The World Bank in the Battles of the 'Decolonization Era'

Abstract

This paper studies the story of the World Bank, the development system and the battle over financial support for the ‘newly independent states’ in the 1950s and 60s, a story full of tragic turns. Much of what might have been perceived as victories of the Third World (TW) governments at the time, turned into ambivalence and problems: With IDA a new branch of the Bank was created and the Bank turned into a development agency initially against strong Western resistance – but power in the Bank was not shared and the financial engagement became increasingly linked to substantive influence, foreshadowing conditionality. Ultimately, I argue, a certain dynamic and strategy of the Bank and Northern governments comes to the fore when looking at those years that is reminiscent of classic hegemonic moves. Southern demands here were not simply rejected or blocked but rather redirected, diverted and ultimately subverted. Almost like in the far-Eastern fighting technique of Aikido, where the energy and dynamic of an attack is not absorbed but returned and redirected against the attacker, the demands of the Third World here were responded to by creating IDA, thereby transforming the World Bank and turning it into the agency that later became ‘the symbolic antagonist for a vast array of social movements’. This article will look at this Aikido-move of Northern governments and the larger battle from three perspectives. First, it will describe the political battle to institutionalize more development financing, placing the evolution of the Bank and in particular the creation of IDA in the broader context of the battle between North and South over institutional structures of redistribution and financial support (I.). Second, it will look at the discursive turn and rhetorical recognition but also placation and pacification of the South undertaken by the Bank mainly in the 1960s (II.). Finally, it will look at the role of institutional law in this battle and argue that law played an important role in deflecting Southern demands and actually shielding the Bank even more (III.).