====> This report caused amazingly little stir when it hit
the FutureWork list 16 days ago, and I'm pretty sure that
no variant of it arrived here.
Has a volte-face truly occurred at the World Bank, much less
one of astonishing proportions? Any thoughts, anyone?
valis
Occupied America
From: "vivian Hutchinson" <[EMAIL PROTECTED]>
To: Ian Ritchie <[EMAIL PROTECTED]>, <[EMAIL PROTECTED]>,
<[EMAIL PROTECTED]>
Date: Tue, 8 Jul 1997 10:53:10 +0000
Subject: World Bank in surprise policy U-turn
Reply-to: [EMAIL PROTECTED]
from The Guardian Weekly Volume 157 Issue 1
for week ending July 6, 1997, Page 19
World Bank in surprise policy U-turn
Charlotte Denny
IN an astonishing volte-face, the World Bank in Washington has
abandoned its long-running support for minimal government in
favour of a new model based on a strong and vigorous state.
Its latest report on world development*, published last week,
calls for "reinvigoration of public institutions" and says the
role of government has been vital in making possible the
"dazzling growth" of East Asia. "An 'effective state' is the
cornerstone of successful economies; without it, economic and
social development is impossible," says the report. "Good
government is not a luxury [but] a vital necessity for
development."
The bank says an effective state "harnesses the energy of
private business and individuals, and acts as their partner and
catalyst, instead of restricting their partnership". With the
collapse of the communist economies and the crisis in welfare
spending in the industrial world, the role of the state is in
the spotlight around the globe, it adds.
"For many, the lesson of recent years has been that the state
could not deliver on its promise," said the bank's president,
James Wolfensohn. "Many have felt that the logical endpoint of
all of this was the minimalist state. The report explains why
this extreme view is at odds with the evidence of the world's
development success stories."
But the bank itself has been identified with policies
that have seen developing nations cut essential government
services to try to balance their books. Aid recipients must meet
stringent budget targets under its structural adjustment
policies.
The bank now says that building an effective state is
vital for development. It lists key tasks of government as
including investing in basic social services and infrastructure,
providing a welfare safety net, protecting the environme! nt and
establishing a foundation of law.
Chief economist Joseph Stiglitz said the bank now believed
markets and governments were complementary. "The state is
essential for putting in place the appropriate institutional
foundations for markets," he said.
The irony of this U-turn was not lost on many of the bank's
critics. The International Confederation of Free Trade Unions
(ICFTU) said the bank had toured the globe during the 1980s
recommending the paring down of government, the civil service,
education and health services in the developing world.
Bill Jordan, leader of the Brussels-based ICFTU, welcomed the
change of heart, but he added: "I regret that public
institutions, public morale and essential services like health
and education had first to be considerably eroded before the
World Bank could come round to its current view."
For its report, the bank surveyed businesspeople around the
world and found that the countries that scored low marks for
government effectiveness also suffered from low growth. "Many
countries lack the basic institutional foundations for markets
to grow," the report says.
Corruption and crime emerged as serious problems. The bank found
countries with high levels of corruption had low investment and
growth. The report says the consequences of bribery do not end
with paying off the officials and then getting on with business:
"Government arbitrariness entangles firms in a web of
time-consuming and economically wasteful negotiations."
*The State in a Changing World; The World Development Report,
1997 (The World Bank)
vivian Hutchinson
[EMAIL PROTECTED]
phone 06-753-4434 fax 06-759-4648
P.O.Box 428
New Plymouth, Taranaki, New Zealand
visit The Jobs Research Website at
http://www.jobsletter.org.nz/
