Created in 1944 jointly with the IMF as one of the Bretton Woods twins, the World Bank shifted its focus to financing projects in developing countries in the 1950s. In the 1980s it became a strong proponent of structural adjustment policies that had major consequences for employment and working conditions. It only belatedly acknowledged its impact on labour and formulated policies on these issues in recent years. With the growth of other sources of finance the Bank’s pre-eminent role has lessened, but it remains the world’s largest and most influential development finance institution On the level of its official discourse and policy stances on employment and workers’ rights, the Bank has come a long way over the past fifteen years. In 2003, it launched a ‘flagship report’ which, at the height of murderous attacks against organised labour in Colombia, lauded the country for having embraced the ‘deregulation experience’ by dismantling protections for workers1. In 2018, if all goes according to announced plans, the Bank will make it obligatory for its projects to comply with a nine-page labour standard that, among other provisions, requires that borrowers ‘will not discriminate or retaliate against project workers who participate or seek to participate in … workers’ organisations … or alternative mechanisms’2. The World Bank has by no means made a complete about-face on policies for decent work, workers’ rights and its own responsibility to ensure they are respected. However, there has been a gradual shift within the Bank away from the approach, still dominant until the 2008-2009 global economic crisis, that job creation is an automatic byproduct of economic growth as long as governments do not interfere unduly in the free market. Additionally and importantly, the Bank has reversed its earlier stance that as an ‘economic’ institution, it has no reason or mandate to pay attention to the treatment of workers in the activities it finances. The belief that unregulated labour markets are a necessary ingredient for achieving high rates of investment and growth was given a distinctly enhanced status within the Bank when, in October 2003, it launched the first edition of Doing Business. Labour was one of five policy areas singled out in the report as priorities for deregulatory action to make countries more investment friendly. Doing Business published a ‘Hiring and Firing Workers’ indicator (the name was later changed to ‘Employing Workers Indicator’: EWI), which gave best scores to countries having the lowest minimum wages, longest working hours and least protections against dismissal. Within weeks of the launch of Doing Business, the Bank’s country offices began actively encouraging governments in developing and transition countries to emulate low-regulation model countries in the region, or in other regions, by slashing workers’ protections. In some cases, improving the EWI was made a ‘benchmark’ for measuring progress in meeting loan conditions. In 2007, the World Bank awarded its ‘Reformers Club’ prize to the Republic of Georgia because ‘reforms … have catapulted Georgia from a ranking of 112 to 37th place in the World Bank Group’s 2007 global rankings on the regulatory ease of doing business’3. The most substantial ‘progress’ was in labour reforms, thanks to action Georgia had taken in 2006 to abolish most labour regulations, including all protections against dismissal. IMF staff followed their Bank colleagues by incorporating EWI assessments and comparisons as well as recommendations for weakening labour protections in numerous Article IV Consultation reports. The fact that economic studies attempting to make the link between weak labour regulations and high GDP or employment growth gave highly inconsistent results, such that the link was essentially unproven, seems not to have disturbed the IFIs at this point. ResistancetotheDoingBusinessapproach Pressure for the IFIs to halt their policy of espousing extensive labour market deregulation began in the trade union movement shortly after the launch of Doing Business, spread to the ILO and then to several governments. In October 2007, the US House of Representatives’ Committee on Financial Services, chaired by Congressman Barney Frank, held a hearing on the EWI and its uses. Frank roundly condemned the Bank for its promotion of weakened protections for working people. The Bank finally paid heed to the pressure in 2009, the year...
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