International Development Association Research Articles

The G-8 Debt Cancellation Proposal and Its Implications for the Fund - Further Considerations

The G-8 has proposed that the Fund, the International Development Association, and the African Development Fund cancel 100 percent of their claims on countries having reached, or upon reaching, the completion point under the enhanced Heavily Indebt Poor Country (HIPC) Initiative. The proposal was initially presented to the G-8 Finance Ministers' Conclusions on Development issued on June 11, 2005, and reaffirmed in the statement on Africa signed by G-8 Heads of State and Government at the Gleneagles Summit on July 8, 2005.

How Significant and Effective Has Foreign Aid to Indonesia Been?

I. Introduction As the aid flow is becoming stringent and tied to policy reforms amidst growing or at best stagnant world poverty, the debate about the effectiveness of foreign aid has once again returned to the centre stage of development strategy. (1) After brief period of disillusion in the late 1960s and early 1970s about the effectiveness of aid, there was renewed hope that countries could be moved out of poverty through the allocation of aid. This saw rise in net aid flows to developing countries in real terms until the early 1990s (White 2004, pp. 235-36). However, disillusion about aid effectiveness again set in since the mid-1990s with little signs of world poverty disappearing (Hudson 2004). This has led to decline in net aid flows both in real terms and as percentage of donor countries' GNP. (2) Nonetheless aid is still regarded as essential for economic development and poverty reduction, especially for meeting the multilaterally agreed millennium development goals (MDGs). The need for increased aid flows has been highlighted at the March 2002 UN Summit on Finance and Development in Monterrey and the September 2002 UN Summit on Sustainable World Development in Johannesburg. Stern (2003, p. 14) has argued that meeting the challenges of the MDGs would depend on scaling up the international community's development efforts, which means not only increasing the quantities of aid, but also more importantly changing qualitatively from the past modes of doing business. Stern has also outlined the ways in which the World Bank and other donors are targeting and managing aid for improving efficiency or effectiveness of aid In short, donors have increasingly become selective in the allocation of aid to those countries with records of good policies and are attaching conditions on policy reforms and improving governance. Donors are now asking for detailed strategy for poverty reduction before agreeing to increased economic assistance. (3) However, recent work on aid effectiveness raised concerns about the manner in (and criteria by) which the reduced volume of aid is being allocated (Odedokun 2004, p. 229). Easterly (2003, p. 38) has expressed doubts about the effectiveness of selectivity in aid allocation. He has characterized the imposition of conditions as no than wistful hope, rather than policy with consequences in circumstances where a nation will selectively receive aid if it is 'good performer'--unless it is bad performer, in which case it will receive aid from the 'bad performer' fund. Easterly (2003) has also argued that donors are as much responsible for the past failure of aid as recipients. According to him, donors are judged by the amount of money spent and hence are driven by the desire to move money. (4) This creates potential moral hazard and incentive problems for both donors and recipients. He has, therefore, emphasized the need for independent evaluations of aid-funded projects as recommended by the Meltzler Commission (2000). Following the increase in aid-dependence (both in terms of volume and number of donors) in the wake of recent economic crisis, Indonesia has become almost test case for the issues pertaining to aid effectiveness, and both policy-makers and donors have devoted increased attention to aid effectiveness. It is widely believed that foreign assistance played significant role in Indonesia's success in terms of sustaining rapid growth for three decades until it was hit by the crisis in the late 1990s. Starting as an International Development Association (IDA) recipient in the late 1960s, Indonesia graduated to an International Bank for Reconstruction and Development (IBRD) client, and the bulk of its foreign financing since the early 1990s until the crisis was from commercial sources. (5) As matter of fact, Indonesia's graduation from one of the poorest countries to second-tier newly industrializing economy in less than three decades is in itself remarkable achievement matched by only handful of East and Southeast Asian countries. …

Turning Point in the Evolution of Soft Financing: The United Nations and the World Bank

ABSTRACT Half a century age, a drawn-out and divisive debate that lasted almost a decade (1949–59) took place at the United Nations (UN) over a proposal to set up a Special United Nations Fund for Economic Development (SUNFED) to provide soft financing for the development of the UN and the World Bank, as it came to be known, in the economic development of developing countries. Had the proposal been approved, it would have given the UN decisive leadership. In the event, opposition mainly from the United States but also from the International Bank for Reconstruction and Development (IBRD) led to the establishment of the International Development Association (IDA), the soft financing arm of the World Bank, in part as a foil to stop SUNFED, greatly strengthening the Bank's role at the expense of the UN. This account of what took place is based largely on archival material in the UN Archives and Records Centre in New York, the two histories of the World Bank, and the role played by a senior member of the UN Department of Economic Affairs, Hans (now Professor Sir Hans) Singer, who was intimately involved in the attempt to establish SUNFED.

