Development Disrupted - CH - I - Constructing - Development

1
Constructing Development
It is difficult to imagine a world without development, which seems to have

always been one of the fundamental organizing principles by which we define
certain nations and peoples. Yet the concept is essentially a post-World War II
phenomenon.1 In 1949, US President Harry Truman proposed a “fair deal”
aimed at improving the lives of people inhabiting what came to be known as
the undeveloped areas of the world. In his now famous IV Point Program, he
declared:
More than half the people of the world are living in conditions approaching
misery. Their food is inadequate, they are victims of disease. Their economic
life is primitive and stagnant. Their poverty is a handicap and a threat both to
them and to more prosperous areas.2,3
Truman also supposed that the international community, through newly

established international institutions, would lead this endeavor.
the institutional edifice

In the aftermath of World War II, the United States was determined to create
a new world order based on international law and cooperation. In 1944, forty-
four former allied powers met in Bretton Woods, New Hampshire to create
international financial machinery to oversee the monetary and financial
aspects of that order, including the International Monetary Fund (IMF) and
the World Bank (WB).4 In some respects, these institutions resemble each
other; both have similar governing structures, weighted voting systems based
on member contributions, and an emphasis on political neutrality. It is
somewhat surprising, given their current undertakings, that the international
community created both international financial institutions (IFIs) to serve the
needs of nations in the industrialized Global North. The WB was to assist in
https://doi.org/10.1017/9781108539876.003 Published online by Cambridge University Press

6 Part I
rebuilding a devastated post-war Europe, while the IMF would monitor and
regulate the international monetary system.
Yet even if Global South development was not initially in their portfolios,
both entities have had an extraordinary sway that evolved over time; IFI dogma
eventually enveloped an ever-widening array of governmental functions.5
Eventually, IFIs influenced, and sometimes all but completely controlled
the policy-making processes of many poor countries.6 Their evolution into
institutions whose primary focus is the Global South was partly due to events
in the West, but also tells us much about the evolving development paradigm
where both institutions are key players.
The World Bank

The original mission of the World Bank (the Bank) was to finance re-building
war-torn Europe in the aftermath of World War II.7 Three years after the
Bank’s creation, however, the United States launched the Marshall Plan to
fund European restoration and, with its role in Europe eclipsed, the Bank
turned to development.8 Initially, the Bank performed the traditional role of
a private commercial bank by acting as an intermediary between prospective
borrowers and investors, the difference being that here depositors and borrow-
ers were nation states. Under its Articles of Agreement, the Bank was to base
loans upon “considerations of economy and efficiency” and was expressly
prohibited from considering political or other non-economic factors.9, 10
Unfortunately, a politically neutral World Bank was not to be. Instead, the
World Bank became a weapon in the Cold War between the United States and
the Soviet Union, which in the latter part of the twentieth century epitomized
the international struggle between capitalism and communism.11
The Bank’s evolution into an IFI that touched on almost all aspects of the
economic, social, and political lives of its borrowers, largely reflects develop-
ment’s evolution over the last seventy years and thus it unfolded in stages. The
Inter-American Development Bank (IDA), an arm of the Bank, was founded
in 1961 and began the practice of linking credit awards to satisfying conditions.
Lending had previously been project-based, relying on traditional financial
criteria; IDA loans, however, invested in “human capital” and poverty reduc-
tion programs.12 The IDA model was the template for multilateral institutions
insisting on domestic policy changes, while individual states could avoid
accusations of intervening in the domestic internal affairs of other states,
a serious charge during this era. Insistence on fulfilling conditions to obtain
credit ultimately opened the door to broader interventions in the political and
social affairs of borrowing nations.13 As development theories and practices

Constructing Development 7
materialized and subsequently failed, the Bank expanded the development

paradigm to comprise an ever-widening array of subjects. Its role in devising
and implementing both the practical and theoretical elements of develop-
ment expanded, as the Bank’s role in the affairs of Global South states became
broader and deeper.
The International Monetary Fund

