What progress? A shadow review of World Bank conditionality

What progress? A shadow review of World Bank conditionality

Critique of World Bank conditionality policies

This report is highty critical of the conditions the World Bank attaches to its lending to developing countries. It provides a 'shadow review' of the World Bank's activities, in response to the Bank's optimistic 'Devleopment Policy Lending Retrospective', published earlier this year. The Actionaid review uses qualitative evidence to counter the larely quantitative evidence used by the World Bank, and to to assess how the principles are affecting the overall burden and impact of conditionality.

The findings are not encouraging. In particular:

  • bank staff continue to work with an extremely narrow definition of country ownership, which in Pakistan has led to a large dam-building programme being driven forward in the face of public opposition and evidence of past failures
  • too often, harmonisation means that donors link their aid to the World Bank’s Poverty Reduction Support Credit (PRSC) conditions, rather than to implementation of a country’s own plan
  • there is evidence from countries including Zambia, Mozambique and Benin that the Bank is still using its loans to leverage privatisation reforms that are not called for in governments’ own development strategies
  • the continuing secrecy of Bank negotiations with borrowing governments inhibits the development of genuine ‘ownership’

Some of the recommendations are:

  • the Bank should end its use of economic policy conditionality: it undermines democratic accountability systems which are essential for development, and often has no beneficial impacts on poverty
  • to allow countries to explore policy options, the Bank should support developing countries to strengthen their capacity in poverty and social impact analysis rather than taking the lead
  • while harmonisation is vital, the Bank should work with other donors to ensure that harmonisation takes place around genuinely country-owned strategies, rather than donor-led matrices
  • the Bank should help countries plan far enough in advance to allow parliaments and civil society sufficient time to scrutinise future lending
  • the Bank should seek to rebuild trust by introducing independent monitoring systems