Political regimes and development assistance

This article analyzes the development agenda Western donors have been operating on over the past decade, particularly the agenda's focus on good governance. After analyzing the academic background of this agenda, which is most evident in so-called new institutional economics, the article discusses the change in the discourse on development assistance toward selectivity, and its implementation in the policies of the International Development Association, the United States, and the Netherlands. The analysis of the policies of these three donors, and of recent empirical studies demonstrates that the donors are biased in favor of rewarding certain policies—in particular, pro-market and trade-oriented policies—on the part of aid-receiving countries. The donors have, thus, introduced clearly ideological and political elements about the socioeconomic order into a seemingly technocratic discussion about the prerequisites of governance. Because of the emphasis on market orientation and trade openness as central criteria for the judging of “good governance,” the current development assistance agenda is located explicitly in the domain of the post-Washington consensus, which links the promotion of pro-market policies to the implementation of an agenda of political reform. The article concludes by pointing out several ambiguities in the current focus on good governance. In particular, the author argues that donors tend to emphasize the instrumental value of governance and overlook the underlying structural causes of bad governance in developing countries.

Multilateral Development Banks: Issues for the 108th Congress

The U.S. is a member of five multilateral development banks (MDBs): the World Bank, Inter-American Development Bank (IDB), Asian Development Bank (ADB), African Development Bank (AFDB), and European Bank for Reconstruction and Development (EBRD). It also belongs to two related organizations, the North American Development Bank (NADB) and the International Fund for Agricultural Development (IFAD). As a group, the MDBs are the largest source of development aid for middle- and low-income countries. They lent or invested nearly $39 billion in 2002, some 73% of it at market-based terms and the rest on concessional terms. The World Bank accounted for 58% of all MDB aid and 71% of all MDB concessional aid. In the World Bank and most regional MDBs, the U.S., European Union, and Japan control over half of the vote. U.S. participation in the MDBs is managed by the Treasury Department. Congress has substantial influence over the direction and focus of U.S. policy. The MDB market-based loan windows are revolving funds. New legislation would be needed if they wished to expand their capital base and increase their lending operations. By contrast, the MDBs' concessional loan windows need annual contributions from donor countries in order to replenish their funds so they can continue their loan operations. In 2002, the Administration asked Congress to approve legislation authorizing U.S. participation in new funding plans for the International Development Association (IDA), the World Bank's concessional loan facility, as well as new replenishments for IFAD, the Asian Development Fund (ADF) and African Development Fund. Congress enacted these authorizations in the fiscal 2004 omnibus appropriations bill (H.R. 2673.) In 2003, the Administration asked Congress to appropriate $1,555 million for MDB programs in FY2004. The conference report ultimately approved $1,396 million. Late in 2003, Congress rolled the Foreign Operations Appropriations bill together with other similar legislation into the FY2004 omnibus appropriations bill (H.R. 2673.) Because of other matters, final passage was delayed until January 20, 2004. For FY2005, the Administration has requested appropriations totaling $1,492.5 million to fund U.S. contributions to MDBs. The MDBs have taken several initiatives to help middle- and low-income countries deal with their foreign debt problems. The MDBs have also put more emphasis on poverty alleviation programs, governance, institutional capacity building, and economic policy reform. The IFIs also expanded their transparency and the amount of information they make public on their operations. It is generally believed that such openness will make the IFIs more credible and accountable and improve the effectiveness of their operations. Many countries believe, though, that they are being forced to reveal too much. Countries may bar the IFIs from releasing information about themselves without permission. Critics say, however, that they should be more open. In 2004, Congress passed legislation (H.R. 2673) requiring the Administration to seek further transparency in the MDBs. It asked the MDBs to publish transcripts of Board meetings, release loan and policy documents 15 days before Board consideration, and to make more information available on their anti-corruption activities.

Transcultural reflection on clinical teaching using an experiential teaching-learning model.

