Letter to World Bank President Robert Zoellick to Re-Launch B-SPAN, the Bank’s Webcasting Station

To keep the momentum going on increasing the Bank’s transparency, I am circulating this letter that will be sent to President Zoellick.  CIVICUS, Publish What You Fund, the Bank Information Center, New Rules for Global Finance, Government Accountability Project and several others have quickly signed on and I think many others will soon join.  I would be pleased if you would join and grateful if you think appropriate to circulate with your own network.  A positive outcome for re-establishing B-SPAN, the Bank’s Internet-based webcasting station as a channel of unedited broadcasts of Bank policy dialogues and debates would open a whole new world to civil society groups and the public.  Please feel free to contact me with questions or for the latest update on signers.   Best regards,

 David Shaman, dshaman5@verizon.net

 * * * * *

Mr. Robert Zoellick

President

World Bank

1818 H Street, NW

Washington, DC 

Dear President Zoellick:

We, the organizations and individuals undersigned, write to urge you to use your authority to expand funding for B-SPAN, the Bank’s Internet-based webcasting system, so that it can fulfill its original mandate.

A recent New York Times article on transparency issues at the World Bank [1] mentioned the important role that B-SPAN used to play in promoting the transparency of the institution. In the aftermath of the Times story, the Center for Global Development, a major Washington think tank on international development, called on the Bank to re-invigorate B-SPAN with appropriate resources. [2]

As background, B-SPAN was initially a joint venture of the Development Economics Research Group and World Bank Institute (WBI) and was launched in 2000.  The objective of the service was to film the plethora of policy dialogues, seminars and conferences taking place inside Bank headquarters and stream the content to the public.  B-SPAN was launched with a crucial principle: absolute transparency, meaning no editing of the webcasts. 

B-SPAN was designed to be a conduit of information between the Bank and the public.  The motivation to begin B-SPAN was to provide development practitioners across the world with an opportunity to access knowledge critical in helping them reduce global poverty and enhance sustainable development. It also provided Bank personnel with an opportunity to connect and expand communications opportunities with external constituencies.

After its launch, B-SPAN was enthusiastically embraced by thousands of Bank staff and the viewing public.  Between 2000 and 2004, B-SPAN disseminated more than 700 unedited webcasts of Bank events to the public.  In 2004, B-SPAN webcasts were watched by one-quarter million viewers and its website accounted for almost 2% of the entire Internet traffic the Bank received that year.

Unfortunately, in 2005, WBI decided to use its resources elsewhere. Its funding of B-SPAN declined precipitously and the cost of the service for Bank staff became unaffordable.  The service entered a rapid decline in the amount and diversity of content it could make available.  It remains in this condition today.  However, much has changed since 2005.  New streaming and social media technologies that didn’t exist then can now disseminate B-SPAN streams at very low cost and with mobile phone applications these events can now reach countless millions.

As demonstrated by the updated Access to Information Disclosure Policy, Open Data Initiative, financial data disclosure and plaudits for its aid transparency from a Publish What You Fund report, the World Bank has made important progress in recent years on transparency.  The re-invigoration of B-SPAN as an open, uncensored channel of internal policy dialogues being streamed to the public would be another fundamental leap forward.  The knowledge it would provide government officials and policymakers in shareholder countries – content often generated from their sources and resources – as well as academics, researchers and development practitioners globally would have a profound impact on the development and aid communities.  It would also have tangible benefits for the Bank as it would focus global attention upon the institution as the best source of knowledge on development, thereby generating new business opportunities. 

In the words of the Center for Global Development: “literally thousands of events go uncovered every year because they don’t have dissemination budgets — a great loss to the global development community that can be rectified by the stroke of a high-level pen in the President’s office, or in the offices of the Bank’s External Relations Vice Presidency or the World Bank Institute.  Thanks to President Zoellick and his colleagues, the Bank has opened many of its databases to the global community.  We urge that the same coverage now be extended to the extraordinary diversity and depth of its internal development dialogue:  Expand B-Span to fulfill its original mandate, using the latest innovations in low-cost web access to share the Bank’s internal treasure trove with the global community.”

We urge you to follow this recommendation.  Thank you for your consideration of this suggestion and your continued leadership on transparency issues.

