Does the World Bank’s Involvement with Providing Aid to Less Developed Countries Help or Hinder Their Development?

The World Bank is an international financial institution, based in Washington DC, which has members from 189 countries. It was established in 1944, following the end of the Second World War. The World Bank aims to eliminate poverty by “helping people to help themselves” (Heakal, 2003). They offer loans and advice to less developed countries and have an overall goal to reduce global poverty. The World Bank currently has 12,677 projects in 173 countries, including 604 projects in India, totalling US$ 105.98 Billion (World Bank)

lending-commitments(World Bank)

This image from the World Bank website, shows their lending commitments by year. It shows that overall there has been a drastic increase, since its establishment in 1944. Their lending commitments significantly increased from the 1970s onwards, with some slight discrepancies, and with a peak in 2010.

The World Bank website provides many case studies, showing where their programmes have been most successful and helped many people. For example, it shows the effect the programmes have had on countries in Africa. They have transformed Tanzania’s economy to an open market, rebuilt local government in Sierra Leone after the conflict and have set up the ‘Mangoes from Mali’ project which has had positive impact on Mali’s agricultural sector (World Bank).

However, there are many people who disagree with the actions of the World Bank, and believe that it does not have a positive role on developing countries. Araghi writes about the inequalities within programmes from the World Bank, and how they enhance the gap between the rich and poor. Furthermore, it is discussed how a case study in Mexico was written as a ‘success story’ from the World Bank, when in reality was responsible for an income decline of 50 percent, as result of a ‘structural adjustment programme’. (Araghi, 1997)

Due to the large scale of the projects, there is the chance that they do not reach those who are truly in need. The money is given to the government as top-down aid. There are many benefits as a result of aid been given to the government; they are able to conduct projects on a much larger scale than smaller agencies, and can implement laws which may contribute to the programmes. However, ‘Grass-root’ (bottom-up) schemes can often be more successful as they are giving the most help, to those in greater need, at the root of the issue (Miltin & Satterthwaite, 2007).

During the 1980s and 90s, the World Bank began to take a more neoliberal approach, with a high focus of privatisation, free markets and other associated neoliberal policies. These ideas were enforced in developing countries through conditions that these countries were given, when they accepted loans from the World Bank. This neoliberal approach could be associated with the elections of Margaret Thatcher in the UK, and Ronald Reagan in the US, who were both neoliberal advocates. If this were the case, this would support the view that the World Bank is influenced heavily by the Global North. This leads to the argument that the focus of the World Bank is not to aid with development, but that it is instead used as a tool to exert control from the Global North, over the Global South, by enforcing the neoliberal ideas associated with economic systems in the North (Thistle, 2000). This idea is supported by a study by Kovach and Lansman, on 20 countries who received funds from the World Bank, which shows 90% of the countries assessed in this report, were required to implement privatisation and associated neoliberal policies, as part of their receipt of development finance (Kovach & Lansman, 2006).

Overall I believe that the World Bank is both trying to help countries to develop, whist still trying to benefit the dominant countries across the globe, such as the US and UK; This is because these are the countries who play the biggest role in deciding policies and are therefore likely to put in policies which benefit themselves in some way.

 

Araghi, F. (1997) 50 Years Is Enough: The Case against the World Bank and the International Monetary Fund, 26(2): 184-187

Heakal, R. (2003) ‘What is the world bank?’, Available at: http://www.investopedia.com/articles/03/042303.asp (24 October 2016). [2] The World Bank

Kovach, H & Lansman, Y (2006), World Banks and IMF conditionality: a development injustice. Available at: http://www.eldis.org/go/home&id=23585&type=Document#.WA4fnLRH0U1 (24 Oct, 2016)

Mitlin, D and Satterthwaite, D (2007) Strategies for grassroots control of international aid. Environment and Urbanization,19(2): 483–500

(No Date) Available at: http://www.projects.worldbank.or/ ( 24 October 2016).

Anon (2000), The IMF and the WORLD BANK: Puppets and the Neoliberal Onslaught, The Thistle, 13(2) Available at: http://www.mit.edu/~thistle/v13/2/imf.html (1 Nov 2016)

 

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