Originally, the International Monetary Fund (IMF) was created to stabilize
and monitor the international monetary system, with the ultimate goal of
promoting international trade.14 The IMF was to supervise international
exchange rates and, when needed, make short-term loans to member states
to meet balance of payment difficulties.15 Many factors contributed to trans-
forming the IMF into a major lender to Global South countries. Among the
most important, however, was the US decision to “float” the US dollar in
1971,16 which caused such significant changes in the international monetary
system that it eventually reduced the IMF to monitoring exchange rates rather
than setting them.17 Yet, until the oil crisis of the 1970s, the IMF still focused
most of its attention on industrialized nations. High oil prices, however, led to
“Petro dollars flooding newly launched Euro-Markets.”18 Industrialized states
now had an alternative source of funds that soon usurped much of the IMF’s
role as a lender to creditworthy industrialized states. Once Global North states
could avoid IMF conditions by obtaining loans elsewhere, the IMF began
making loans almost exclusively to Global South nations.19 Since the IMF’s
Articles of Agreement were amended in 1979, the IMF has shifted most of its
lending to Global South countries, most of whom had few other options. The
IMF and World Bank effectively consolidated their policies toward the Global
South as the debt crisis of the 1980s deepened.20 The IMF began recognizing
“appropriate economic growth” as a legitimate objective, which meant high
quality growth rather than fleeting, flashy growth fueled by inflation and
excessive borrowing, or growth at the expense of the poor or the
environment.21 This model was also compatible with the World Bank’s theory
of economic development.22
Evaluating IFI Intervention in the Global South

Wide-ranging interventions by IFIs continued to expand.23 Liberal critics
generally accepted the goals and objectives of IFIs, but believed faulty imple-
mentation was the problem and that Western-dominated and unrepresenta-
tive IFIs were “out of touch” with the populations they engaged.24 More

8 Part I
radical detractors viewed IFIs as Global North instruments to exploit the

Global South, while others rejected both critiques.25 Professor Gathii
establishes that mandatory structural adjustment programs took economic
decision-making away from Global South governments and lodged it in
a hierarchical international order.26 Detractors also questioned how much
IFI or national programs actually benefited, and were rooted, in benefi-
ciary countries. For instance, only 20 percent of the funds the United
States donates to Sub-Saharan Africa ever leaves the United States. The
other 80 percent is spent on American commodities, expertise, and sub-
contractors. In 1989, the Bank employed 80,000 African specialists, but
only 1 percent of the specialists were actually from Africa.27
Notwithstanding this wide imbalance, what is certain is the essential,
decisive, and ever-expanding role of these institutions in the “cycles of
convention wisdom” that formed the ensuing narrative of development.
cycles of conventional wisdom
The “Golden Age” of Development: 1950–1970

The twenty-year period between 1950 and 1970 has been described as the
“golden age” of development.28 The development project was in its infancy,
but the “expert” consensus was that the key problem facing Global South
countries was unsatisfactory income, which could be acquired through eco-
nomic growth; early development theory trusted “state-led development to
achieve this objective.”29 The prevailing orthodoxy postulated that national
economic management would maximize economic development and the
state should deploy macroeconomic policy tools to orchestrate this growth.30
Accordingly, IFIs directed national governments to adopt policies to stimulate
growth.31 The standard approach involved highly abstract plans, economic
model building, and parastatal agencies.32 Among the most important elem-
ents was capital investment to build infrastructure, industrialize, and generally
modernize.33 Accordingly, the World Bank extended project-based loans to
build dams, highways, and other infrastructure projects.34
The so-called “golden age of development” partly coincided with the
beginning of what would be a series of development resolutions that began
at the request of US President John F. Kennedy.35 Successive resolutions every
ten years – the last in 2018 – expressed broad hopes for developing the
undeveloped areas of the world.36 But that there are still UN development
resolutions sixty years later makes evident that economic development is
complicated, and certainly more complex than initially anticipated.

Development specialists began to conclude that international institutions

needed more coordination to execute what was becoming an increasingly
intricate project.37 As the 1960s continued, the focus broadened to embrace
agrarian reform, additional planning, effective administration, the reduction
of social inequalities, and fashioning the modern state.38 Pursuant to World
Bank advice, and with the Bank’s backing, Global South governments began
to launch social programs to address poverty more directly, such as better
housing, education, health care, energy, and transportation.39 The Bank also
funded projects that addressed population control, nutrition, and urban
development,40 which at the time was a significant change in Bank policy.
The World Bank was evolving into an institution that funded social projects
involving non-economic policy choices, rather than simply a bank lending
funds for profit-oriented projects. Hence, development theory began its
journey toward the more modern concept of “comprehensive
development.”41
The Second Decade: Incorporating Social and Economic Elements