Sincerely,

1. ActionAid USA
2. Action for Economic Reforms, Philippines
3. Americans for Informed Democracy
4. Anabel Cruz, Director, Communications and Development Institute, Uruguay
5. Andreas Bummel, Chairman, Committee for a Democratic United Nations
6. Arun Gandhi, founder, Gandhi Worldwide Education Institute, and grandson of Mahatma Gandhi
7. Axel Dreher, Chair of International and Development Politics, University of Heidelberg, Editor, Review of International Organizations
8. Bank Information Center, Washington, DC
9. Bernhard G. Gunter, President, Bangladesh Development Research Center
10. Bessma Momani, Senior Fellow, Centre for International Governance and Innovation, Associate Professor, University of Waterloo
11. Both ENDS, Netherlands
12. Bruce Jenkins, international development consultant and IFI transparency advocate
13. Bruce Rich, attorney, Washington, DC, author Mortgaging the Earth: The World Bank, Environmental Impoverishment, and the Crisis of Development
14. Bruce Tasker, editor, Blowing the World Bank Whistle Blog in Armenia
15. Campaign for Good Governance, Bangladesh
16. Catherine Weaver, Associate Professor, LBJ School of Public Affairs, University of Texas, author, Hypocrisy Trap: The World Bank and the Poverty of Reform
17. Center for International Environmental Law, Washington, DC
18. Central and Eastern European Bankwatch Network, Czech Republic
19. Centre For Social Concern, Malawi
20. Centre National de Cooperation au Developpement, Belgium
21. Cinnamon Dornsife, Acting Co-Director, International Development Program, John Hopkins University, and former U.S. Executive Director to the Asian Development Bank
22. CIVICUS: World Alliance for Citizen Participation, South Africa
23. Claude I. Salem, Executive Director, Partnerships for Capacity Development
24. Clyde Prestowitz, President, Economic Strategy Institute
25. Daphne Wysham, Fellow, Institute for Policy Studies
26. David Hunter, Director, International Legal Studies Program, Washington College of Law, The American University
27. David Phillips, author, Reforming the World Bank: Twenty Years of Trial and Error
28. David Shaman, author The World Bank Unveiled: Inside the Revolutionary Struggle for Transparency
29. Development Group for Alternative Policies, Washington, DC
30. Don Kraus, CEO, Citizens for Global Solutions
31. Don Tapscott, author, MacroWikinomics: Rebooting Business and the World, and Wikinomics: How Mass Collaboration Changes Everything
32. EURODAD, Belgium
33. Feminist Task Force of the Global Call to Action Against Poverty, New York
34. Fiseha Eshete, Assistant Professor of Economics, Bowie State University
35. Friends of the Earth US
36. Gary Edwards, Chairman and CEO, Ethos International, Inc.
37. Gender Action, Washington, DC
38. Global Network Latin America, Peru
39. Government Accountability Project, Washington, DC
40. Health Poverty Action, United Kingdom
41. Ilka Camarotti, international development consultant
42. INKOTA netzwerk, Germany
43. Institute of Global Responsibility, Poland
44. Integrated Social Development Centre, Ghana
45. International Accountability Project, San Francisco
46. International NGO Forum on Indonesian Development
47. Isaac Otabor, Fiscal Responsibility Commission, Nigeria
48. James M. Roberts, former U.S. State Department Foreign Service Officer
49. Jeffrey Winters, Associate Professor and Honors Program Director, Northwestern University, co-editor, Reinventing the World Bank
50. John Christensen, Director, Tax Justice Network
51. John Weeks, Professor Emeritus, University of London
52. John Williamson, development economist, author of the phrase “The Washington Consensus”
53. Jonathan Fox, Professor of Latin American and Latino Studies, University of California, Santa Cruz
54. Jorge Daniel Taillant, Founder, Center for Human Rights and Environment, Argentina
55. Jubilee Scotland
56. Jubilee USA
57. Karen Chevallier, Project Chief, Aménités
58. Karen Crump, Information Services Latin America
59. Karen Joyner, international development consultant
60. Kevin Gallagher, Associate Professor, Global Development and Environment Institute, Boston University
61. Kris Dev, President and CEO, Life Line to Business, India
62. Leon Kukkuk, international development consultant
63. Liane Schalatek, Associate Director, Heinrich Boell Foundation North America
64. Liviu Vedrasco, Chief of Party, Pandemic Preparedness Program, International Medical Corps
65. Luis Triveño, Chief Executive Officer, Institute for Liberty and Democracy, Peru
66. Dr. Maartje van Putten, Managing Director, Global Accountability, The Netherlands, former member of the World Bank Inspection Panel
67. Margaret Keck, Professor of Political Science, John Hopkins University, co-author, Activists Beyond Borders
68. Marianists International NGO, New York
69. Maryknoll Office for Global Concerns, Washington, DC
70. Maurice McTigue, Vice President, Mercatus Center, George Mason University
71. Max Kummerow, Chief Economist, Greenfield Capital
72. Michael Brown, President, Satya Development International
73. Michael Chibba, Managing Director, International Centre for Development Effectiveness and Poverty Reduction, Canada
74. Missionary Oblates of Mary Immaculate, U.S. Province
75. Nagy Hanna, former senior advisor and lead corporate strategist, World Bank
76. National Ecological Centre of Ukraine
77. New Rules for Global Finance Coalition, Washington, DC
78. Norwegian Forum for Environment and Development
79. ODA Watch, Philippines
80. Oil Workers Rights Protection Organization Public Union, Azerbaijan
81. Pacific Environment, San Francisco
82. Per Kurowski, former Executive Director, World Bank, 2002-2004
83. Peter Burgess, CEO, Community Analytics
84. Prague Global Policy Institute (Glopolis), Czech Republic
85. Publish What You Fund, United Kingdom
86. Rajesh Makwana, Director, Share The World’s Resources
87. Ralph Luken, former UNIDO official
88. Renee Dankerlin, Senior Research Associate, Beacon Hill Institute
89. Rick Reibstein, Lecturer, Environmental Law and Policy, Boston University
90. Rita Pandey, Professor of Economics, National Institute of Public Finance and Policy, India
91. Robert Hans, Senior Managing Director, IOS Partners, Inc.
92. Sierra Club, Washington, DC
93. SLUG (Slett U-landsgjelda), Norway
94. Social Justice Committee of Montreal
95. Steve Berkman, author, The World Bank and the Gods of Lending
96. Susan Aaronson, Professor, George Washington University, author, Taking Trade to the Streets: The Lost History of Public Efforts to Shape Globalization
97. Sustainable Energy Watch, France
98. Teresa Kramarz, University of Toronto
99. Tom Farer, Professor, University of Denver, former Dean, Joseph Korbel School of International Studies
100. Transparency International USA
101. Urban Poor Associates, Philippines
102. VOICE Bangladesh
103. Volta Basin Development Foundation, Ghana
104. Waleed Ahmad Jameel Addas, economic advisor, Islamic Development Bank
105. WEED – World Economy, Ecology and Development Association, Germany
106. William Pace, Executive Director, Institute for Global Policy
107. World Development Movement, United Kingdom

