There is a serious issue about how any international development agency should operate. As I think we all understand, grants have the problem of either leading to too many strings attached by the grantor, with obvious reasons for complaints, or too few controls or limits, with a greater likelihood that the money just ends up in the Swiss bank accounts of corrupt officials.
Of course, the problem with the high "failure rate," is exactly the debt problem. Those that were/are not failures end up paying for themselves and thus not aggravating the debt problems. But, it is unclear to me that the WB can be held responsible for these "failures," although there is certainly an imperative for debt reductions, eliminations, etc. (that even the execrable Larry Summers appears to support now, sort of). The fact is that many projects in developing countries do not work out, irrespective of whether they are in capitalist or socialist contexts. It is hard to get things going and succeeding in very poor countries. In that regard one should be applauding the successes, rather than condemning the failures.
It occurs to me that a more serious problem with the WB, which it shares with the IMF, and which is implicit in many of the remarks that have been made, has had to do with its domination by the US. I have always found the hysteria by rightwingers about these outfits hilarious given the absolute subservience that both of these outfits have always given to the opinions/views of top US policymakers who have exercised virtual veto power of their decisions. I find it intriguing that just recently the WB may have for the first time actually made a loan the US disapproved of, to Iran.
Of course more democracy at the WB and the IMF and the WTO may not lead to results that many protesting them will like. This is especially clear with the WTO, where, as was discussed in this space earlier, more democracy at the WTO will in the short run almost certainly lead to much less attention being paid to the issues raised by those in the streets of Seattle. With respect to the WB, however, this may be less true. Indeed, one argument I have heard is that the real import of the Washington protests was to give weight to the "good guys" in the WB against the "bad guys" both there and in the IMF in the meetings and negotiations. There was a lot more talk about releaving poverty than has been heard for some time.
But, the democracy issue also reemphasizes another point. A lot of the projects that people are complaining about were initiated by and strongly supported by the local governments. When the WB refuses to fund some big dam project of the sort the Soviets used to love, it is often doing so against the express wishes of the locals. Should the WB be the engine for enforcing "green growth" or whatever on unruly locals, or should it be shut down so that these locals just do whatever? Barkley Rosser -----Original Message----- From: Doug Henwood <dhenwood at panix.com> To: lbo-talk at lists.panix.com <lbo-talk at lists.panix.com> Date: Thursday, May 25, 2000 4:47 PM Subject: Re: WB and IMF
>J. Barkley Rosser, Jr wrote:
>
>> The answer here seems to be that the WB should
>>get back to its core function of funding specific development
>>projects and get away from its involvement with the IMF in
>>the structural adjustment programs. This has been proposed
>>and may well be adopted.
>
>Though one reason it got into the policy business was that project
>lending in the 1970s led to unsustainable debt levels which led to
>the debt crisis which led to...more loans, only this time for reform
>and restructuring.
>
>Doug
>