By the early 1970s, the World Bank’s resources and policies were focused
exclusively on the Global South as the “second era of development”
began.42 In 1970, the United Nations General Assembly declared the begin-
ning of a Second Development Decade (1971–1981) that called for distributing
income and wealth more equitably, enhancing primary education, preventing
and treating disease, and improving nutrition and housing. It also promoted
adjusting trade policies and the Global North’s support for the development
endeavors of Global South countries.
Development experts began to integrate social considerations into eco-
nomic goals, conceding that existing development strategies would not elim-
inate hunger and poverty.43 “Basic needs” became the new maxim within
development circles, although many development policies were actually
more likely to worsen absolute poverty for large segments of the population.
Rather than focusing on the infrastructure and mega-projects that previously
dominated development strategies and funding, the “basic needs” approach
proposed dealing with poverty by focusing directly on food, clothing, shelter,
education, and employment.44 If development efforts could meet basic needs,
perhaps societies would be less susceptible to “Communist subversion,” an
important consideration during the Cold War. Meeting “basic needs” was also
popular because it was universal, yet easily tailored to be country specific.45 It
remained in favor until policies centered on the poor were abandoned in favor
of structural adjustment lending.46

10 Part I
Policy studies that examined procedures, values, and social consequences

were prominent during this phase.47 Development specialists and IFIs
increasingly challenged the assumption that policy-making was exclusively
a state activity, with Global South governments acting on behalf of their
populations.48 As IFIs explored mechanisms to deliver aid that would meet
basic needs, Western non-governmental organizations (NGOs) began to
take part, although their role in the development paradigm waxed and
waned over time.49
“Grassroots development” and “empowerment” became mottos, as “bottom
up” theories such as endogenous development, sustainable development, and
other themes surfaced and eventually replaced “top-down” theories.50
Endogenous development suggested that the distinctiveness of individual
cultures and societies should be at the center of determining development
goals. Specialists generally accepted this approach for a time, which was at
odds with the universalistic presumptions that permeated development theory
and practice.51 “Micro-development” theorists postulated that the individual
should be the focus, rather than expenditures on infrastructure and govern-
ments. Empirically, micro-development assumes that poverty results from
a lack of access to resources that are “essential to the satisfaction of basic
human needs,” and that this lack of access is a “product of a dearth of power in
social relations.”52 Accordingly, people had to be empowered to confront and
address their poverty and they would then “organize themselves and overcome
the obstacles to their social, cultural and economic well-being,” while foreign
organizations would be relegated to a supportive role.
The 1972 United Nations Conference on the Human Environment, more
popularly known as the Stockholm Conference on the Environment, identi-
fied and crystallized the idea of sustainable development, which began with
the publication of Our Common Future and has had staying power in the
development lexicon.53 Development theorists and professionals character-
ized sustainable development as economic growth with a social dimension
that takes account of environmental concerns.54 The emphases in both micro-
development and sustainable development were on education and literacy,
health services, alleviating poverty, protecting the environment, community
cooperation and participation, and social and cultural cohesiveness.
Economic growth alone was no longer enough. Some outcomes, such as
improved communication, leadership and management skills, emerging civil
liberties, or an improved ability to leverage services from the state might be
intangible. However, tangible results might include increases in agricultural
production or manufactured goods, rising family incomes, or improved road
or water systems.55 As the 1970s progressed, “major problems, including the