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 [1] Stephanie Strom, The New York Times, World Bank Is Opening Its Treasure Chest of Data, July 2, 2011

 [2] David Wheeler, Michele de Nevers, Center for Global Development, B-SPAN and a Broader Vision of Public Information from the World Bank, July 5, 2011

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Should Accountability for Civil Society Organizations Receive the Same Attention as It Does for International Financial Institutions? (As reprinted from AidInfo.org)

Whenever there is a discussion about governance regarding international development, most people tend to focus on large public institutions such as the World Bank and regional multilateral development banks (MDB), International Monetary Fund and/or bilateral development agencies.  These organizations are constantly under scrutiny to improve transparency of their documents, meetings and aid flows as well as increase accountability for performance of lending activities and institutional practices.  These agencies face pressure to provide quantitative data and information in which their rhetoric and performance can be measured.  This is a worthwhile discussion because a lack of transparency and accountability by these organizations can have important and lasting impact on the lives of people living in poverty.  But is it the only discussion worth having?

The question came up during this month’s World Bank-IMF spring meetings where a cornucopia of Bank and Fund officials, finance ministers and civil society representatives met to discuss a range of international finance and development issues.   A session entitled “The Policy of Transparency and Accountability of International Financial Institutions (IFI’s) vis-à-vis Governments, Private Companies, and Civil Society” took a surprising turn when it focused less on what public institutions could be doing and more on what civil society organizations (CSO) should be doing. 

Some questioned whether CSO’s should be the focus of discussion, because in theory there is universal agreement that all actors should be accountable.  In practice, however, it is less clear what is happening.  Accountability for CSO’s is essential as it is for the IFI’s and while the clamor is for public institutions to reform and perform, on this point it is equally relevant that CSO’s do the same.  In fact, I don’t believe it is an understatement to suggest the topic is not just relevant but goes to the core of helping CSO’s make the case that IFI’s need to improve.  CSO’s often claim that they are accountable to their donors who vote through their donations.  This position suggests a focus on accountability upwards, but it’s not applicable regarding the impact of CSO advocacy or activities on people living in poverty.  Often, objective observers must rely on anecdotal evidence, which is not irrelevant but is it enough?  Many CSO’s make their financial records and fiduciary obligations publicly available.  The Bangladeshi-based BRAC is an example of a CSO that actively provides such information.   These are useful metrics, but are they the only measurements by which these organizations should be held to account?  Are there comparable metrics that CSO’s request of IFI’s that they also should be producing and disseminating to prove and improve their accountability?

Actors within IFI’s have questioned CSO legitimacy suggesting they are self-appointed and un-elected ”do-gooder’s” that are not necessarily representative of the populations they serve as are the duly-elected government’s whose officials populate the governing bodies of the Bank, Fund and other MDBs.  In 2001, we might recall that former Bank Chief Economist Larry Summers said, “I am deeply troubled by the distance that the Bank has gone in democratic countries toward engagement with groups other than governments in designing projects … I have to record very considerable doubt about the wisdom of setting up anyone other than democratically-elected governments as the counterpart for the establishment of Country Assistance Strategies.  When there is an attempt to reach within society to develop Country Assistance Strategies, there is a real possibility, it seems to me, of significantly weakening democratically-elected governments.”

