Why World Bank Needs To Read Its Own Development Report

“Democratic Centralism entails popular participation in formulating the plan at the enterprise level.” — World Bank Romania country report, 1979

The World Bank’s “World Development Report 2017” is a remarkable document. Remarkable, because it does not seem that the World Bank authored this document titled “Governance and the Law.” When the report cites Michel Foucault, that incandescent French thinker, who showed us how supposedly free and rational institutions of modernity are indissolubly linked with power and social control, it is time to sit up and notice.

Politics And Power

This is not an accident for the central focus of the report is politics and power in development policy, and the endeavour is to move politics and power “from the margins to the core of development thinking and action” and to “development practice… health and education… transportation and food…” (p.271).

How does then a rethinking of governance for development look like? The report stresses on three key principles which differ from traditional approaches: 1) Focus not only on the right form of institutions but also on the functions of institutions. 2) Focus not only on building the capacity of institutions, but also on power asymmetries, and 3) Focus not only the rule of law but also on the role of law (p.29).

Essentially, this goes against the soul of seven decades of development thinking — technocracy — perpetrated by international development institutions controlled by the Global North. It is the belief that the mere deployment of capital and technology with the help of Western experts will solve the most intractable development problems in the poorest parts of the world.

How drastically different is the new thinking can be gauged by the scholar Bruce Rich’s assessment of the World Bank during the presidency of Robert McNamara when the bank expanded phenomenally, and its lending had increased by six times in real terms: “McNamara’s grandiose vision involved a wager that was indeed Faustian—a risky experiment with life and nature, using simplistic technologies, and a fatal hubris about the bank’s ability to know, plan and direct the evolution of human societies and the natural systems they depend on.

This Faustian notion has been the norm when it comes to conceiving and ‘executing’ development projects in the Third World whether inspired by the imagination of the American economist W.W. Rostow in the 1960s, or that of the neoliberal capitalist policy prescriptions of the Washington Consensus from the 1980s. As the anthropologist Arturo Escobar argues, incidentally using Foucault, in his influential “Encountering Development: The Making and Unmaking of the Third World”, the Third World is not an entity that just exists out there. But it is culturally constructed by development institutions like the World Bank, set up by the First World, as “underdeveloped” and as characterised by poverty, illiteracy and disease, and in need of help and intervention.

In this characterisation, of course, European colonisation of Asia, Africa and Latin America are simply inconvenient historical facts. Thus, development for Escobar is not just describing a reality but is also a discourse that is laden with power relations favouring those who have the ability to define reality.

Reading the report against this context is like going through a treasure trove of ironies. There is a lot in it with which those who are opposed to the development as technical fixes, and development as Northern imperialism, can agree with. The report remarkably calls for the need for public goods and public spending on health, education and infrastructure (p.167). It stresses that growing inequalities are a grave concern, that inequality has a multiplier effect, and that “ultimately, growth and inequality are jointly determined” (p.167).

For the report, development is not the expansion of economic freedom, but following Amartya Sen, is the removal of all kinds of “unfreedoms” which will ensure that governance delivers the three goals of security, growth and equity. And that too, achieved in ecologically sustainable ways (p.4). The report also gives a very nuanced account of transformation towards, as well as the deepening of, democracy, and the role of elections, political parties, citizens and civil society organizations in that. It has a very useful survey of the nature and composition of elites from 12 countries. The comparative and global nature of an exercise like the report is one of its strengths, giving us interesting pieces of information like how multi-party elections led to the reduction of infant mortality rates in Sub-Saharan Africa!

This reinforces what critics of the World Bank and other International Financial Institutions have always argued, that there is no other panacea to problems of development than real and substantive democracy. But the most important question is what has changed since the days when the bank, as Rich documents, applauded the Communist dictator Ceauşescu’s centralised economic control and state planning and helped Romania become one of its largest borrowers.

The World Bank Headquarters Complex in Washington. Photo: Alex Wong/Getty Images

As A Social Document

The answer lies in reading the World Bank Report as a social document. It is not just about the World Bank studying society, but turning the lens back on World Bank. It is to understand that the bank is not detached from, but is part of the same social processes that it describes. Ironically, then, we have to follow what is prescribed in the report: “taking politics seriously in development points directly to the need to challenge the interests of the power holders that control institutions — something that many development organisations have not yet decided they are willing to do” (p.271).

What has changed from four decades ago is the fact that the bank is also responding to multifarious challenges and resistances to the development hegemony of the North which is secured by the participation of political and economic elite from the South. It is this hegemony that ensures that the premier development agency in the world, the World Bank, has always been headed by white males from the United States until the current president. This is when the planet is virtually kept alive by women who constitute 60% of the agriculture force in Asia and Africa. Unsurprisingly, many of the World Bank presidents have had a background working in defence departments and private corporations.

The resistances mounted by social movements have led the Bank to speak the language of the people. Hence, one sees an increasing focus on issues such as gender rights, equity (the World Development Report of 2006 was titled ‘Equity and Development’) and so on. Besides, the rise of China and India and their decreasing reliance on the bank makes the latter less powerful than before. Thus, acknowledging politics and power relations is also one way to defuse the challenges to the bank’s dominance.

There is a telling statement in the report: “The development community is talking the talk of politics. How much it will walk the walk is not yet clear.” (p.271). Ultimately, the question is, after this Report whether the World Bank itself is willing to walk the walk. A 2015 United Nations Report called the World Bank as a “human rights-free zone” and that its policies consider “human rights more like an infectious disease than universal values and obligations.

Perhaps, it is time for those who control the World Bank to read its own “World Development Report 2017”.

This article was first published here in The Hindu.

Nissim Mannathukkaren is Chair, International Development Studies, Dalhousie University, Canada.

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