A 6-day professional development workshop was designed and implemented in China as part of a project funded by the Canadian International Development Association through the Canada-China University linkage program. Kolb's experiential learning model was used as a framework to help Chinese nurse educators reflect on their practice as clinical teachers. The workshop resulted in the generation of new insights by participants into their role as clinical teachers. Chinese educators wanted to increase their links between the teaching of theory at the college and the instruction of students in the practice setting. The use of a similar approach in future professional development workshops allows presenters to identify nurses' learning needs regarding specific areas of nursing practice and education.

The World Bank: Its First Half Century

This effort constitutes the most comprehensive and authoritative work to date on the history of the International Bank for Reconstruction and Development, or the World Bank. Author-editors John Lewis, Richard Webb, and Devesh Kapur chronicle the evolution of this institution and offer insights into its successes, failures, and prospects for the future. The result of their intense labors is an invaluable resource for other researchers and a fascinating study in its own right. The work is divided into two volumes. The first is organized thematically and examines the critical events and policy issues in the World Bank's development over the last fifty years. Chapter topics include poverty alleviation, structural adjustment lending, environmental programs, the International Finance Corporation (IFC), the International Development Association (IDA), and the evolution of the Bank as an institution. The second volume contains case studies written by experts with experience in the various regions in which the Bank operates. There are chapters on the Bank's activities in Korea, Mexico, Africa, South Asia, and Eastern Europe. Volume 2 also contains essays on the World Bank's relationship with the United States, Japan, and Western Europe, and its partnership with the International Monetary Fund (IMF). By special arrangement, the authors have had wide-ranging access to confidential documents at the World Bank, making this work a unique source of information on the internal workings of this critical institution. They have also drawn on extensive interviews with current and past Bank officials. Moreover, publication could not be more timely, coming as it does when many in the development community and in the U.S. Congress are questioning the Bank's track record and even its reason for existence. The World Bank: Its First Half Century will be of great interest not only to development practitioners but also to students of international relations, development economics, and global finance. During the course of the project, John P. Lewis and Richard Webb were nonresident senior fellows, and Devesh Kapur was a program associate, in the Foreign Policy Studies program at the Brookings Institution.

Recent Practice of the Inspection Panel of the World Bank

The creation of the independent Inspection Panel in 1993 by identical resolutions of the International Bank for Reconstruction and Development and the International Development Association (World Bank or Bank) has been well analyzed elsewhere. What has not been noted is the actual practice of the Inspection Panel, as well as the evolving impact on international law of the cases brought before this innovative institution associated with the World Bank.

International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA): Resolution on the Establishment of the Heavily Indebted Poor Countries (HIPC) Debt Initiative Trust Fund

International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA): Resolution on the Establishment of the Heavily Indebted Poor Countries (HIPC) Debt Initiative Trust Fund

Alternative ways to fund the International Development Association (IDA)

This paper discusses the present method and three alternative ways the International Development Association (IDA) — the World Bank's concessional loan facility — might be financed. All cost the donors less than the present system, while providing borrowers with the same amount of aid. The alternatives also have drawbacks however, that may limit IDA's future capabilities in certain respects. The paper also discusses a way IDA's funds might be supplemented temporarily if the donors have difficulty implementing the pending 11th IDA replenishment plan.

United States Policy Toward the Multilateral Development Banks

During its first several decades, the World Bank operated with few constraints on its lending authority. Lending policies reflected primarily the economic and political objectives of Bank management and staff. With the establishment of the International Development Association (IDA) soft loan window 1960 this autonomy began to erode. The funds needed to support the IDA soft loans had to be replenished. This opened the door to greater political pressure on Bank policy by the administration and Congress. Since the mid‐1980s environmental interest groups increasingly have been effective in bringing pressure to bear on World Bank and other MDB policy.

Legitimacy, Accountability, and Partnership: A Model for Advocacy on Third World Environmental Issues