Some have also questioned whether CSO’s have the same expertise as IFI economists, development practitioners and technical specialists.  This second argument, however, seems weaker and based on a sense of elitism.  We may assume that CSO actors, while often at a disadvantage regarding resources, are knowledgeable and dedicated and many times we can see them leading change and innovation on the ground.

Nevertheless, the question of CSO accountability remains relevant.  CSO’s should think carefully about how they may demonstrate their accountability, not just with their donors and foundations, but with stakeholders in the field and IFI’s at the bargaining table.  The more metrics CSO’s can provide that demonstrate this, the more powerful is the case they can make to prove their legitimacy in demanding that IFI’s must demonstrate and improve their own accountability.  Evidence of CSO’s recognition is already emerging.  While donors have been responding to pressure from external observers to increase information on their aid flows (see the London-based CSO Publish What You Fund’s Aid Transparency Assessment), US-based InterAction recently launched an NGO Aid Map which collects CSO’s project-level information to share with donors, governments and the public.

In my recent book, The World Bank Unveiled: Inside the Revolutionary Struggle for Transparency, I suggested one possible approach that would boost accountability for CSO’s and IFI’s simultaneously.  My proposal was to create a seat on the World Bank’s Board of Executive Directors for a civil society representative.  Providing CSO’s a seat at the table would provide oversight and input on Bank decisions and thereby increase by some measure the institution’s accountability.  It would concurrently increase CSO accountability because this actor would now have a role in the decision-making process.  There are precedents: Civil society actors now play formal roles on the FAO’s Committee on World Food Security and some multi-donor trust funds managed by the Bank.  Such a development should not be viewed as a panacea for what ails the relationship between the Bank (and other IFI’s) and their CSO counterparts.  Moreover, such an eventuality would entail a process by which complex legal and political questions would need to be examined, debated and sorted out.  Nevertheless, such a discussion would be worth having because it goes to the heart of what this issue of accountability truly means.

Has The Domino Theory Been Proven Correct?

Recently, a friend spoke to me about his time as a cadet at West Point in the mid-1960s.  As the war in Vietnam began to heighten, he felt increasingly disillusioned by what he saw and heard.  Something wasn’t adding up.  He decided to leave the Army.  “I was gung-ho,” he said.  Then why leave?  “I remember them sitting us down in a big room and telling us about The Domino Theory,” he continued.  “But it was a lie.”  Those of us either adolescent or not yet born to the times will have difficulty sharing the era’s emotional immediacy as would one of its participants.  I won’t pretend to, but I did wonder if viewed within the prism of 21^st Century events whether The Domino Theory had legs or if my friend was right.

Many Americans may recall that the theory was prominent during the years leading up to the Vietnam War: If communism is not halted from bringing South Vietnam into its domain, then it will have a domino effect on all Indochina and the entire region will follow Vietnam into the orb of the Soviet Union.  Closer examination would reveal this theory was a central theme of American foreign policy as far back as 1946 when the Soviet Union began propagating small revolutions throughout Central and Eastern Europe.  With the fall of Chiang’s regime in China in 1949, policymakers wondered whether a domino effect would take place in Asia, first in Korea and then Laos and Vietnam.  Ultimately the focus turned to Central America in the 1980s.

Some Americans may have felt its political leadership, whether inside the Eisenhower, Kennedy, Johnson or Nixon administrations may have been disingenuous in espousing the theory with regard to Vietnam, but there is ample documentation to suggest officials of the period were resolute and steadfast in their belief that a domino effect was a reality and even an eventuality.  Their critics might argue that The Domino Theory did not prove true in Indochina.  Laos and Cambodia may have become communist dictatorships with Vietnam, but Thailand, India, Malaysia, Indonesia, Philippines and Burma did not.  Critics might further argue that theory proponents did not factor into their equation that communism was not as monolithic as they believed: China’s version of communism did not reflect Russia’s or the nationalist nature of Vietnam’s, nor did the particulars of Vietnam’s revolution reflect those of other countries in the region or in the Americas.  Therefore, one might conclude context matters.  So, opponents of the theory may be right that the application of The Domino Theory did not prove true in Indochina.  But did that mean the theory itself was not robust?  Perhaps a more holistic review of whether it was legitimate or a lie may be worth further consideration.

As we know, communism was a revolution of the fist.  As we shall see, democracy is a coup d’état’s of words.  The revolutions sweeping through the Middle East this spring provide answers.  The sparks that began in Tunisia have caused a wildfire of massive vibrations throughout the Arab world.  Regime change has taken place in Egypt and Tunisia already.  Civil war has unfolded in Libya.  Authoritarian governments in Yemen, Bahrain, Jordan, Syria and elsewhere are under constant and growing pressure from their populations.  If The Domino Theory is not legitimate, then why would Saudi Arabia send troops to Bahrain?  To be sure, motivations may vary between countries: Some populations yearn for the end of autocratic rule while others feel disenfranchised by the lack of economic growth and opportunity.  But who does not think that China, an authoritarian government who has historically felt pressured to maintain its record rate of growth as a mechanism for suppressing discontent, is not watching closely to see how events are unfolding the Middle East?