environment, over-population, food scarcity, the role of women, habitat

destruction, basic needs, and unemployment were brought to the fore, and
each had an independent career that commanded both public and institu-
tional regard.”56
One common theoretical thread, however, was that the nature of problems
and the prescriptions to address them, commonly originated in the West – and
more specifically in the international institutions now, defined, designed, and
controlled development in theory and practice. Prominent policy prescrip-
tions in Western Global North countries, and especially in the United States,
usually presaged development strategies that were rarely based on the concrete
needs of Global South communities. For example, “Basic Needs” followed on
the heels of the American War on Poverty, which may have suggested the
model.57 We cannot separate the new role for women in development from
the budding feminist movement in the United States and other Western
nations. Environmental concerns surfaced, as the environment became an
issue in the United States and Europe.58 While this pedigree does not neces-
sarily make these initiatives invalid, it does pose the question of the extent to
which development policies are rooted in the specific needs and requirements
of Global South nations. It also highlights the extent to which IFIs and
development specialists designed and imposed policies separate and apart
from the communities they purported to serve.59
Then again, we cannot entirely ignore or discount the complex responses of
Global South nations and peoples to development interventions and there is
evidence that IFIs and development experts did sometimes take this into
consideration. For example, meeting “basic needs” may have been based on
the US War on Poverty, but it may also have been prompted by Cold War
concerns that poor populations might be susceptible to “Communist
subversion.”60 While this objective also had little to do with the needs and
desires of the peoples of the Global South, the anticipated responses to policy
failures by these peoples and their governments did figure into the equation.
Micro-development and participation were partly an answer to policy failures
but may also have been responses to changing perceptions of development’s
targets.61
Furthermore, as optimism regarding rapid economic growth faded, some
governments nationalized mining and other resource extraction companies in
an effort to broaden state control over those resources.62 The response was
“financial strangulation, as private investors fled and IFIs and foreign banks
denied them loans.” The resulting economic discord often led to military
coups or other military intrusions into the political process. This course of
events repeatedly unfolded, and more radical intellectuals began to stress the

12 Part I
consequences of imperialism. As Global North nations and IFIs used political,

military, and economic dominance to control Global South states, a school of
thought known as “dependency theory” emerged that proffered a radical
analysis of mainstream economics.63 It claimed that wealth migrated from
poor periphery countries to core wealthy states, thereby enriching the affluent
at the expense of the impoverished.
Meanwhile, the Cold War between the United States and the USSR raged,
becoming a fundamental dynamic in global politics and one of the primary
considerations in US policy toward Global South countries. This mindset
seeped into development discourse and practice, where it meant funding allies
engaged in the war against communism and isolating those nations that were
considered enemies. Without doubt, the relationship between development
experts and the foci of development was and remains multifaceted.
Nonetheless, it is clear that the preponderance of authority and control rested
with developers, and this deepened in the 1980s as Global South nations faced
economic crises and more wide-ranging IFI interventions.
Developments’ “Lost Decade” (1980–1990)

The 1980s are often termed development’s “lost decade,” due to a combination
of factors that included the Global South debt crisis, which, at least in part, led
to the debacle of structural adjustment.64 Of course, the decade did not begin
as such, at least not in rhetoric and theory. On December 5, 1980, the UN
General Assembly approved Resolution 35/56, declaring a Third
Development Decade that sought, inter alia, to expedite economic and social
development, reduce disparities between Global North and Global South
countries, and to eradicate poverty and dependency promptly. It was also
important that the public fully participated in development methods and
that those practices equitably distributed benefits to women.65 These appeals
were familiar, but were now made against a shifting backdrop, as changes in
the world economy meant changes in economic dogma.
The early and mid-1970s oil crisis had an outsized effect on the Global
South and was at the root of the 1980s debt crisis. Spiking oil prices impover-
ished oil-importing Global South countries and simultaneously flooded inter-
national financial markets with oil profits that were then available for
investment.66 The Organization of Petroleum Exporting Countries (OPEC)
became “a major U.S. creditor” and, in turn, Western multinational banks
loaned the funds to impoverished, and at times politically unstable, Global
South countries.”67 IFIs encouraged Global South nations to borrow to meet
their rising energy costs and the abundance of petrodollars drove interest rates

