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The Monetary Policy and Trade Subcommittee held a hearing to examine results and accountability at the World Bank. Members of the Subcommittee heard testimony explaining the “pressure to lend” at the World Bank, which often rewards pushing money out the door, rather than learning from mistakes in order to strengthen positive outcomes.
“If the Bank is to be successful in its goal to eliminate poverty, then business as usual is not enough. The World Bank may have the best of intentions, but we must call on the Bank to deliver results, not simply look for new ways to push money out the door,” said Chairman Andy Barr (R-KY). “In addition, the Bank is involved in a number of countries whose economic prospects are key for U.S. security interests. If the Bank cannot design and execute projects effectively, then not only could the world be less well-off, it could also be less safe.”
Key Takeaways from the Hearing:
- The World Bank must put greater focus on development results, not on pushing money out the door.
- Supporting foreign governments that trample on economic freedom risks wasting taxpayer dollars. If the Bank wants to reduce poverty, it should empower citizens, not dictators.
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Topline Witness Quotes:
“The World Bank has serious problems with enforcing its safeguards and holding its borrowers accountable for following its rules. The bank has repeatedly been unwilling to admit errors, responded to negative consequences of its projects with public relations and spin rather than taking responsibility for them, and failed to listen seriously to the voices of the poorest people in the world, whose wellbeingis at the heart of its mission. These shortcomings have real consequences, as large sums of aid flow to regimes and to projects that violate the bank’s rules and principles.” -Mr. Sasha Chavkin, International Consortium of Investigative Journalists
“One often hears World Bank senior management say that, ‘the World Bank has zero tolerance for corruption.’ But what does that mean in terms of policy and outcomes? The World Bank’s Integrity Vice Presidency (INT) is the World Bank’s answer to corruption. They are the sole body tasked with investigation of fraud and corruption in World Bank projects. It is rarely, if ever, in the interest of a donor organization to advertise to their funders that money has been misspent. There is an inherent conflict of interest between the mandate of INT to fight corruption and operations’ goals of keeping projects funded and client states happy. INT is in the political cross hairs.” -Dr. Jean Ensminger, Edie and Lew Wasserman Professor of Social Science, California Institute of Technology
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