Bretton Woods Committee | Wed, May 17, 2023
by Frank Vogl
Ajay Banga takes the helm of the World Bank at a singularly important time in determining the institution’s contributions to economic development.
This is a time of severe economic/international debt distress for many developing countries, with higher levels of absolute poverty than have been seen in many years; a time of mounting public concern about climate change; and a time when authoritarian governments control nations that account for more than one-half of the world’s population.
Never before have so many leading foreign aid experts, notably including Samantha Power,1 the current Administrator of the U.S. Agency for International Development, been so ready to acknowledge that the success of aid agencies critically depends on their skills in partnering with non-governmental organizations (NGOs).
At the international level, for example, Banga’s Bank needs organizations like the Bretton Woods Committee to publicly advocate for far more resources for loans and grants to enable the World Bank group to substantially scale-up its operations – as it must, for example, if it is to provide vital leadership in protecting the world’s environment.
Further, only with far deeper partnerships with such global NGOs as those at the forefront of confronting refugee, environmental, human rights, and corruption challenges, can the Bank build the partnerships and alliances that are crucial at this time. After all, for example, failures of governance including rampant corruption, enormous violence, environmental degradation, and failures of development assistance, have combined to produce a situation where we now have more than 100 million refugees in the world. This is a record. The outlook could be even worse.
At national levels, civil society organizations in many countries, including the poorest, have developed professional skills and deep local knowledge in areas of development, delivery of social services and anti-corruption that can provide vital qualitative inputs for World Bank project operations. Inputs both in terms of project design and project monitoring. While the Bank has notionally embraced the idea of working with in-country civil society, its consultations are for the most part superficial and unlike a number of leading bilateral aid agencies, the Bank has failed to directly provide significant funding to these organizations.
The World Bank needs to revive a commitment to partnering with NGOs that was evident in the distant past. For example, the Bretton Woods Committee was created in the early 1980s when then World Bank President A.W. Clausen called on the private sector to advocate for strong support by the U.S. Congress to fund the International Development Association (IDA) at a time when then President Reagan’s Director of the Officer of Management and Budget David Stockman announced more than a 50 percent cut in U.S. funding for IDA. Support from NGOs helped the Bank at that time to establish a special grant facility for sub-Saharan Africa that partially offset the sharp U.S. Administration reduction in IDA funding.
In 1995/’96, then World Bank President, James Wolfensohn, engaged in substantive discussions with Transparency International that led to the formulation, for the first time, of a World Bank anti-corruption strategy. This in turn influenced the development of anti-corruption mandates for major bilateral aid agencies and other multilateral institutions, including the International Monetary Fund.
And it was largely under Wolfensohn that the World Bank sought to engage on a regular basis with a rising number of civil society organizations across the globe – inviting representatives to meetings, promoting forums to publicize their views, and encouraging consultations between them and Bank staff.
While World Bank leaders since Wolfensohn have all spoken publicly in support of partnering with civil society, the reality is that there has been scant senior management support for Bank staff to work with civil society in Bank projects. When concrete proposals for projects have been made, then approvals can take far longer than the timeframes that are meaningful for most in-country civil society organizations. And Bank staff often seek full project control.
Ajay Banga’s success in his position will demand a far greater level of Bank-NGO partnership – if he fails to make this a priority, then he may find that the Bank will fall short in meeting the crucial goals economic, development and environmental goals that it has the potential to attain.
1 For Example, major speech by Samantha Power in December 2022
Frank Vogl is the former World Bank Director of Information and Public Affairs (1981-1990), is a co-founder of Transparency International and the Partnership for Transparency Fund. He is an Adjunct Professor at Georgetown University.