The World Bank needs reform: democracy, accountability, climate change, and more

We closed the poll on which issues at the Bank need the most reform. You can see it at the bottom of the page. Its worth noting that there was a fairly even spread of issues that people thought needed reform. But the top issues were: democracy and accountability at the Bank; the Bank’s involvement in climate finance; improvement of public health systems; duty to respect and protect human rights; and the development impact of extractive industries. Lets review some of these, with some conjecture on the candidate’s positions:

First democracy and accountability – the first half of which is not strictly in the power of the Bank President. That said, the President can use his bully pulpit to argue for and demand changes in the alignment of power among shareholders. For all his many faults, this is something Strauss-Kahn did during his tenure at the IMF. While Zoellick’s parting words tried to put the multilateral into the Bank, he did precious little during his term to up the democracy quotient. The second half of that reform demand – accountability – is another matter. The president could set down the law about making sure there is greater participation by affected communities in Bank projects, and could also strengthen the independent accountability mechanisms at the Bank. By a rough read, this is not something that seems to be in the experience of US-nominee Jim Yong Kim, while Ngozi Okonjo-Iweala as a Bank insider for decades is not seen as friendly to this agenda, while Jose Antonio Ocampo, as someone with a strong UN background, presumably takes inclusiveness more seriously.

The Bank’s involvement in climate finance has been robustly rejected by many developing countries and a campaign by civil society organisations, not least because of the Bank’s awful record on funding climate change-inducing power plants and other projects. Kim has zero experience in this area. Okonjo-Iweala, while at the Bank publicly advocated the Bank taking up climate finance as well as public-private partnerships for adaptation – anathema to many Bank critics. Ocampo wrote a whole chapter on climate change finance for the UN including arguing in favour of needs-based allocation and additionality to aid as well as against loans. That rings will with campaigners.

Health made a late surge up the list – possibly due to health advocates visiting the blog in the aftermath of the Kim nomination. However, the big question is will the new president push vertical fund type health care delivery, health systems strengthening, or further financialisation of health care. Kim clearly comes from the vertical fund type of system when he worked on HIV/AIDS for the WHO, but his work with Partners in Health seems to show an understanding of the great value of preventative care and health systems. Okonjo-Iweala, if we saddle her with the Bank’s record, clearly falls into the financialisation category – with increased support for private insurance. Nigeria has moved towards a national health insurance scheme since 1999, but still very few people are covered. Ocampo’s views are less well known here.

The World Bank currently fails to recognise that it has a duty to respect and protect human rights, generally categorising human rights as “political” rather than “economic” or “poverty” related. While some limited steps were made on the IFC safeguards to finally stop distorting the requirement for “free, prior and informed consent” for projects that affect indigenous people (the Bank used to only require ‘consultation’, not ‘consent’), there is still no appropriate acceptance and redress mechanisms. None of the candidates have a clear position on this that I know of. Again if we tar Okonjo-Iweala with the Bank policy, she would clearly be behind the curve.

Finally we come to the development impact of extractive industries, an area which one would hope that Okonjo-Iweala, hailing from an oil exporting state should have a strong interest in. Of course the Bank’s track record is not great – from the human right abuses associated with the Chad-Cam pipeline to the massive environmental damage and destruction of livelihoods from the Marlin gold mine, the Bank is an accomplice in many welfare-reducing rather than -increasing projects. We assume that again Kim has no knowledge of this area. Onkojo-Iweala has given a look in to the oil industry in Nigeria, but seemingly from the perspective in maximising revenues and stopping corruption associated with subsidy, but little about the environmental impact in the Niger delta. Ocampo’s 2009 book Uneven Development, seems to support the Extractive Industries Transparency Initiative and the Publish What you Pay campaign.

None of our poll results got zer0 votes – so there seems to be desire for all types of reform. Watch this space for me about where people think the World Bank should be headed in the future.

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