Is The Domino Theory as applied to the Middle East different?  It is in at least two contexts.  First, in juxtaposition with Cold War events, it is a domino effect in reverse: Authoritarian regimes are being toppled in favor of democracies (at least we think and hope).  Second, in addition to the underlying sentiments of their publics, the engine driving change is the technological advances of our time.  Social media tools such as Facebook and Twitter are allowing those without formal power or formal channels to enact change to connect with one another, network and canvass.  The alacrity of change in the region is a by-product of the instantaneous connectivity of unrelated but like-minded individuals.  How robust would The Domino Theory have been forty years ago if these communications tools had been available then?  We can speculate about how American policymakers and Asian guerillas may have internalized these opportunities, but that is a different debate.  What matters is that this domino effect appears truly to be a result of the following: A virtual world of democratic coup d’état’s of words.

Then, let’s circle back to the original question again.  Were policymakers who adhered to The Domino Theory during the Cold War myopic or canny?  And, therefore what is the final analysis?  Historians should consider current events for unmistakable clues: Circumstances undermined implementation of the theory in the 1960s but it is being played out today.

If the World Bank is to Reform, Then What Reforms?

Previously, I offered thoughts on drivers of reform for the Bank.  External pressure has compelled the Bank to review what reforms it should implement.  In the last few years, many development think tanks and NGOs have focused their attention on: Open and transparent selection of future Bank presidents; increasing the voting weight of developing countries on the Bank’s operating boards; realigning the representation, composition and responsibilities of its Board of Directors; and, increasing access to Board proceedings and materials and Bank project documents.  All have merit.  They will make the Bank’s decision making more representative of its membership.

In recent years, a number of academics have analyzed how the Bank reacts to reform efforts.  Research on the implementation of the Strategic Compact of 1997 (a series of reforms launched by former president James Wolfensohn) was conducted.  The academics came to a universal conclusion: The bureaucracy of the Bank internalized the new reforms to converge with its existing norms.  Translation: The Bank adapted the reforms to fit into its existing status quo.  This is important research.  Indeed, the Bank’s history has been to use commissions, panels and reports to mute or escape criticism of its internal governance.  When compelled to change, reforms enacted mirror existing practices or contain loopholes that allow internal players to bypass full accountability.

As noted above, these types of reforms are important steps in changing the way the Bank does business.  They seek to restructure the high-level relationship between the Bank and its stakeholders and shareholders.  I also believe they are not enough.  Perhaps because of my own experiences within the organization, I think a different series of reforms designed to alter the institution’s cultural norms are in order.  Changing how people internalize incentives will change how they behave and ultimately how the Bank performs.  To address internal structural inefficiencies that impede the institution’s ability to implement its poverty reduction mission, Bank stakeholders and shareholders should consider the following:

1. Accountability mechanisms within the Bank are flawed because there is an inherent conflict of interest when the Bank is both judge and jury.  Therefore, establish an evaluation unit of its lending activities that is completely independent and unconnected with the Bank.  Evaluations should also place more emphasis on the project sustainability phase as opposed to the project approval phase.  This will dilute the “approval culture” of the institution and increase managerial accountability.
2. Moreover, reform the Bank’s Conflict Resolution System so that decisions are in the hands of independent arbitrators.  These decisions would be binding and arbitrators would have the latitude to impose sufficient monetary penalties for successful plaintiffs.  Currently, the Bank’s management has jurisdiction over CRS decisions which undermines the confidence staff have with its objectivity.  Making CRS independent of the Bank’s management would weaken the institution’s culture of fiefdoms, increase managerial accountability and give staff tangible protections from managerial abuses.
3. Revise the managerial selection process to emphasize leadership and entrepreneurial skills rather than relying primarily on academic or technocratic excellence.  The Bank recruits and promotes technocrats and academics with few proven managerial skills.  Internal and external Bank surveys have found its managerial cadre well educated but overly technical, excessively arrogant and highly bureaucratic.  The institution needs a more holistic approach to finding managers or promoting staff to managerial positions that places greater emphasis on leadership and entrepreneurial skills.  This would revitalize the institution’s personnel that more than two decades of staff surveys indicates is mired in fear and complacency.
4. Create a seat on the Board for a civil society representative.  This would increase civil society’s inclusion and participation in the Bank’s lending activities and development policies, reduce and de-politicize NGO criticisms of the Bank and increase civil society accountability for Bank decisions.
5. Reconfigure the World Bank Institute (WRI), the pedagogical arm of the institution, so it moves away from its current model that imposes institutional viewpoints of development theory and practice upon borrowing country officials and toward a model of open-learning that not only tolerates but fosters contradictory views.  Former Bank economist David Ellerman’s research notes development agencies such as the Bank have traditionally served as library storehouses dispensing knowledge nuggets.  Instead, he suggests the Bank should serve as a knowledge broker offering a variety of experiences and allowing recipients to decide which nuggets of knowledge fit.  Ellerman believes that in the current information revolution the library storehouse model, the one on which WBI is based, will lose influence over time.  So do I.
6. Reestablish a transparent and uncensored broadcasting medium that provides access to all development practitioners and creates a platform of debate and discussion on development ideas, theories and practices.  The previous initiative called B-SPAN was essentially de-funded by powerful opponents because it ran counter to the institution’s culture of hoarding information and releasing perfect information.  B-SPAN used the Internet to broadcast uncensored (and therefore imperfect information) of Bank policy dialogues to global audiences.