down.68 When interest rates rose dramatically in the 1980s, however, these
debts became much more costly. This eventually meant rising deficits that
countries were unable to repay, and most low income countries had to borrow
to service these debts.69 Yet by the 1980s, the prevailing economic dogma was
free market monetarism and loans came with the heavy cost of
conditionality.70 Along with structural adjustment and the Washington
Consensus, conditionality became critical aspects of IMF and World Bank
development policies.71 Thus, the global recession in the 1970s and the oil
crisis of the 1980s made IFIs more influential than ever and many poor nations
were in dire need of financial assistance that now came at a steep price.
The global recession of the 1970s “destroyed the post-war Keynesian con-
sensus, paving the way for profound changes in western economic thought,”
and a new age of American-led globalization.72 When OPEC dramatically cut
oil supplies and blocked oil shipments to Western nations, oil prices quadru-
pled and a global recession ensued.73 Unemployment and inflation rose
simultaneously and Keynesian economic models had few explanations or
answers for this phenomenon.74 Eventually, a new paradigm emerged that
took the “heavy hand of government” out of the equation and replaced it with
“supply and demand as the driving force.”75 As free market fundamentalism
took hold in the United States, it soon came to dominate the agendas of the
World Bank and IMF. Accordingly, IFI ideology took an abrupt turn in 1980;
Western free-market democracy, and “[f]ree markets and democratic plural-
ism were deemed the optimal means to organize society.”76
IFIs required debtors to implement structural adjustment policies to
address ballooning deficits.77 Adjustment lending consisted of six core object-
ives: raising saving rates; securing financial stability; liberalizing and opening
economies to foreign trade; reducing state intervention and making markets
more efficient; re-orienting government spending and improving revenue
collection; and mobilizing external resources.78 These policy prescriptions
transformed the IMF from an institution primarily concerned with stabilizing
global exchange rates into an organization deeply involved in the social and
political policies of poor Global South countries.79
Conditions are always part of IMF lending, but were limited to
macroeconomic variables such as debt, the money supply, and inflation
rates.80 Moreover, although the IMF sought specifically prescribed
macroeconomic objectives, it had not been concerned with how their
Members reached those goals. Economists and other experts now
thought that standard short-term lending requirements were inadequate
to address the development problems facing Global South nations.
Accordingly, the Fund began to rely on longer-term financing

14 Part I
arrangements and broadened the traditional scope of its review to evalu-

ate domestic issues such as labor, health care, and agriculture.81 IMF
functions shifted to managing the economies of developing, nations and
eventually former East European countries in transition. Moreover,
stabilization programs sponsored and approved by the IMF were an
international seal of approval for a state’s economic policies and thus
a de facto guarantee and requisite for prospective private lenders.82
By the mid-1980s, the World Bank also began to grant loans for adjustment
purposes, where the rationale was to meet balance of payment difficulties,
rather than for specific projects.83 Debtor nations also had to agree to reform
“inappropriate public policies.”84 “Conditional loans” were the World Bank’s
first explicit foray into the domestic policies of its debtors and were the
predecessor of “structural adjustment programs” (SAPs).85 The Bank had
been gradually embracing a broader vision of its role in the development
process,86 yet as the international debt crisis widened and deepened, the Bank
began to use structural adjustment in an increasingly intrusive manner.87
The World Bank concluded that the primary impediment to economic
growth in the Global South was national government policies and it began to
condition loans on an increasingly wide range of domestic plans.88 For
example, World Bank interventions encompassed legal and judicial reform,
family planning, education, developing the private sector, health care, and
other initiatives.89 The Bank’s Articles of Agreement prohibited involvement
in the politics of its borrowers; therefore, the Bank justified its growing role in
the domestic affairs of its clients by broadly interpreting the concept of “eco-
nomic development.”90 If a state failed to meet structural adjustment condi-
tions, the Bank could deny future assistance.91 Adherence was also critical in
securing access to private capital.92 Accordingly, the pressure on countries
facing an economic crunch to conform to SAP conditions was enormous.93
As the debt crisis worsened, conditionality began to be viewed as inadequate
and thus, by the mid-1980s, the Bank was making structural adjustment loans
that were intended to restructure economies.94 Structural adjustment gener-
ally meant abolishing public subsidies, restricting or eliminating labor rights,
reducing public spending, promoting deregulation, lowering tariffs, tighten-
ing credit, encouraging export oriented industries, lowering marginal tax rates,
furthering currency devaluation, selling major public enterprises, price
increases and trade liberalization, furthering privatization, and a range of
other specific institutional changes prescribed under the heading of “good
governance.”95
At least in part, structural adjustment meant turning Global South coun-
tries into “favorable investment climates” for multinational corporations, but