t Assistant Professor of Law, Washington and Lee University; former Senior Attorney and Co-Director of International Programs, Natural Resources Defense Council, Washington, D.C. This work was supported by a research grant from the Frances Lewis Law Center of Washington and Lee University and through the author's appointment as a scholar-in-residence at the Rockefeller Foundation's Study Center in Bellagio, Italy. The author thanks Frederic L. Kirgis, Jr., and Judith A. McMorrow for their comments on previous drafts and gratefully acknowledges the assistance of Eric L. Christensen, Jon C. Cooper, Lalanath de Silva, Kelly L. Faglioni, and Glenn T. Prickett. 1. One of the World Bank's principal functions is promote economic development, increase productivity and thus raise standards of living in the less-developed areas of the world . . . in particular by providing finance to meet their important developmental requirements .... Articles of Agreement of the International Development Association, Jan. 26, 1960, art. I, I 1 U.S.T. 2284, 2285-86, T.I.A.S. No. 4607, at 2-3, 439 U.N.T.S. 249, 252 [hereinafter IDA Articles of Agreement]. The World Bank Group comprises three windows, each of which technically is a separate international organization: the International Development Association, see id.; the International Bank for Reconstruction and Development, see Articles of Agreement of the International Bank for Reconstruction and Development, Dec. 27, 1945, 60 Stat. 1440, T.I.A.S. No. 1502, 2 U.N.T.S. 134, amended Dec. 16, 1965, 16 U.S.T. 1942, T.I.A.S. No. 5929 [hereinafter IBRD Articles of Agreement]; and the International Finance Corporation, see Articles of Agreement of the International Finance Corporation, May 25, 1955, 7 U.S.T. 2197, T.I.A.S. No. 3620, 264 U.N.T.S. 117. As of early 1991, 155 countries were members of the Bank. The principal mechanism by which the Bank

Structural Adjustment in Sub-Saharan Africa: The World Bank’s Perspective

This is an important time for Sub-Saharan Africa. First and foremost, because over half the region is actively engaged in wide-ranging programs of economic reform or structural adjustment. Second, because the donor community is in the process of deciding how these African efforts will be supported over the next several years. Lomé IV, (Europe’s major funding mechanism for Africa), its volume and how it is allocated, is a critical part of that process. So too are the current negotiations on the Ninth Replenishment of the International Development Association (IDA).

Structural Adjustment in Sub-Saharan Africa: The World Bank’s Perspective

This is an important time for Sub-Saharan Africa. First and foremost, because over half the region is actively engaged in wide-ranging programs of economic reform or structural adjustment. Second, because the donor community is in the process of deciding how these African efforts will be supported over the next several years. Lomé IV, (Europe’s major funding mechanism for Africa), its volume and how it is allocated, is a critical part of that process. So too are the current negotiations on the Ninth Replenishment of the International Development Association (IDA).

The World Bank and infrastructure development in developing countries∗

The history of the World Bank, which encompasses The International Bank for Reconstruction and Development (IBRD), The International Development Association (IDA) and The International Finance Corporation (IFC) is very briefly traced. The operation of these three banking organizations is described and then compared in a useful summary table, in respect of objectives, types of activities, current scope of activities, terms of lending, sources of funds, etc. At the operational level the typical project cycle, consisting of six phases, is briefly described.

The World Bank: Power and Responsibility in Historical Perspective

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

Development without miracles: The World Bank after forty years

Forty years after the signing of the final act of the Bretton Woods Conference on 22nd July 1944, which embodied the agreement on the World Bank and the International Monetary Fund, the World Bank now comprises three organisations: the International Bank for Reconstruction and Development (IBRD), the International Development Association (IDA) and the International Finance Corporation (IFC). In simplified terms, these three institutions jointly aim to help raise the standard of living in developing countries by mobilising finance in developed countries, channelling it to less developed countries and using it there as efficiently as possible in accordance with the stated objective. Given the difficulties involved, the virtually undisputed role played by the World Bank group in international development policy comes as a surprise.

World Bank Group: Statute of the Administrative Tribunal of the International Bank for Reconstruction and Development, International Development Association and International Finance Corporation

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The World Bank and Nigeria

The World Bank, together with its affiliates the International Finance Corporation and the International Development Association, is now the world's single most important source of development funds. Paired with the International Monetary Fund at Bretton Woods in 1944, the Bank was conceived as one of a number of new international institutions that would revive the world capitalist economy after the disruption of the crisis of the 1930s and the Second World War and open up the European colonial empires to American capital. The seriousness of the crisis, the destruction brought by the war, and the growing influence of Keynes' ideas led to a re-examination of international economic relations. Much of Europe would have to be rebuilt, but it was not a simple question of physical reconstruction. A general economic reorganisation resting on the American belief in the Open Door was needed to provide the means for extended development. The Bank and the IMF were to attempt to fill this role.

SURVEYS FOR THE LILONGWE LAND DEVELOPMENT PROJECT

In 1966 the Government of Malawi requested assistance from the International Development Association to fund a project aimed at preventing soil erosion and to increase agricultural productivity in an area of 500,000 acres, later increased to 1,000,000 acres of the Lilongwe Plain. That same year a mission visited Malawi to conduct a feasibility study and prepare a report with the result that World Bank agreed to fund a development project over twelve years.