The bank faces scrutiny by observers around the world and across the political spectrum who are trying to determine what role, if any, it should play.
One of the organizations to study just that was the Center for Strategic and International Studies. Its special task force was made up of representatives from big business, think tanks, development banks and non‐governmental organizations. In its just‐released report, the CSIS panel grappled with many of the problems — ranging from poor project performance and outdated missions to lack of accountability and openness — that have plagued the multilateral development banks.
The tone of the report is striking. The members express caution, rather than enthusiasm, about the ability of the development banks to accomplish many of their ambitious and noteworthy goals. The task force points out that lending will do little good, and will likely be counterproductive, if the overall policies of a country are inimical to growth. In general, economic progress requires a market‐oriented policy environment, according to the report.
The development banks themselves frequently make the same point, but, as the task force says, they often continue to lend to governments regardless of their economic policies. Other areas of general consensus include concern about the banks’ unnecessary secrecy and empty promises of reform.
Troublesome, however, is the recommendation for the continuation, or even expansion of the development banks’ support for private ventures and free‐market reforms in borrower countries.
Private capital flows now dwarf official aid flows to the developing world. The report acknowledges that those flows and market‐oriented development strategies suggest a declining role for the multilateral development banks. But it warns that only about a dozen developing countries receive the bulk of that private capital. That is precisely as it should be.