The World Bank has, since the early 1970’s, been one of the most
influential institutions that has provided funding to African countries to help
them expand and develop. Founded by various economists in 1944, such as John
Maynard Keynes, the institution was founded with intentions to assist developing
countries by providing them with the capital necessary to invest in poverty
reduction and infrastructure improvement. The World Bank still follows its
founding function. If you look on their website under “What We Do” the
organization provides the following definition: “We provide a wide array of
financial products and technical assistance, and we help countries share and
apply innovative knowledge and solutions to the challenges they face” (World Bank Website).
However, the World Bank is often under scrutiny by many politicians
and academics, and justly so. It has built a reputation as serving significant
western political agendas by convincing African states to agree to certain
terms as a means of securing desirable funding. Normally, this takes the condition
of agreeing to privatize the water systems of a certain part of a country, as
much of the time “a ‘highly indebted poor country’
cannot borrow capital from the World Bank or IMF without a domestic water
privatization policy as a pre-condition” (Goldman,
2007).
Many financiers and economists who follow Neoliberal ways of
thinking argue that allowing market mechanisms to moderate water distributions
will improve efficiencies, just as they have in the Global North. Some
researchers have faith in the agreements the World Bank creates with African countries,
such as the New Partnership for African Development (“NEPAD”) it worked out
with leading African governments that “is a promise by African leaders to
deliver good governance, peace and security in return for increased foreign
investment” (Owusu,
2003).
Still, many express concern over the growing influence it holds
over politics in certain African countries. Harrison,
2005 asserts that “since the early 1980s, the Bank has pursued a range of
strategies to restructure African states in ways which reduced state capacity and
the scope for public action.” This move to “roll back” raises questions
regarding why the World Bank would be so concerned regarding the current state
of political affairs of a country it grants funding to, and why the political
structure it advocates for is one that is less centralized with weaker government.
The World Bank often claims that it advocates for open public
debate regarding the needs of a community, and stresses the importance of
public policy participation. However, Beckman,
1991 declares that the World Bank does not truly dedicate itself to finding
true consensus in local government, but rather employs tactics such as “fictitious
consensus mongering, dodging real issues of division, reducing major political
divisions to technical ones, and ignoring or delegitimising opposition to its
politics” in order to undermine opinions against them and to further their
agenda. It seems to work, too, as many people are willing to believe the World
Bank if it claims it knows what is best for a community or that opposition to
them is based on ignorance.
Notably, it appears that the primary factor that decides
allocation of World Bank funds may be the political agendas of western
governments in a certain country or area. Certain governments have significant
influence on the board of the World Bank, especially the United States, and
there also remains significant interest in the organization determined by large
multinational water companies. Therefore, many studies following the flow of
funds have recognized that “aid allocations are substantially influenced by
donors’ domestic political considerations, including commercial advantage and
foreign policy objectives such as migration and terrorism” (Harrigan,
et al., 2006). If this is true, it would seem the World Bank serves more as
a means of reforming African countries into a structure that can be made
profitable for Western countries.
The World Bank also has a track record of influencing global
multilateral treaties and conferences, and seeks to be largely influential in the
school of thought pertaining to international politics and development of
countries in the Global South. Goldman,
2007 notes how the 2002 World Summit on Sustainable Development “read
much like a World Bank policy paper, and a wish-list for the world’s largest
service sector firms: Water privatization is the best policy to tackle the
global South’s poverty and water-delivery problems.” It seems, then, the
World Bank has been extremely successful in promoting its agenda to politicians
by garnering support in its line of neoliberal developmental thought.
There is no doubt that there are many in this
academic line of thought who agree that privatization is the best system for
Africa to develop, and there is plenty of research to defend their arguments. However,
it raises questions of intent when it seems that privatization may also be used
to create a mechanism by which western countries can exploit and profit from
business within certain African countries as they develop.
This is a very interesting blog.
ReplyDeleteYou mentioned that the allocation of World Bank funds can be influenced by the desire of multinational water companies to operate in that country and increase their profits. Do you know of any examples of when this has occurred within Africa?
Hey Dan! Most academic literature avoids pointing fingers at companies when they've done a fantastic job hiding their political interests and how they influence groups like the World Bank. Nevertheless, links can be found. For instance, Suez used to have a large influence on privatised water management in Ghana, and was certainly receptive when World Bank funds were provided to assist with water infrastructure in cities like Accra. It would be difficult to track donations that Suez may or may not have made to the World Bank, but I'm sure links can be found. The World Bank, when it helps cities move towards systems of increased private sector participation, often work in collaboration with certain firms, like Thames Water, that they would prefer to manage the infrastructure investments due to its size and generally successful track record.
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