this often conflicted with meeting societal needs.96 While higher interest rates
may attract foreign investors, they can also inflict severe economic pressure on
small businesses, including farmers, who may be unable to obtain operating
capital and thus must sell their land.97 Eliminating tariffs can promote access
to domestic markets, but it can also make it much more difficult for local
producers to compete against foreign suppliers and, as local businesses fail,
jobs vanish. Encouraging agricultural production for export may mean har-
vesting cash crops, which can cause domestic food shortages and accelerate
soil erosion.98 Thus, SAPs tended to make countries more dependent on
imported goods and manufactured items, to overexploit their natural
resources,99 and often led to a severe deterioration in living conditions.100
Reducing the public sector also meant an increase in unemployment because,
in many Global South countries, the state is the largest employer, and thus
privatizing state undertakings often meant additional hardship for the general
population.101 Extensive reductions in government subsidy programs led to
violent protests as even necessities became unaffordable102 Structural adjust-
ment thus came to be associated with human rights abuses and threats to
democracy.103 Consequently, at a minimum, SAP policies tended to make the
impoverished even poorer, destroy labor unions and labor rights, and wipe out
local enterprises that were unable to compete with large multinational
corporations.104
The social shocks and havoc wrought by SAPs are legendary.105 IFIs com-
pelled African and other Global South nations to adopt these policies in the
name of “economic truths” that essentially required suspending moral and
social values, in light of the “enormously destructive social consequences and
human costs wrought by SAPs.”106 When measured against their stated goal
and even if not intended, IFIs based SAPs on policies that were likely to
generate cruel and ineffective results.107 Some contended that SAPs amounted
to “economic coercion.”108 Others contended that SAPs were intended to
further Western interests, such as servicing Global South debt repayment to
Western banks or facilitating Western capital movements.109
However, not all commentators agreed, and some viewed SAPs more
favorably.110 Yet, even when viewed in a more positive light, the conditions
imposed by SAPs curtailed the governing capacity of Global South states by
vastly limiting the range of available economic, political, and social policy
options.111 Accepting financial assistance from the World Bank or the IMF
meant delegating considerable state decision-making authority to these
institutions, as conditionality and structural adjustment programs fore-
closed political prerogatives that are generally at the core of state
sovereignty.112

16 Part I
Of course, all of this might have been somewhat palatable if SAPs had
been successful; unfortunately, they were generally a failure. As the
1980s drew to a close, poor countries were poorer, more debt-ridden,
and less able to provide basic services such as education and health care.
As the Cold War concluded, IFIs began to acknowledge the failure of
structural adjustment and to yield somewhat to global activist pressure to
forgive the financial debt of the poorest countries. In the 1990s, IFIs
introduced the Heavily Indebted Poor Country initiative and the Poverty
Reduction Strategy Paper, in recognition of the importance of poverty
reduction and national ownership.113 Yet these initiatives were still char-
itable in nature.114 Governments that were no longer able to provide the
most elementary goods and services confronted angry populations. Yet
somehow policy failures, even those imposed from abroad, were the fault
of the governments implementing them. The Bank eventually issued an
explicit rubric on government performance, perhaps the ultimate in
intervention.
A 1989 report entitled “Sub-Saharan Africa: From Crisis to Sustainable
Growth” introduced “good governance” as a programmatic priority.115 The
good governance initiative sought to build pluralistic institutions that
would operate in a manner that resembled Western governments, with
an emphasis on privatization and “marketization,” rather than on govern-
ment economic regulation.116 Professor James Gathii has explored the
concept of good governance in some depth and he concludes that such
interventions are probably inconsistent with the bank’s mandate and are
a doubtful solution to the problems of the Global South. Professor Gathii
contends that IFIs base “good governance” policies on the questionable
assumption that reducing government intervention in the economy will
automatically increase economic growth and personal freedom. The
Organisation of African Unity and the Economic Commission on
Africa, however, identified external economic dependence as a major
factor in Africa’s poor economic performance and recommended redu-
cing reliance on Western countries; replacing it with a self-sustaining
development strategy utilizing the continent’s resources.117 Professor
Gathii also contends that the good governance agenda unduly focuses
too much on internal policy failures and too little on the historical and
international economic factors that Southern governments believe are the
primary causes of their current difficulties.118 However, the dramatic
failure of SAPs in resolving economic disaster in much of Sub-Saharan
Africa and the rest of the developing world prompted yet another IFI
development policy re-tooling;119

