations. Some people describe globalization as a ‘‘project,’’ but most have experienced it as something closer to a force of nature, bringing changes large and small, and forcing individuals and communities to reassess their identities, values, and relationships.

The globalization revolution became more widely apparent and began to shape views on development just as the fall of the Berlin Wall in 1989, the end of the Cold War, and the breakup of the former Soviet Union were also transforming international relations. The amazingly rapid realignment of state and global power politics exerted several immediate effects. First, many countries now sought support not for development, they said, but for transition. Second, shadow patronage of developing countries formerly tied to Cold War politics gave way to a complex and quite dynamic pattern of approaches among rich countries, which included changes in how they treated poorer nations. Nicaragua and Ethiopia, for example, had benefited from a protective attitude by the United States despite widely known and egregious corruption, but this shield was soon removed.

The new and multifaceted world of nation-states, and the stripping away of stylized, simplistic explanations which had implicitly underpinned at least some development thinking about what made countries rich and poor couched in terms of their political orientation (capitalist, socialist, communist), stimulated new thinking about the causes of poverty. It is hard to pinpoint a specific moment when a broad consensus took form around a global commitment to ending poverty, in part because the rhetoric about poverty and social justice has always been fulsome, even as practical engagement and action have been rather paltry. Nonetheless, the calls for action on poverty became increasingly urgent over time. A call to listen to the voices of the poor added another element to the debates—one that was far from academic and abstract. A more thoughtful appreciation of the depth of poverty, documented in many media and studies, helped spur a steep rise in activism, in turn facilitated by the information revolution and growth of democracy worldwide.³ Among other topics, the heavy burden of poor-country debt galvanized many in poor and rich countries alike to protest not only specific debt policies that encouraged borrowing and made it extraordinarily difficult to reschedule or forgive unpayable debt burdens, but also the underlying economic, financial, and political models that had allowed debt to accumulate to patently unsustainable levels in the first place. Campaigns, including Jubilee 2000 helped to translate the long-standing and highly technical debate about debt policies into a widely comprehensible and compelling moral issue that engaged millions of citizens, crystallized much of the discontent, sparking alliances across widely different countries and interests.⁴

Many other historical events and forces also influenced thinking on development, including demographic changes which confounded planners of, for example, educat...

Table of contents

• Cover Page
• Title Page
• Copyright Page
• List of illustrations
• Foreword
• Acknowledgments
• Abbreviations
• Introduction
• 1 ‘‘In the catbird’s seat’’: the World Bank and global development
• 2 How the World Bank has evolved in response to global events
• 3 Nuts and bolts: how the World Bank functions
• 4 Development partnerships and the World Bank
• 5 Grounding in realities: the World Bank at work
• 6 The World Bank and its critics
• 7 Looking ahead: challenges facing the World Bank
• 8 Conclusion: an ideal for the World Bank
• Appendix
• Notes
• Select bibliography