Aaron said:
>> by using only internal funds for development, they are
>> depleting this capital reserve. however, external development loans (WB)
do
>> not diminish the available present native capital which could be used for
>> schools, health care, etc. thus they could invest WB funds in addition
to
>> native capital...assuming that the WB loans are invested in a manner that
>> would allow the debt plus interest to be repaid with comfort.
Patrick said:
> That assumption rarely holds.
I only wish I could argue...
> yet more elites who don't give a damn about "development."
The countires development, that is. The Indonesian debt around the time of Suharto's departure was roughly equivalent to his family's wealth. His family developed nicely.
> When you do think about it, it undermines the justification for a WB, eh.
I see a glaring dichotomy between theory and practice. Stiglitz point was *theoretically* correct by my interpretation. Practically, as you pointed out, its laughable. I should have made that clearer in my original.
You are right, in current form (practice), it is grounds for nixing the WB. If there were accountable and responsible bodies for the oversight of development loans (which could have its problems...the president is elected after all), I could see the WB doing good. Its too tangled in a web of power to currently do that.
Aaron