Is Reforming the World Bank Possible?

In April 2009, the G-20 pumped funds into key international financial institutions (IFI) such as the IMF and Bank to mitigate damaging effects of the global economic downturn on the most vulnerable developing countries.  Estimates from international organizations, including the Bank, indicated the crisis was returning tens of millions of people back into abject poverty.  The G-20’s decision and the impact of the crisis have heightened pressure on the Bank, both from a political and a humanitarian level to achieve results.  It has also provided a new opportunity for critics of the Bank to call for reforms.

For years, developing countries have wanted more say in Bank decisions.  External watchdog groups have urged the Bank to reform its internal governance and information disclosure policies.  One outcome of the global economic crisis has been to successfully pressure the Bank into implementing internal reviews for both areas.  The results have been mixed. 

In July 2010, the Bank implemented a new “Access to Information” disclosure policy.  The new policy was formed after significant consultation with civil society actors and key external players have praised the result.  Most notably, the Bank has shifted from a “positive” list to a “negative” list: There is a presumption of publicly disclosing a document unless it is classified as an “exception” instead of listing document types that can be disclosed and nothing else.  Another important advance is the ability of external stakeholders to appeal for disclosure after a document has been classified for non-disclosure. 

Nevertheless, watchdog groups believe there are gaps in the new policy.  Draft documents are considered “deliberative” and as such can be considered an exception for disclosure.  Moreover, member governments and Bank contractors can veto the disclosure of documents, there are limitations on the appeals process and access to documents from Board of Executive Directors remains largely unavailable or available only after many years.  On balance, many observers view the new policy is seen as a step forward for the Bank in terms of its transparency – and one that should be acknowledged – but also as a journey yet to be completed. 

In late 2008, the Bank launched a commission to examine internal governance reforms.  The commission, chaired by former Mexican president Ernesto Zedillo, made its recommendation in October 2009.  The commission offered a number of suggestions, but the Bank’s enthusiasm to embrace them can be best characterized as lukewarm.  (One notable exception is, in light of the global economic crisis, the commission supported strengthening the Bank’s resource base and the institution has moved aggressively to secure its first major capital increase in two decades.)

The Bank did move to give more voice and vote power to developing countries this past spring (a commission recommendation), but the change was incremental and the 50-50 split sought by many development think tanks and NGOs remains years away.  Interestingly, the Bretton Woods Project, a UK-based NGO, said its analysis indicated voting power for low-income countries may have even declined.   The concept of a transparent and merit-based selection for the next Bank president – and possibly a non-American – has stagnated for the time being.  It could be DOA given reluctance within some U.S. circles, but only a succession process may actually provide the true impetus for whether this informal policy will change.

These developments suggest change can happen.  When it does it is usually the result of large forces pressuring available fault lines.  However, when change does occur, it tends to be incremental, moving with sudden lurches and equally sudden periods of stillness.  My experiences in the Bank suggested drivers of change were opaque.  From my vantage point as an internal reformer, operating from within the organization offered opportunities not available to outsiders.  On the other hand, it also imposed limitations.  There were times when I came to believe true change must come from external forces.  As it turns out, both suppositions may be wrong.  Perhaps the will or efforts of internal or external reformers is not enough.  Only some tectonic shift of the world order can force the Bank or any IFI to reform.  The lesson of the global financial crisis may be that it may take an international crisis of some magnitude to shift the Bank’s thinking about its internal governance and accountability mechanisms.

This is the fifth of a series of blogs on the World Bank and transparency, accountability and reform issues.  I invite you to share your own opinions with a wide community of international development practitioners and interested readers

The Structural Inefficiencies of the World Bank (Part 2)

In the previous blog post, I examined four key structural defects in the World Bank’s bureaucracy that reduce effectiveness and ultimately create hurdles for its poverty reduction activities.  In this vein, I continue with several more observations that suggest effectiveness is undermined.

