Reforming Paradoxes of Economic Development
Chapter 1: The World Bank and Wolfensohn era reforms
The World Bank is no stranger to controversy. Polemically, the Bank is either heralded as a champion of technocratic guidance for economic growth, or condemned as a modern extension of the same forces of domination that characterized Western colonialism. In the end, there are some truths and some falsities in both extremes. The Bank is full of paradoxes and contradictions. Only one truth is certain: the Bank is too large and complicated to be perfect and too important and potentially dangerous to be ignored. Ironically, change, not continuity, has characterized Bank policy in the past seven decades. The frequency and magnitude of these changes strike a dissonant tone to the Bank’s claim of technical expertise. For example, the 1980s were dominated by Reagan-era Structural Adjustment Programs (SAPs). This marked a dramatic shift away from the human capital and poverty focus of the Robert McNamara Presidency (1968– 81). SAPs were macro-level economic reforms designed to minimize the role of the state and maximize the role of private markets in developing countries. In almost whispered, conspiratorial tones, SAPs were associated with the “Washington Consensus” and “Neo-Liberalism.” Regardless of the label, SAPs were an unmitigated public relations disaster, triggering a global backlash against the Bank and throwing it into a state of internal crisis and drift. Just when the Bank was ready to celebrate its 50th anniversary in 1994, it was facing opposition campaigns calling for its elimination, the slogan being “50 years is enough.” Even the Bank acknowledged that changes were necessary.
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