Showdown at the World Bank

New Left Review

Volumn , Issue 7, 2001, Pages 124-137

  Wade, Robert ^a  

^a NONE

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EID: 0035589983     PISSN: 00286060     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Article

References (24)

1. Joseph Stiglitz, 'What I Learned at the World Economic Crisis', New Republic, 17 April 2000.
2. Lawrence Summers, 'America's Role in Global Economic Integration', Integrating National Economies: The Next Steps, Brookings Institution, Washington, DC, 9 January 1997. Well after the Asian crisis began, Treasury Secretary Rubin was reiterating that 'global capital flows have been an enormous boon to growth in countries around the world, lifting millions of people out of poverty - this is especially true in the dynamic, rapidly industrializing countries of East Asia', even urging 'China would also benefit by opening itself more widely to foreign investment, allowing foreign firms to bring their expertise and capital to the Chinese market'. Robert Rubin, 'Remarks to the National Center for APEC', Seattle, WA, 18 September 1997.
3. National Security Affairs Presidential Assistant Anthony Lake speech of 21 September 1993; emphasis added.
4. Catherine Gwin, 'US relations with the World Bank', in The World Bank: Its First Half Century, vol. 2, Perspectives, Brookings Institution, Washington, DC 1997, pp. 195-274.
5. On the differences between such thinking, see Bruno Frey et al., 'Consensus and Dissensus among Economists: An Empirical Enquiry', American Economic Review, vol. 74, no. 5, 1984, pp. 986-94.
6. William Ascher, 'The World Bank and US Control', in Margaret Karns and Karen Mingst, eds, The United States and Multilateral Institutions: Patterns of Changing Instrumentality and Influence, London 1992, p. 124.
7. See the common themes in James Wolfensohn, 'The Challenge of Inclusion', World, Bank, 23 September 1997; 'The Other Crisis', World Bank, 6 October 1998; 'Coalition for Change', World Bank, 28 September 1999 and Joseph Stiglitz, 'Towards a New Paradigm for Development: Strategies, Policies and Processes', World Bank, 19 October 1998; 'Participation and Development: Perspectives from the Comprehensive Development Paradigm', World Bank, 27 February 1999.
8. See the common themes in James Wolfensohn, 'The Challenge of Inclusion', World, Bank, 23 September 1997; 'The Other Crisis', World Bank, 6 October 1998; 'Coalition for Change', World Bank, 28 September 1999 and Joseph Stiglitz, 'Towards a New Paradigm for Development: Strategies, Policies and Processes', World Bank, 19 October 1998; 'Participation and Development: Perspectives from the Comprehensive Development Paradigm', World Bank, 27 February 1999.
9. See the common themes in James Wolfensohn, 'The Challenge of Inclusion', World, Bank, 23 September 1997; 'The Other Crisis', World Bank, 6 October 1998; 'Coalition for Change', World Bank, 28 September 1999 and Joseph Stiglitz, 'Towards a New Paradigm for Development: Strategies, Policies and Processes', World Bank, 19 October 1998; 'Participation and Development: Perspectives from the Comprehensive Development Paradigm', World Bank, 27 February 1999.
10. See the common themes in James Wolfensohn, 'The Challenge of Inclusion', World, Bank, 23 September 1997; 'The Other Crisis', World Bank, 6 October 1998; 'Coalition for Change', World Bank, 28 September 1999 and Joseph Stiglitz, 'Towards a New Paradigm for Development: Strategies, Policies and Processes', World Bank, 19 October 1998; 'Participation and Development: Perspectives from the Comprehensive Development Paradigm', World Bank, 27 February 1999.
11. See the common themes in James Wolfensohn, 'The Challenge of Inclusion', World, Bank, 23 September 1997; 'The Other Crisis', World Bank, 6 October 1998; 'Coalition for Change', World Bank, 28 September 1999 and Joseph Stiglitz, 'Towards a New Paradigm for Development: Strategies, Policies and Processes', World Bank, 19 October 1998; 'Participation and Development: Perspectives from the Comprehensive Development Paradigm', World Bank, 27 February 1999.
12. Louis Uchitelle, 'World Bank economist felt he had to silence his criticism or quit', New York Times, 2 December 1999.
13. Financial Times, 27 June 2000.
14. The Bank produce about 50,000 copies of the WDR summary across the seven languages (Chinese, German, French, Spanish, Japanese, Russian, and Vietnamese). In comparison, UNCTAD's annual Trade and Development Report -the only multilateral development report to provide serious economic challenges to heartland free-market views - has a print run of only about 12,000 in English, plus another 7,000-8,000 copies in the other five official languages of the UN (Chinese, Russian, French, Spanish, Arabic). It is produced on a shoestring budget of less than $700,000. UNDP's Human Development Report has a print run of 100,000 in 12 laguages, with a budget of roughly $1.5 million.