1. Maintaining the status quo compels Bank managers to be risk-averse.  This tendency exists in tandem with another characteristic known in the institution as its “approval culture.” Managerial success is measured by the volume of outputs: The amount of projects approved and lending dispersed. Personnel who are successful in getting projects accepted by the board climb through the hierarchy.  Banks like to make money. So, lending projects that are approved are ones considered safe or of less risk, but significant evidence suggests it does not translate into insightful lending or successful projects. 
2. The Bank is not a normal business. It seeks to make a profit, but success is not measured by profits. Managers may be considered successful if their projects receive board approval, administer units and tasks within annual budget allocations and appear loyal to superiors.  In such an environment of strict funding allocations, short-term considerations often take precedence over long-term and strategic interests.  Moreover, there is little reward for the texture of their administration – for their leadership qualities or how they administer their staffs.  Successful technical service and subservience lead to promotions.  Managers are rarely held accountable for poor leadership or abuses of staff.  Since there is little accountability for managerial abuses of Bank personnel, staff productivity has declined and staff cynicism has grown.
3. Former Bank economist David Ellerman has researched the concept of the institution’s adherence to “Official Views.”  “Power,” he wrote, “corrupts the ecology of knowledge—the conditions under which knowledge grows and flourishes. Those in power in an organization tend to enshrine their views as the Official Views … Experimentation, debate and the exercise of critical reasons are curtailed to stay within the safe boundaries of Official Wisdom.  To those in power, others who argue within the organization against Official Views only reveal their unreliability and lack of fitness for positions of authority. Those who argue against Official Views outside the organization – particularly with any public notice—are seen as traitors being disloyal to the organization itself.”  Ellerman questioned whether the Bank as a knowledge institution should even have Official Views when the issues, causes and questions surrounding development and poverty reduction are vast, complex and changing.
4. Some structural inefficiency is unavoidable and inevitable.  The multi-cultural Bank has a plethora of personalities, each with different perceptions of what is important and how the institution should act.  Senior management, economists, financiers, engineers, environmental auditors, transport specialists, urban planners, external affairs, unit managers, administrative staff and country-based staff all have their own opinions.  Personnel come from almost every country in the world.  Even some from the same country have grown up in sub-cultures that are entirely different.  Individuals can view the same issue and draw diametrically different conclusions.  The result is an institution that often acts in conflicting ways and thereby creates institutional hypocrisy on a daily basis.  

What are some of the Structural Inefficiencies of the World Bank? (Part 1)

One well-known aphorism that has circulated the halls of the World Bank over the years is it is generally less than the sum of its parts.  Part of this tongue-in-cheek observation is based on a cynicism that can grow within any bureaucracy.  However, with regards to the Bank, it is also based in part on the cold reality of its unique environment.  From personal experience and research conducted for The World Bank Unveiled, I have identified a number of structural inefficiencies that keep the Bank from reaching its full potential in achieving its poverty reduction mission.  Here are four key ones:

1. Senior management sculpts visionary reforms to tack with the geo-political pressures of the Bank’s member countries, external watchdogs, media and the evolving global financial and economic environment.  This has led senior officials to engage in regular reorganizations, but to implement reforms they must rely on the institution’s mid-level management.  As these external pressures have grown, the information revolution and a heightened interconnectivity of the global economy have reduced the amount of time senior officials have to react.  As a result, their reliance on mid-level management to implement these reforms has increased.  Concurrently, mid-level management is in reality a culture of fiefdoms.  The internal culture of the Bank, hardened over six decades, rewards managers for conservatism and adherence to the status quo.  So, these fiefs are wedded to maintaining the status quo as a strategy for advancement and accruing power.
2. The institution is layered with a rigid hierarchy. The separation between senior officials and staff is stark and ingrained.  Such an environment creates warped perceptions and information vacuums.  Senior officials, focused on the big picture, are often given a skewed view of how things actually operate at the staff level. Problems and potential problems become hidden as accurate information often fails to move up the chain of command.  Additionally, senior management’s intense desire to not receive unpleasant information results in an institution-wide fear of candor.   Finally, these behaviors are exacerbated by one of the native instincts of the institution’s fiefs – an aversion to information sharing and transparency.
3. The Bank’s culture is one that disdains selectivity and embraces the notion it must do many things well. As a result, staff is continually addressing new challenges, engineering temporary fixes, and moving on to the next problem.  Since it tries to do everything, preventable failures are inevitable and activities it pledges to support are not always funded.
4. Institutional hypocrisy, a theory espoused by Robert Wade of the London School of Economics, occurs when the Bank tries to “control its external environment and manage the contradictory demands being made by states, NGOs and firms.”  The Bank provides actions/services and talk.  Clients and customers value its services.  Spectators and watchdogs values what it says.  The disconnection between the two is common and real.  Wade provides examples.  One includes: “increase the density of declarations and policies designed to satisfy and pacify spectators and watchdogs, and increase its promises to bring its actions into line with its policies, while not making the corresponding resource allocations.”

