The World Bank and the Gods of Lending
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Uncovering the World Bank’s loan programs in the developing world in The World Bank and the Gods of Lending, author Steve Berkman finds nothing but mismanagement and hypocrisy: decades of assistance without any significant improvement in the lives of the poor; billions loaned for improving governance, health care and education with little to show for it; and donor funds given to dysfunctional government institutions or officials with a history of looting national treasuries. With sixteen years as a Bank staff member and consultant, Berkman presents compelling evidence of deceptive reporting and lack of due diligence as billions of dollars are wasted every year on corrupt and ill-conceived programs.
Using internal reports and memos, project documents and the Bank’s Annual Reports as reference, Berkman demonstrates management’s obsession with lending despite the high fiduciary risks involved. Taking the reader inside several project fraud investigations, he exposes the ease with which funds can be stolen from the Bank’s portfolio, and the degree to which these thefts are ignored. Painting a picture of an institution that is run by a bloated bureaucracy, The World Bank and the Gods of Lending proposes changes that will rouse the Bank from its bureaucratic complacency and restore its central mission of alleviating poverty.
was almost always impossible to achieve and was a frequent cause of staff frustration, especially for those of us who had to try and make it all work, while others, intent on promotions, moved on to generating more lending operations for the Bank. Staff resources for supervision missions would be allocated by management each fiscal year, and in contrast to the generous resources allocated for appraisals, we were always far short of what was needed to do the job properly. Supervision missions
anyone of a 102 A Very Special Account brilliant future for technical education in the country. A follow up project may help to correct this situation.15 Typical Bank logic! The project is not sustainable, and the government is not committed. By all means, we should have a followup project. Let’s give them some more money, and let’s open another special account. NOTES 1. Internal Auditing Department, “Report on an Audit of Bank Loans and IDA Credits,” September 29, 1978, p. 2, para. 5; p. 22,
private sector, it is considered a crime. There is an investigation, prosecution, punishment for the guilty, and attempts to recover that which was stolen. Yet when the theft is committed against a government, or more precisely, the general population, none of the above seems to apply. Why do we not discuss a government’s obligation to pursue the culprits or recover stolen funds? Why aren’t these things highlighted in Bank research to this day? While EDI and PREM were doing their thing, OPS was
has been a perception outside the institution that the Bank has yet to grasp the importance of the issue, exert intellectual leadership, and adjust its lending to new realities. Within the Bank, however, there is a concern to review existing approaches, building on them where necessary. Initiatives are already being taken to strengthen the control of corruption in Bank projects.7 How gently we approach the subject. We can’t say with certainty, but we “believe” we contribute positively to the
transportation project in Nigeria, it offered much less reward on the road to a promotion. But these concerns aside, it would be fair to say that this never seemed to detract from the commitment and dedication of my colleagues as we tried to keep “our” projects on track. And while dealing with government officials tended to be somewhat less frustrating than in other countries on the continent, it was just as difficult to achieve any substantive progress. Despite the smiles and friendly