Blind spot: The continued failure of the World Bank and IMF to fully assess the impact of their advice on poor people
A new paper, on World Bank and IMF policy “advcie” to developing countries, jointly published by Oxfam International, CAFOD, Save the Children UK, Christian Aid, Eurodad, Bretton Woods Project, New Rules for Global Finance, WaterAid, TroCaire, Norwegian Church Aid, said that it seems impossible that the World Bank and International Monetary Fund (IMF) would give advice to developing countries without fully considering how it might affect the lives of poor people. Yet, despite it being a long-stated policy of both institutions to do so, and some recent progress on the part of the IMF, they are still failing to consistently ensure that there is a proper assessment of the likely consequences of different policy actions on the poorest people. Both institutions should urgently ensure that before they recommend a course of action, the impacts of a range of options on poor people have been thoroughly explored in a country-led process. The findings should also have been discussed by parliamentarians, NGOs, and other citizens’ groups. That way, those affected by a World Bank or IMF-advised reform, policy, or project will be able to influence its direction. This will improve the policy-making process, build country ownership, and make it more likely to succeed.
It is particularly important that this issue is discussed as the World Bank is negotiating new funds from donors. Donors should insist on these changes being implemented to ensure that their money is more likely to result in genuine, sustainable poverty reduction.