These observations are not to say the World Bank does not do some things well or to impugn the motives and actions of the dedicated professionals who work there.  However, my experiences suggest these structural inefficiencies are systemic and have led to both unsound decisions and a failure to learn lessons from failure. 

This is the third of a series of blogs on the World Bank and transparency, accountability and reform issues.  I invite you to share your own opinions with a wide community of international development practitioners and interested readers.

Is the World Bank an Effective Steward on the Global War on Poverty?

In 2008, The New York Times revealed that pledges by the richest nations such as the U.S. and Western Europeans in Monterrey in 2002 and Scotland in 2005 to increase development assistance had not been met.  Times research indicated promises to reach 0.7% levels of GDP had in fact only reached 0.28%.  The U.S. was only at 0.16%.  Concurrently, most experts agreed key U.N. Millennium Development Targets for reducing global poverty by 2015 would not be achieved.  The World Bank is the leading international institution charged with reducing poverty.  Prior to the 2008 global financial downturn, the Bank failed to convince rich donors to live up to their commitments.

 I believe there were three basic reasons why the Bank had not been a more effective advocate during the 2000s:

1 -  Donor countries were deeply skeptical the Bank’s lending was effective.  Research from a number of development think tanks, economists and NGOs question suggested important shortcoming in the Bank’s lending effectiveness.  Weaknesses in the Bank’s lending portfolio undermined appeals by the institution to donors for more aid.

2 – Borrower countries found the Bank’s lending “conditions” stringent, draconian and often creating unnecessary hardships on their populations.  Conditions, such as structural adjustment lending that forced poor countries to reduce public spending, increase savings and reduce inflation may have been sound macroeconomic policies but belied the political realities facing developing economies.  As a result, borrowers have increasingly shied away from the Bank and turned to private capital financing for their development needs.  This led to an evolution of the Bank’s portfolio with more emphasis on emerging market economies rather than developing economies.  And importantly, the Bank influence over client countries weakened.

3 - Shareholders – donor and borrower members – and stakeholders such as NGOs, community-based organizations and private citizens viewed the Bank as a monolithic society where well-connected financiers close their doors to debate the economic fate of millions.  Critics accused the Bank of having a culture of secrecy, an aversion to transparency and a lack of accountability.  As a result, they hesitated to trust the Bank.  The result was the moral standing of the institution had been weakened and its ability to advocate for policies it supports had deteriorated.

In April 2009, the G-20 met in London and pledged to infuse $1.1 trillion in capital to the Fund and Bank.  Nevertheless, concerns for donors, borrowers and civil society stakeholders about the Bank have not been fully addressed.  Questions remain as to whether the Bank will be any more effective in using the aid provided from the G-20 or future aid than it had before the global economic downturn.

This is the second in a series of blogs to be offered in the next few months on the World Bank and transparency, accountability and reform issues.  I invite you to share your own experiences and observations with a wide community of international development practitioners and interested readers.

The World Bank and Transparency: A Perspective

1 – The World Bank and Transparency: A Perspective

As the author of a new book, The World Bank Unveiled: Inside the Revolutionary Struggle for Transparency, I recount my dozen years inside the institution.  I examine a number of aspects of the organization that range from its culture and bureaucracy to its day-to-day activities.  Among the key questions the book analyzes is the meaning of transparency inside the Bank.  In fact, my experiences suggest it means different things to different internal stakeholders and that these sensibilities are often conflicting and reflect a vast array of backgrounds.  For example, in recent years the Bank merged a knowledge sharing mantra into a culture that horded information and it implemented greater disclosure measures that were often viewed by external observers as rhetorical flourishes. 

When he left the Bank in 2005, former President James Wolfensohn said transparency reduces corruption, reduced corruption leads to better governance and better governance increases development.  Transparency, he believes, is the key.  But history suggests the Bank’s management believes transparency is something that should apply to its clients and other external stakeholders.  Its enthusiasm regarding the internal application of transparency seems less than robust.  Consider the following:

• It has a long history of reluctance toward releasing documents external observers believe are central to helping foster development.
• When its staff has gone public with views that counter the Bank’s traditional orthodoxy, they have been dismissed.  Nobel Prize winning economist Joseph Stiglitz and William Easterly are two prominent examples.
• In 1997, as part of its Strategic Compact reorganization, the Bank began to recast itself as a “knowledge bank.”  It has not been a success because the cultural instincts of the institution favor information hoarding rather than knowledge sharing.  The World Bank Institute, the branch of the institution charged with implementing knowledge sharing, is a pedagogical unit that promotes fostered learning.  Former Bank economist David Ellerman’s insightful paper, Helping People Help Themselves: Toward a Theory of Autonomy-Compatible Help documents how fostered learning creates client dependency which diametrically counters knowledge sharing.

The World Bank Unveiled offers numerous other examples.  But much more importantly are the perspectives of others who have worked inside or outside the Bank.  This blog post wants to encourage others to share their own experiences and stories …