INTERNATIONAL POLITICAL ECONOMY SERIES General Editor: Timothy M. Shaw, Professor of Political Science and Inter- national Development Studies, and Director of the Centre for Foreign Policy Studies, Dalhousie University, Nova Scotia, Canada Recent lilies include: Pradeep Agrawal, Subir V. Gokarn, Veena Mishra, Kirit S. Parikh and Kunal Sen ECONOMIC RESTRUCTURING IN EAST ASIA AND INDIA: Perspectives on Policy Reform Solon L. Barraclough and Krishna B. Ghimire FORESTS AND LIVELIHOODS: The Social Dynamics of Deforestation in Developing Countries Jerker Carlsson, Gunnar Kohlin and Anders Ekbom THE POLITICAL ECONOMY OF EVALUATION: International Aid Agenicies and the Effectiveness of Aid Steve Chan (editor) FOREIGN DIRECT INVESTMENT IN A CHANGING GLOBAL POLITICAL ECONOMY Edward A. Conior (editor) THE GLOBAL POLITICAL ECONOMY OF COMMUNICATION Paul Cook and Frederick Nixson (editors) THE MOVE TO THE MARKET? Trade and Industry Policy Reform in Transitional Economics O. P. Dwivcdi DEVELOPMENT ADMINISTRATION: From Underdevelopment to Sustainable Development John Healey and William Tordoff (editors) VOTES AND BUDGETS: Comparative Studies in Accountable Governance in the South Noelcen Heyzer, James V. Riker and Antonio B. Quizon (editors) GOVERNMENT-NGO RELATIONS IN ASIA: Prospects and Challenges for People-Centered Development George Kent CHILDREN IN THE INTERNATIONAL POLITICAL ECONOMY Gary McMahon (editor) LESSONS IN ECONOMIC POLICY FOR EASTERN EUROPE FROM LATIN AMERICA David B. Moore and Gerald J. Schmitz (editors) DEBATING DEVELOPMENT DISCOURSE: Institutional and Popular Perspectives Juan Antonio Morales and Gary McMahon (editors) ECONOMIC POLICY AND THE TRANSITION TO DEMOCRACY: The Latin American Experience Archibald R. M. Ritter and John M. Kirk (editors) CUBA IN THE INTERNATIONAL SYSTEM: Normalization and Integration Ann Seidman and Robert B. Seidman STATE AND LAW IN THE DEVELOPMENT PROCESS: Problem-Solving and Institutional Change in the Third World Tor SkSlnes THE POLITICS OF ECONOMIC REFORM IN ZIMBABWE: Continuity and Change in Development John Sorenson (editor) DISASTER AND DEVELOPMENT IN THE HORN OF AFRICA Howard Stein (editor) ASIAN INDUSTRIALIZATION AND AFRICA: Studies in Policy Alternatives to Structural Adjustment Deborah Stienstra WOMEN'S MOVEMENTS AND INTERNATIONAL ORGANIZATIONS Larry A. Swatuk and Timothy M. Shaw (editors) THE SOUTH AT THE END OF THE TWENTIETH CENTURY: Rethinking the Political Economy of Foreign Policy in Africa, Asia, the Caribbean and Latin America Sandra Whitworth FEMINISM AND INTERNATIONAL RELATIONS The World Bank and Non-Governmental Organizations The Limits of Apolitical Development Paul J. Nelson Associate Director for Development Policy Church World Service and Lutheran World Relief Washington, DC First published in Great Britain 1995 by MACMILLAN PRESS LTD Houndrnills, Basingstoke, Hampshire RG2I 6XS and London Companies and representatives throughout the world A catalogue record for this book is available from the British Library. ISBN 0-333-64577-4 First published in the United States of America 1995 by ST. MARTIN'S PRESS, INC., Scholarly and Reference Division, 175 Fifth Avenue, New York, N.Y. 10010 ISBN 0-312-12620-4 Library of Congress Cataloging-in-Publication Data Nelson, Paul J, 1956- The World Bank and nongovernmental organizations: the limits of apolitical development / Paul J. Nelson. p. cm. Includes bibliographical references and index. ISBN 0-312-12620-4 I. World Bank. 2. Non-govemmcnlal organizations. I. Title. II. Series. HG3881.5.W57N45 1995 332.1'532—dc20 95-7825 CIP © Paul J. Nelson 1995 All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No paragraph of this publication may be reproduced, copied or transmitted save with written peniiission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, 90 Tottenham Court Road, London WIP 9HE. Any person who does any unauthorised act in relation to this publication may be liable to criminal prosecution and civil claims for damages. 10 9 8 7 6 5 04 03 02 01 Printed and bound in Great Britain by Antony Rowe Ltd, Chippenham, Wiltshire Contents List of Tables and Figures vi Preface vii Acknowledgements ix Acronyms and Abbreviations xi 1 Introduction and Overview I 2 The World Bank Takes Center Stage 13 3 'Accountable to Whom?' And Other Issues for NGOs 36 4 World Bank-NGO Project Cooperation: Less than Meets the Eye? 67 5 Moving Money: Organizational Aspects of a Development Model 87 6 The World Bank and Apolitical Development 112 7 Organizational Culture and Participation in Development 142 8 Conclusions 176 Appendix 1 Key to Interviews Cited in Text 198 Appendix 2 Methodological Note 199 Notes 200 Bibliography 202 Index 221 List of Tables and Figures Tables 2.1 Top Five Voting Powers, IBRD, 1945, 1971 and 1993 14 2.2 World Bank Lending by Sector, 1961-65, 1975-79, and 1989-93 16 4.1 NGO Participation in World Bank-Financed Projects 1973-90, by Type of Involvement 72 4.2 Breakdown of NGO Roles in Project Design, for World Bank-Financed Projects Reported to Involve NGO Design, 1989-90 and 1991-92 78 4.3 Major Involvement in World Bank-Financed Projects, Community-Based Organizations Alone and Community-Based Organizations and Intermediary NGOs Together 80 4.4 NGO Involvement in Major Roles in World Bank-Financed Projects, by Involvement of International NGOs, National NGOs, and Both 82 4.5 Professional and Interest-Based NGOs, and Major Roles in World Bank-Financed Projects 83 4.6 NGO