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 …

Advertisements

10 thoughts on “The World Bank and Transparency: A Perspective

  1. Dear Colleagues

    I did my first World Bank assignment in 1978. Prior to this I had had 20 odd years of professional and corporate management experience. My first impressions were that the World Bank was doing important work, and doing it wrong, and in a way that was not making the best use of scarce resources for development. In subsequent years I tried to influence project design, and the whole project cycle so that it would be more effective … but met with extreme resistance. Part of my training included auditing … and when it becomes difficult to get answers, you know that there is something that is being hidden. In the case of the World Bank group there are many things being hidden, with these three of considerable importance (1) a complete failure to address the issues of corruption in all its manifestations (2) a failure to measure the performance of the projects and to take steps to improve performance; and (3) a failure to look inward at the high cost and poor performance of the World Bank as an organization, as well as the high cost/low productivity of staff.

    Unless you have worked outside the relief and development sector, you cannot appreciate how poor the World Bank performance has been for several decades! There have been critics for a very long time, but rather little reform of any significance!

    Sincerely
    Peter Burgess
    Community Analytics

    1. Well said, Peter. We are partners in corruption elimination in the Transparency and Accountability Network (TrAcNet).

      I had written an article some time back, of which you know. But for the benefit of others, i am copying it here:

      A prescription to end corruption

      Unique identification of every citizen will help kill the corruption malaise in developing economies

      Kris Dev,
      ICT & e-Gov Consultant, Manthan Awardee for e-Inclusion & Livelihood Creation

      What ails the under developed and developing nations? Reply: corruption leading to self perpetuating poverty. Reason: lack of honesty & transparency. Result: lack of accountability for sustained growth. Economy is divided between rich & poor; the rich are growing richer and the poor are growing poorer. The poor cannot afford essentials such as food, clothing, shelter, health, education and social security. The division is so sharp between communities, while a rich family can afford to spend Euro500 per week on food items, a poor family of the same size can hardly spend Euro5 per week.

      Does this mean all citizens living in a poor nation are poor? Well the answer is a ‘NO’. The wealth in a under developed/developing nation is skewed. Almost 80-90% of the wealth of the nation is in the control of say 5-10% of the population. The majority of the population hardly has access to any wealth and live in abject poverty.

      One of the biggest factors is ‘Corruption.’ It is the cancer eating into the vitals of the society. It has permeated into all facets of life, affecting the poor and voiceless. Today, the common man with no money or muscle power, cannot think of getting any thing done in the developing world, without having to pay bribe.

      Global institutions such as World Bank, IMF, and UN must enjoy legitimacy from their member countries and the international community. They must be responsive, with the interests of all members, especially the smaller and poorer, being taken into account. The governance of these institutions must be flexible, must respond to new challenges, national priorities and specific circumstances.

      A scathing report from the Independent Evaluation Office (IEO) of IMF highlights the lack of transparency and accountability in IMF. The IEO measured governance along four dimensions – effectiveness, efficiency, accountability and voice – and against three standards – the Fund’s own governing documents, other international organisations, and private & public-sector corporations. The report finds accountability and voice are the weakest features of the Fund’s governance and these weaknesses entail risks to the Fund’s legitimacy, which in turn has a bearing on its effectiveness.

      If this is the situation with global institutions, we can well imagine what would be the situation with national and regional institutions. No wonder they abound in corruption of all sorts and get away with it. Then, how do we get over this corruption mania? One sure way would be to plug all the leakages in the system. This cannot be done without active support of the governments and its citizens. A unique identification of every citizen is the primary requirement. With the advent of ICT tools, every citizen can be uniquely identified from birth to death using unique identification methods such as fingerprint, iris, hand vein geometry and DNA linked to their ID, name, photo, etc.

      A Multi Purpose Biometric Smart Card for every individual and organisation linked to a money account and a e-Tool to link every citizen and service provider/public authority including the vertical and horizontal hierarchy of governance can be used as a single window of transactions for G2C, G2G, B2B, B2C, etc. If the transactions are thrown open, then total transparency and accountability can prevail, as envisaged in the Right to Information Act.

      Healthy citizenry can be created by covering all aspects of citizens from birth to death such as health, hygiene, housing, education, employment, expenses, consumption, savings, social security, et al, based on genuine physical transactions and not ghost transactions. Thus corruption, money laundering, arms trade and terrorism can be eliminated and all round peace and prosperity can prevail as every one would feel good that no one can cheat any one and all have equitable opportunities to contribute and grow.

      4Ps Business and Marketing Magazine – A Plan Media Publication, New Delhi, India – Special Feature – COLUMN CITIZENRY – A prescription to end corruption – Unique identification of every citizen will help kill the corruption malaise in developing economies http://www.4psbusinessandmarketing.com/17072008/storyd.asp?sid=2112&page….