15. This section was a particular challenge. Everyone on the team knew that the report had to endorse democracy and empowerment as good for development and poverty reduction: this was the message decided by the Bank. But how to prove it? They could use Amartya Sen's Democracy as Freedom, arguing that democracy was both an instrumental good and an intrinsic value, part of the very concept of development; also Judith Tendler's Good Government in the Tropics, on a single-state experiment in Brazil; the standard cases of Kerala and Sri Lanka; and voluminous cross-country regressions showing democracy as good for just about everything. Other evidence, however, would give democracy a more equivocal report. The cross-country regression results are open to question, and the cases of China, Singapore, pre-1987 Taiwan and South Korea are difficult to square with the gospel (as is democratic but developmentally unsuccessful India). The issue for the authors, then, was how to give a ringing endorsement to democracy and its apolitical cousin, empowerment, while acknowledging this ambiguity.
16. See David Dollar and Aart Kraay, 'Growth is good for the poor', Development Research Group, The World Bank, March 2000 (written and discussed before the red-cover draft WDR was produced). Dollar and Kraay disassociated themselves from the popular portrayal of their paper as a manifesto for growth-is-everything: letter to the Economist, 24 June 2000.
17. See David Dollar and Aart Kraay, 'Growth is good for the poor', Development Research Group, The World Bank, March 2000 (written and discussed before the red-cover draft WDR was produced). Dollar and Kraay disassociated themselves from the popular portrayal of their paper as a manifesto for growth-is-everything: letter to the Economist, 24 June 2000.
18. Other elements behind Treasury's comments included the not always smooth relationship between Summers and Kanbur when Summers was chief economist at the Bank and Kanbur reported to him on Africa; Treasury's anger at Stiglitz, which spilt over onto Stiglitz's appointee; and Summer's anger at the Bank - specifically, Stiglitz and Boris Pleskovic-having invited Jeffrey Sachs to be a keynote speaker at the Annual Bank Conference on Development Economics that month (April 2000). How, Summers wondered, could the Bank give a hostile critic a keynote address right after the anti-Bank demonstrations at the Spring Meetings? Summers had seen the posters advertising the forthcoming conference, with Sachs's name prominently displayed. He had complained loudly, and the instruction went out from a senior manager to take them down.
19. Median unweighted GDP per capita growth in 1960-79 was 3.4 percent for developed countries, 2.5 percent for developing countries; in 1980-98, 1.8 percent and 0 percent respectively. The population-weighted average growth rate for developing countries in 1980-98 was 0.8 percent. The smaller fall of the weighted average reflects the faster growth of China and India. William Easterly, 'The Lost Decades: Explaining Developing Countries' Stagnation 1980-98', typescript, World Bank, January 2000. Branko Milanovic, 'True World Income Distribution, 1988 and 1993', Policy Research Paper 2244, Development Research Group, World Bank, November 1999. While I agree that fast economic growth can do wonders for poverty reduction, especially when asset distribution is relatively equal, I question whether the liberal free-market recipe is generally good for growth.
20. Median unweighted GDP per capita growth in 1960-79 was 3.4 percent for developed countries, 2.5 percent for developing countries; in 1980-98, 1.8 percent and 0 percent respectively. The population-weighted average growth rate for developing countries in 1980-98 was 0.8 percent. The smaller fall of the weighted average reflects the faster growth of China and India. William Easterly, 'The Lost Decades: Explaining Developing Countries' Stagnation 1980-98', typescript, World Bank, January 2000. Branko Milanovic, 'True World Income Distribution, 1988 and 1993', Policy Research Paper 2244, Development Research Group, World Bank, November 1999. While I agree that fast economic growth can do wonders for poverty reduction, especially when asset distribution is relatively equal, I question whether the liberal free-market recipe is generally good for growth.
21. I am indebted to Ronald Dore's pithy Stockmarket Capitalism, Welfare Capitalism, Oxford 2000. It should be read in conjunction with Robert Lane, 'The Road Not Taken: Friendship, Consumerism, and Happiness', Critical Review, vol. 8, no. 4, pp. 521-54.
22. I am indebted to Ronald Dore's pithy Stockmarket Capitalism, Welfare Capitalism, Oxford 2000. It should be read in conjunction with Robert Lane, 'The Road Not Taken: Friendship, Consumerism, and Happiness', Critical Review, vol. 8, no. 4, pp. 521-54.
23. International Herald Tribune, 20 September 2000.
24. See the research of Geoffrey Garrett, summarized in 'Shrinking States? Globalization and National Autonomy', in Ngaire Woods, ed., The Political Economy of Globalization, London 2000.