*World Bank CP*
GOVERNANCE AGENDA DEMONSTRATES POWER OF WORLD BANK TO SET GLOBAL AID AGENDA
Wil Hout, Associate Professor World Development in the Hague, 2007, The Politics of Aid Selectivity: good governance criteria in World Bank, US and Dutch development assistance, p. 24
The World Bank, the world’s most important multilateral development institution and a major player in the financing of development policies, has been at the forefront of discussions about issues of governance and development since the 1980s. During the 1990s and at the beginning of the twenty-first century, the Bank has consistently focused on the issue of governance and has set the global agenda on governance quality in the context of development policies and strategies. The Bank’s influence on the development agenda, which may stem less from the originality than the propagation of views, was captured appropriately by Gavin and Rodrik: “Once the Bank gets hold of an idea, its financial clout ensures that the idea will gain wide currency.”
US Sets World Bank Assistance Agenda
US DIRECTS WORLD BANK ASSISTANCE POLICIES
Edward Ramsamy, Africana Studies Professor-Rutgers, 2006, The World Bank and Urban Development, p. 51
The formation of the IDA not only enabled the Bank to venture into social lending; it also enabled donor governments, particularly the United States, to insert their own political objective into the Bank’s agenda. As voting at the Bank was based on capital subscriptions, the United States, as the largest subscriber, was able to exercise a great degree of control over the use of its contributions. Development assistance thus became an instrument of Cold War politics as the United States tried to nurture its spheres of influence in the Third World. Black was apprehensive about this trend and objected to the growing linkage between development aid and Cold War objectives:
“Diplomatists and strategists who offer economic aid in exchange for a military alliance or a diplomatic concession…are certainly not serving the interests of orderly economic development; in fact they may well be abetting and perpetuating conditions which in the short run will render their military alliances and diplomatic concessions quite hollow victories.” (Black 1960: 268-9)
World Bank More Efficient/Effective
MULTILATERAL INSTITUIONS LIKE THE WORLD BANK MORE EFFECTIVE AND EFFICIENT
Lael Brainard, Brookings Institute-International Economics, 2007, Security By Other Means: foreign assistance, global poverty, and American leadership, ed. L. Brainard, p. 23
With all of its foreign assistance programs, the United States faces a choice of providing aid directly to recipients through bilateral programs or using its substantial leverage through the multilateral development banks (chief among them the World Bank), as well as through UN aid programs. Despite its instrumental role in creating these multilateral institutions and its outsized role in funding and directing them, the United States harbors a substantial ambivalence about going the multilateral route. Of course, in particular circumstances, multilateral assistance may be poorly suited to the pursuit of America’s most vital strategic interests, especially where security assistance is concerned or where there is an important quid pro quo involved. But multilateralism would seem to be a very attractive alternative where interests among donors are well aligned, for instance, in helping states vulnerable to conflict, tackling humanitarian emergencies and HIV/AIDS, and especially, promoting long-term development. Despite this, the current administration has shown a decided aversion to multilateral approaches, especially in the latter two categories where major new bilateral programs have been initiated.
Yet, in principle, more reliance on multilateral institutions for development assistance could be more efficient and effective for several reasons. First, in principle, the multilateral development banks should be less susceptible to idiosyncratic political considerations and therefore more likely to direct funding to the highest-returning investments – those in countries with accountable governance and virtuous policies—although there are many exceptions in practice. Second, lack of donor coordination is one of the great drains on recipient government managerial resources: the more donors, the greater the number of idiosyncratic conditions to meet, separate funds to administer, and forms to fill out.
World Bank More Effective: Infrastructure Aid
WORLD BANK BETTER THAN THE US AT INFRASTRUCTURE PROJECTS
Lael Brainard, Brookings Institute-International Economics, 2007, Security By Other Means: foreign assistance, global poverty, and American leadership, ed. L. Brainard, p. 48
While U.S. competencies are clearly world class in some priority areas such as humanitarian assistance and public-private partnerships, key capabilities critical to boosting the productive capacities of poor economies have atrophied, infrastructure chief among them. In contrast to its early years, when USAID was deeply engaged in supporting transportation, energy, and communications infrastructure, an astonishingly low 3 percent of the agency’s technical experts are now engineers.
Economists have long emphasized the role of infrastructure in promoting economic growth. Indeed, the earliest focus of U.S. foreign aid was infrastructure financing. After the success of the Marshall Plan, which included many projects to rebuild Europe’s devastated buildings and transportation infrastructure, President Harry S. Truman announced in his 1949 presidential inaugural address a “Point Four” program that would provide similar assistance to developing countries.
The U.S. government subsequently got out of the foreign infrastructure business for some good reasons, which also led to a change in focus by the World Bank and regional development banks. Large, expensive, long-term public works projects involving multiple contracts, opaque costs, and limited accountability offer tempting opportunities for corruption and political gaming. Given the frequent recriminations over “bridges to nowhere” that happen even in the most developed countries, it is no surprise that countries with weaker institutional infrastructure and less transparency and accountability have difficulty managing such projects well.
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