  2. The backsliding by the Bank is evident on environment, poverty, governance and especially corruption, as we saw on April 8 with the $3.75 billion South Africa ‘Eskom’ loan for the world’s 4th-largest coal fired plant, whose benefits (the world’s cheapest electricity) go to TNCs (BHP Billiton, Anglo, etc) and whose costs will mainly be borne by poor people. We are continuing to campaign against the loan and its implications, and are resurrecting the World Bank Bonds Boycott to punish the Bank. For more contact me at pbond@mail.ngo.za, or see http://ww.ukzn.ac.za/ccs

  3. Please note that my aforementioned paper has now been further developed to book length and published as a paperback: Helping People Help Themselves: From the World Bank to an Alternative Philosophy of Development Assistance. Foreword by Albert O. Hirschman. University of Michigan Press. 2006. In a field better known for emotional appeals than intellectual analysis, the book tries to bring out the reasons why genuine development assistance (like many other forms of assistance or help) is much too difficult, subtle, and limited for a behemoth like the World Bank to do well so the result is much “unhelpful help.” Further research and comment is on my website: http://www.ellerman.org and blog: http://www.blog.ellerman.org.

  4. The World Bank has long been lacking a truly and solely poverty eradication focused branch under its institutional umbrella.

    Just like the IFC has once brought focus on SMEs, or like the GEF brought focus on lending for biodiversity protection, the World Bank should have a branch focused on nothing but the eradication of the most extreme poverty in remaining “poverty pockets” around the world.

    Such a World Bank Program for the Eradication of Extreme Poverty should be created for a limited “one generation” timeframe, with its feet held to the fire for performance and actual delivery on the ground.

    I would welcome the constitution of a working group to discuss and detail this idea further, if anyone is interested.

    Maritta Koch-Weser mkochweser@earth3000.org

  5. Dear Friends,

    I have been in close contact with the UN Development Program (UNDP), in Romania. To put is straightely, UNDP Romania directed 90% of the funds to friends and absolutely bellow-standards papers. The UNDP Office Romania financed the Biodiversity Strategy by some 200,000 USD, the result being just a collection of copy-paste fragmetns and simpley idiotic statements, far outside any scientific ground.

    Then the same Office financed by some other 200,000 USD another “project” with no perspective what so ever – the “integrated REsource Management for the Rio Conventions”.

    They are 2 ladys in -charge of these programs and they offer the contracts based on their personal preferences, after careful simulations of “competition”.

    What I can see then is that the UNDP fails completly to adress any “mission” here in Romania, thus I wonder why we actually need this kind of “assistance”.

    I am saying that there is no discussion in that case about “efficiency” – it is just pure roberry and nothin more.

    The cause I am suspecting is the absolute lack of control to the spent funds and I am not advocating any “improvment” in this sense, I”d rather suggest to give up this “organisation” entirely.

    Feel free to write me for details…

    Florin

  6. Mr. Shaman dazzles with the illusion of “insider information”, while having only worked for a short time (in development terms) at the very periphery of World Bank operations. Those who strive professionally to measure impact in development will know how hard the task is and what an important contribution the Bank makes. A few years touring around the “alternatives”; NGOs, private sector, UN Organizations could give new meanings to “inefficiency”, “corruption” and “innovation”… until then, please dont throw the baby out with the potable water… and get your thrills by reading about how Private Bankers ripped off the world. Equity in the private sector would spell the end of all development institutions, an outcome we could all justly celebrate.

    p.s.1. how about a “.org” blogspot for this debate… and not a “.com”?

    p.s.2. Mr. Alexandru should direct his email to the clear channels established for institutional corruption and not try to gather more flies around his problem.

    1. Mr. Rheinhart, thank you for offering these thoughts. Your comments have valiidity in some respects but less so in others. Briefly, I would respond by saying that my blog postings offer a quick perspective based on my experiences at the Bank and subsequent research. A full read of my book, The World Bank Unveiled, offers a more holistic view of the institution where I note the many strengths of the Bank and not just its weaknesses. In short, I want the institution to succeed and my text and subsequent blog are intended as honest observations and constructive criticisms designed to elicit thoughts and dialogue on ways to improve it. I would encourage any reader to look at the book in its entirety and judge for themselves.

  7. @Josh
    I am simpley stated that it is impossible to improve efficiency of UNDP being institutionally corrupted, it works 100% corrupted, there is not about some cases.

    Discussion about improving WB is like discussing wether Cosa Nostra could be transformed in a Catholic Church. It is not only useless, it is just damaging the chances for development. This “Development institution” is nothing more than a large uncontrolled Corporation, that even escapes public control.

    It is not “my problem”, it is taxpayers problem. I would vote to dissolve this “organisation” for a better world. There is no need for any “alternative”.

  8. I can only say a few things as a person who had to deal with the Bank on few occasions and the lingering impressions are:

    The whole set up gives a clear and strong message of beurocratic institution right from the size of the building and the number of people working there. it was no wonder then to be told that the Fax sent to the World Bank takes more than two days to reach the person who has to deal with it

    People working there are busy spending more time on fixing their tour programs than to deal with the subject matter

    in case the people donot want to take a decision , they simply refer it to the legal department where it gets embroiled in delays easily

    In case any problem is referred to them , their convenient answer is “We are only a financing institution….” instead of being proactive

    Generally speaking the Transparency is less in case one is dealing with Developing countries and more so the LDCs

    Generally the projects cost more than they should thus the borrower pays more than he should

    My own impression is ADB is more flexible than WB and also more proactive

    M D K hattar

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s