WB recommendations seen as conditionalities<\/p>\n
Is the World Bank interfering with the domestic political
\nenvironment of client countries?<\/p>\n
By Joaquin L Gonzalez III<\/p>\n
Is the World Bank drifting away from its mandate? This is a
\nserious question one asks after examining Bureaucrats in Business
\n(1995), the fourth and latest World Bank findings and policy
\nrecommendations on reforming state-owned enterprises or
\ngovernment-linked companies in developing countries.<\/p>\n
Since 1993, the World Bank has been actively disseminating
\nhigh-profile policy recommendations through a new mini-World
\nDevelopment Report series that supposedly seeks to "bring to a
\nbroad audience the results of its research on important policy
\nissues". However, some of the assertions made in these "policy
\nresearch studies" seem to go beyond the limit set by the
\norganization's founding members about prescribing reforms that
\ninterfere with the domestic political environment of client
\ncountries.<\/p>\n
In this latest controversial report, the World Bank seems to
\nbe suggesting political conditionalities disguised as policy
\nrecommendations for the developing countries of the world. The
\nreport's main finding is quite interesting since it acknowledges
\nthat despite more than a decade of heavy World Bank-supported
\nprivatization, the use of state-owned enterprises is still very
\nmuch the direction developing countries have taken. However, it
\ngoes on to outline the following political conditions necessary
\nfor success in reforming state-owned enterprises:<\/p>\n
* leaders perceive the reform as politically desirable (that
\nis, they perceive that their supporters favor reform);<\/p>\n
* leaders must see the reforms as politically feasible (that
\nis, leaders are able to overcome opposition);<\/p>\n
* leaders should make the reform credible (that is, the
\nleader's promises to protect investors property rights and
\ncompensate fired employees are believable). From these findings,
\nthe World Bank seems to be making clear what conditionalities
\npolitical leaders should expect to ensure technical assistance or
\ndevelopment financing for future state-owned enterprise and
\nprivatization reforms. If so, then certain political regimes will
\nhave to conform or face some form of sanctions.<\/p>\n
In other recent recommendations to policy-makers in developing
\ncountries, the World Bank delves into promoting good governance.
\nTheir definition of good governance is "the manner in which power
\nis exercised in the management of a country's economic and social
\nresources for development". Their prescriptions relating to this
\npolicy area usually includes a disclaimer stating that the World
\nBank does not seek to change a country's political regime but
\nonly reform its governmental machinery for effective public
\npolicy output. From this definition, economists at the World Bank
\nseem to think that the citizens in developing countries are naive
\nabout the obvious fact that their political and governmental
\ninstitutions and the public policy issues they address are
\ninseparable.<\/p>\n
According to the World Bank, they seek to target the following
\nbroad policy areas for their good governance prescriptions:<\/p>\n
(1) public sector management<\/p>\n
(2) accountability<\/p>\n
(3) legal and regulatory framework<\/p>\n
(4) transparency and information<\/p>\n
(5) human rights<\/p>\n
(6) participatory approaches<\/p>\n
(7) military expenditure.<\/p>\n
However, some of these policy areas such as human rights and
\nmilitary expenditure are definitely sensitive politically and
\nshould be left alone. One big lesson from The East Asian Miracle,
\nthe World Bank's first policy research report, was the capacity
\nof governments in East Asia to insulate themselves from the whims
\nof some politicians. Probably, another secret to East Asia's
\nsuccess, not stated in the World Bank's report, was the ability
\nof political leaders to protect themselves from interference by
\ninternational organizations such as the World Bank. Hence,
\nleaders of developing countries should be wary of so-called "good
\ngovernance experts" who act as members of World Bank missions to
\ntransitional economies in Eastern Europe and Southeast Asia.<\/p>\n
Despite the interesting facts and analysis in its
\nauthoritative policy reports, the World Bank must endeavor to re-
\nexamine its business of prescribing lessons to developing
\ncountries since some of their recommendations, especially the
\nones they just outlined in their current policy reports, have
\nbecome quite political and thus sensitive. The domestic political
\nrepercussions can be quite serious. Developing countries must
\nendeavor to be vigilant. If the World Bank is indeed drifting
\nfrom its original path, then leaders of developing countries must
\nsend this message across to keep it from going further astray:
\nKindly stick to your economic and social development mission and
\nleave domestic political issues and institutions alone.<\/p>\n
Dr. Joaquin L Gonzalez III is with the Department of Political
\nScience, National University of Singapore.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/wb-recommendations-seen-as-conditionalities-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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