More info on the World Bank

There are almost no success stories to point to -- the World Bank and IMF can hardly take credit for the Chinese growth spurt since 1980. But where these institutions have been heavily involved, the economic failure is striking: In Latin America, income per person has grown about 12 percent in the last 25 years, as compared with 80 percent in just the previous two decades (1960-1979). Africa has fared much worse, and the World Bank and IMF have been slow and stingy in providing even debt cancellation for the poorest countries -- something that can be done with the stroke of a pen.

Wolfowitz will therefore be taking over an institution that, by any standard economic measure, has failed. But the Bank has refused to even consider this possibility. Much of its economic research is politically driven. For example, on the eve of a key Congressional vote on trade last year, the Bank published a study showing that NAFTA had increased growth in Mexico. Their main result stems from an economic modeling error; yet the report remains uncorrected, on their web site.

In short, despite liberal sentiments among many of its staff, the World Bank is not a liberal institution. In fact it is so illiberal in practice that some of the United States' most prominent socially responsible investment funds (e.g., the Calvert group), largest unions (Service Employees International Union), and ten city governments have all pledged to boycott the World Bank's bonds -- which are commonly held by institutional investors -- until it reforms some of its most abusive polices toward developing countries.

Paul Wolfowitz is unlikely to advance these needed reforms. But until the other 183 countries that are members of this institution have a voice in its decisions, the World Bank is unlikely to live up to its mission of reducing poverty and improving living standards for developing countries -- no matter which American is formally in charge.
  Counter Punch article