The World Bank: Power and Responsibility in Historical Perspective

Abstract

The World Bank has become subject of controversy, of learned discourse and endless debates between the Left and the Right. The Bank has become the foremost multilateral international lending agency, with an expanding role covering variety of sectors and involving billions of dollars worth of loans to the Third World, on terms that are not available from commercial banks. As its role expanded, the Bank began to draw increasing attention, both favorable and critical. The London Economist recently called it a bank for all seasons. It is viewed differently by different people, depending on their ideological positions or perspectives. These perspectives may be reduced to two basic positions, divided along Left/Center axis and Center/Right axis. The Left critique has found the Bank-on its record-an instrument of Western corporate capital (Hayter, 1972; Payer, 1982; Bello, 1982). The thrust of the Leftist argument is that the Bank has not proved to be useful to the great mass of the Third World peoples, and that the ruling elites of its borrowing countries have derived benefits from its lending activities. The argument also holds that multinational corporations stand behind its activities also benefiting by selling their goods, which are not matter of basic necessity to the ordinary peoples. The Centrist position is essentially supportive of the Bank's role as an important vehicle for the transfer of resources for development of the Third World and as facilitator of trade among nations (Reid, 1975; Hurni, 1978; Krueger, 1982; Mason and Asher, 1974). The numerous publications financed or sponsored by the Bank itself fall into this category. Their wealth of information provides an insight into the Bank's philosophy and into many aspects of its diverse activities. At the same time they may also be regarded as organizationally self-serving. The second level of controversy, running along Center/Right axis, is relevant today in the context of Reagonomics. The Right is represented in the budget-cutters of the Reagan Administration, who view foreign aid as wasteful. David Stockman, the OMB director, for example, has charged that the International Development Association (an affiliate of the Bank) has not used its leverage to redirect Third World economies towards market orientation. The