Programmed to fail: the World Bank clings to a bankrupt development model

BANGKOK -- Like its sister institution the IMF, the World Bank has seen its legitimacy, if not its authority, sharply eroded over the last decade.

The tarnished image of the Bank marks a major change from the state of affairs 10 years ago, when, to great fanfare, Australian-turned-American James Wolfensohn assumed the presidency of the Bank. With the help of a well-oiled public relations machine headed by ex-Economist writer Mark Malloch-Brown, he tried to recast the Bank's image as an institution that was moving away from structural adjustment's emphasis on markets, deregulation and privatization, and making poverty elimination its central mission, while also promoting good governance and supporting environmentally sensitive lending.
While Wolfensohn won some sympathizers in the elite media, especially in the United States, his image makeover failed. Intensifying street protests in developing countries, and in the United States and Europe; biting criticism from the U.S. Congress; corruption scandals; and betrayals of commitments to good faith dialogue with civil society all overwhelmed the Bank's PR offensive.
Most of all, the Bank's record of ongoing failure--a debt relief program that did not deliver the goods; ongoing support for environmentally destructive projects; its ideological commitment to the "market-based" approaches favored by big corporate interests, even as they left their purported beneficiaries among the poor worse off; and a crushing burden of global poverty that persisted not just despite but in part because of Bank policies--destroyed the notion of a progressive, poverty-alleviating Bank.

REALITY BEHIND THE RHETORIC
A report of a commission mandated by the U.S. Congress to look at the international financial institutions destabilized the Bank in early February 2000. Headed by academic Alan Meltzer, the commission came up with a number of devastating findings: 70 percent of the Bank's non-grant lending was concentrated in 11 countries, with 145 other member countries left to scramble for the remaining 30 percent; 80 percent of the Bank's resources was devoted not to the poorest developing countries but to the better off ones that have positive credit ratings and, according to the commission, could therefore raise their funds in international capital markets; the failure rate of Bank projects was 65 to 70 percent in the poorest countries and 55 to 60 percent in all developing countries. In short, the commission found, the World Bank was irrelevant to the achievement of its avowed mission of alleviating global poverty.