Involvement in World Bank-Financed Projects, by Region and Year of Approval, 1973-90 83 4.7 World Bank-Financed Projects with NGO Involvement, 1973-90, by Region and Major and Minor Roles 84 Figures 4.1 World Bank-Financed Projects with NGO Involvement, by Year of Approval 75 Preface The fiftieth anniversary year of the Bretton Woods organizations has been a turbulent one for the World Bank. 1995 has already been marked by a political shift in the Congress of its largest financial contributor, a major financial crisis in Mexico, the resignation of the late Lewis Preston and the nomination and appointment of James D. Wolfensohn to become its new President in June of 1995. It is difficult to predict the significance of any of these events and changes for the Bank. Internal and external reformers, including NGOs, have pressed for reforms in environmental policy, changes in policy and practice with respect to structural adjustment and popular partici- pation, freer access to information and channels for complaints about Bank-financed projects. Reforming efforts found some support at the top during Preston's presidency. A new, somewhat less secretive in- formation disclosure policy was enacted and an independent inspec- tion panel created to hear complaints. Preston emphasized poverty reduction and the environment in speeches and policy documents through- out his tenure. The incoming President has announced his intention to reshape the Bank. Wolfensohn's long-time interest in environmental and social development issues has raised hopes and expectations among many observers. But he takes over a large and conservative bureaucracy whose entrenched interests, myths and organizational dynamics have resisted and reshaped changes promulgated by previous leaders. How the new President's agenda will take shape, and how it will intersect and interact with NGO and social movements' agendas and with the changing politics of multilateral cooperation, remain to be seen. The research on Bank-NGO relations reported here, together with a review of policy changes in the 1970s and 1980s, points to some of the organizational features that have resisted change. These same fea- tures - including a relatively rigid project cycles, the protective organ- izational myth of apolitical development, and a hierarchical and insular information management system - should be among the targets for determined leadership within the Bank. They also suggest indicators by which reformers and observers can assess the response. NGOs and social movements that have targeted the Bank appear prepared to continue pressing for changes in policy and practice at the VII viii Preface Bank. The present political turn in Washington threatens to reduce drastically US participation in most multilateral and international coopera- tion, and has slowed the momentum of critique and reform momentarily. But interaction between the Bank and nongovernmental bodies, both cooperative and conflictive, continues to grow. And as networks of NGOs seek influence over the Bank, NGOs themselves are inevitably reshaped by their relations with World Bank programs and practice. PAUL J. NELSON Acknowledgements The research and writing of this book has spanned seven years, begin- ning as a Ph.D dissertation and ending as a focus of four years of activist research in Washington, DC. I hope that I have recognized specific intellectual debts clearly along the way, but there are a few people to whom I wish to give particular thanks. At the University of Wisconsin-Madison, Russ Middleton, Bill Thiesenhusen, David Stark, David Trubek and Joanne Csete offered instruction and encouragement. Doug Hellinger and his colleagues at the Development GAP were generous with advice and office hospital- ity during research in Washington, as was Bill Rau. The Mennonite Central Committee program in the Philippines gave much-needed hos- pitality and guidance during a visit there. Many NGO colleagues have made the work enjoyable and reward- ing. Marcos Arruda, Steve Commins, Nancy Alexander, Marijke Torts, Chad Dobson, Rajesh Tandon, Paul Spray, Lisa McGowan, Ross Hammond, Veena Siddharth, Jo Marie Griesgraber and Alex Rondos have inspired through their energy and selfless work, and reminded by example that even serious work should be fun. Church World Service and Lutheran World Relief, and my colleagues in their Office on Development Policy, have supported continued en- gagement with the World Bank, and this writing owes much to my experience as a part of that advocacy effort. The research and writing, however, have been done in my individual capacity, and the book and the views expressed are neither a project of nor attributable to any agency. James Rikcr and Kathryn Sikkink offered valuable advice in a research working group, and I have benefitted from conversations with Gerald Schmitz, David Williams and David Gillies. The dissertation research was funded by the John D. And Catherine T. MacArthur Foundation, which has also supported continuing conversation among researchers on international conflict and cooperation. Thanks to Series Editor Tim Shaw for probing comments on the manuscript, and for his commit- ment to exchange among participants in and scholars of international affairs, across boundaries of the university, government and NGO. Many staff and consultants at the World Bank have helped clarify issues, pointed the way to documents or individual sources, and given IX