The World Bank The World Bank is the key institution through which rich nations channel resources to poorer ones. Established over fifty years ago in a radically different international environment, the World Bank has constantly re- invented itself in the intervening decades. What drives this evolution? This book considers the nature of change at the World Bank, exploring both the external impetus for change, and the impact of the Bank’s internal organization and culture. The author’s findings are supported by detailed case studies of three of the Bank’s most important new agendas: private sector development, participation, and governance. Michelle Miller-Adams finds that traditional international-relations based approaches, which focus on states and power, are inadequate for explaining institutional change at the World Bank. Attention must also be paid to the Bank’s internal processes, especially the technical and apolitical norms that form an intrinsic part of its identity. This identity, which dates from the Bank’s earliest days, continues to shape its response to new demands and affect its ability to meet the needs of a changing world. Michelle Miller-Adams is a writer and editor of publications in the field of international affairs, and teaches political science at Western Michigan University. She holds a PhD and Master of International Affairs from Columbia University. She has worked in New York as vice-president for programs at the Twentieth Century Fund and as vice-president of research at Salomon Brothers, where she wrote numerous reports about the World Bank. Routledge Studies in Development Economics 1 Economic Development in the Middle East Rodney Wilson 2 Monetary and Financial Policies in Developing Countries: Growth and stabilization Akhtar Hossain and Anis Chowdhury 3 New Directions in Development Economics: Growth, environmental concerns and government in the 1990s Edited by Mats Lundahl and Benno J.Ndulu 4 Financial Liberalization and Investment Kanhaya L.Gupta and Robert Lensink 5 Liberalization in the Developing World: Institutional and economic changes in Latin America, Africa and Asia Edited by Alex E.Fernández Jilberto and André Mommen 6 Financial Development and Economic Growth: Theory and experiences from developing countries Edited by Niels Hermes and Robert Lensink 7 The South African Economy: Macroeconomic prospects for the medium term Finn Tarp and Peter Brixen 8 Public Sector Pay and Adjustment: Lessons from five countries Edited by Christopher Colclough 9 Europe and Economic Reform in Africa: Structural adjustment and economic diplomacy Obed O.Mailafia 10 Post-apartheid Southern Africa: Economic challenges and policies for the future Edited by Lennart Petersson 11 Financial Integration and Development: Liberalization and reform in Sub-Saharan Africa Ernest Aryeetey and Machiko Nissanke 12 Regionalization and Globalization in the Modern World Economy: Perspectives on the Third World and transitional economies Edited by Alex F.Fernández Jilberto and André Mommen 13 The African Economy: Policy, institutions and the future Steve Kayizzi-Mugerwa 14 Recovery from Armed Conflict in Developing Countries Edited by Geoff Harris 15 Small Enterprises and Economic Development: The dynamics of micro and small enterprises Carl Liedholm and Donald C.Mead 16 The World Bank: New agendas in a changing world M ichelle Miller-Adams The World Bank New agendas in a changing world Michelle Miller-Adams London and New York First published 1999 by Routledge 11 New Fetter Lane, London EC4B 4EE Simultaneously published in the USA and Canada by Routledge 29 West 35th Street, New York, NY 10001 Routledge is an imprint of the Taylor & Francis Group This edition published in the Taylor & Francis e-Library, 2003. © 1999 Michelle Miller-Adams All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging in Publication Data Miller-Adams, Michelle, 1959– The World Bank: new agendas in a changing world/ Michelle Miller-Adams 192 pp. 156×234 cm. Includes bibliographical references and index 1. World Bank. I. Title. HG3881.5.W57M55 1999 332.1’532–dc21 96–42331 CIP ISBN 0-203-45514-2 Master e-book ISBN ISBN 0-203-76338-6 (Adobe eReader Format) ISBN 0-415-19353-2 (Print Edition) To Richard Adams, with love Contents List of figures ix List of tables x Preface xi Abbreviations xiii 1 Introduction 1 2 Understanding the World Bank: a theoretical overview 9 States and power: international-relations-based approaches 9 Norms and beliefs: organization-theory-based approaches 13 The World Bank’s organizational culture 21 Conclusion 32 3 Approaching business: the private sector development agenda 34 The origins of private sector development 37 Assessing the importance of private sector development 49 Conclusion 65 Timeline of private-sector-related developments 67 4 Approaching civil society: the participation agenda 69 The origins of participation 71 Assessing the importance of participation 82 Conclusion 96 Timeline of participation-related developments 98 5 Approaching politics: the governance agenda 100 The origins of governance 104 Assessing the importance of the governance agenda 114 Conclusion 131 Timeline of governance-related developments 132 vii viii Contents 6 Effecting change: the challenge of organizational transformation 134 New agendas, old rules 134 Patterns of change 139 Strategies for change 141 The prospects for organizational transformation 147 Notes 150 Bibliography 160 Index 170 Figures 2.1 The World Bank’s task environment 14 3.1 Growth of IFC 56 3.2 Private sector loans, IBRD 56 3.3 World Bank and IFC programs 57 3.4 IBRD lending 65 3.5 IDA operations 65 4.1 NGO-World Bank collaboration 85 4.2 NGO role in project design 85 5.1 Public sector management operations 118 5.2 Public sector management, regional trends 119 5.3 Public sector management, regional distribution 119 ix