The Washington “Consensus” and the “New” Conditionality120

Structural adjustment was a function of the US free market fundamentalism
that eventually became part of the development paradigm known as the
Washington Consensus. Economist John Williamson coined the term in
1989,121 believing there was a consensus regarding these particular prescrip-
tions, at least with respect to South and Central America.122 But they soon took
on a life of their own, as IFIs applied them broadly across the Global South
and they became ends in and of themselves rather than instruments to realize
more equitable and sustainable growth.123
Development specialists at the IMF, the World Bank, and in Western
capitals seemed to agree on this set of policy prescriptions to liberalize large
segments of poor nations. This included fiscal discipline; tax reform; liberal-
ized interest rates; reordering public expenditures priorities away from non-
market subsidies and toward public goods such as health and education;
effective protection of property rights; privatization; market deregulation;
competitive exchange rates; liberalizing trade; and easing barriers to foreign
direct investment. Williamson and others later panned his policy prescriptions
in light of its failures and perceived successes, including that Washington
Consensus policies had the best chance of succeeding in the context of
“strengthened political institutions.”124
Washington Consensus policy failures were legend and widespread, includ-
ing in its initial target area, Latin America. Furthermore, in Africa and Russia,
negative side effects continued to increase and multiply. Countries tend to
turn to the IMF or the World Bank when their economies are in recession. In
such circumstances, slashing government deficits can make matters worse in
the short term, and spending cuts often have the most deleterious effects on
the poor. Foreign competition quickly overwhelmed nascent domestic indus-
tries, while deregulation and liberalized rules on foreign investment opened
markets to speculative ‘hot money’ that caused severe inflation. Rapid privat-
ization of state industries frequently resulted in fraud as political cronies took
over previously state-owned sectors.125
Moreover, the Washington Consensus was a one size fits all policy. As they
applied and mandated generic reform policies for developing economies, IFIs
forced the same prescriptions on all countries, whether in Latin America,
Africa, or the Caribbean. There was little consideration of whether there were
appropriate conditions on the ground for success and the persistent disconnect
between theory and practice meant experts applied concepts without examin-
ing the underlying social, political, or economic environment.126 Financial
panics and crises continued to disrupt IMF clients and the results from even

18 Part I
the most diligent adherents to IMF orthodoxy, such as Argentina were dismal,
if not disastrous.127
It was becoming increasingly clear to many that Western models for eco-
nomic development had been ineffective in much of the Global South,
disappointing many unindustrialized countries. However, the view from
Washington, D.C. was quite different. In American eyes, the international
economy was booming, foreign direct investment was exploding, and the
American brand was an international phenomenon, hence vindicating the
Washington Consensus.128 America continued to insist on Washington
Consensus policies, and to pursue strategies that benefited the United
States, even if it ruined poor nations and devastated their poorest citizens.
Global South countries were marginalized, under stress, and increasingly
aware that rich countries did not intend to play by the rules they were
creating.129
For example, even as they demanded adherence to Washington
Consensus policies, which essentially meant poor counties had to open
their economies to global competition and, at least theoretically, access to
global markets, the Global North tended to engage in these policies only
when it suited their commercial purposes. Agriculture is a case in point as
it is the singular arena where Global South nations possess some advan-
tage. Yet Global North counties tend to protect their farmers and thus
prevent poor countries from exploiting their most salient comparative
advantage, agricultural production.130 As Professor Carmen Gonzalez dem-
onstrates, this has had demonstrably negative effects on numerous coun-
tries, including food insecurity and environmental degradation.131
Nonetheless, rich nations not only erect barriers to agricultural imports,
but also subsidize their farmers, thus making it difficult for farmers from
low-income nations to compete.132 Accordingly, poor countries subject to
World Bank and IMF mandates must not only open their markets and
compete with multinational corporations but they must also compete with
subsidized agricultural goods and are not allowed, or are unable, to subsid-
ize their own farmers. Such policies contradict the professed desire to help
poor nations and shaped reactions to the Washington Consensus and
Global South aspirations to level the playing field. Moreover, as skepticism
regarding the Washington Consensus grew and conditions became more
acute, poor nations observed that industrialized countries had not modern-
ized employing any of the policies IFIs were imposing on poor nations.
Global North states had actively protected infant industries and freely used
export subsidies – practices that the World Bank and the IMF condemn
and generally prohibit.133

The Final Development Framework? Global integration?

Beginning in 1990, the World Bank articulated what it labeled a new ortho-
doxy that it reiterated throughout the 1990s. A series of reports advocated
market friendly interventions, such as “stable macro-economic foundations
to inspire confidence in the private sector that would create a competitive
environment where private enterprises could flourish; be integrated into the
global economy; and where the public could participate in the market.”134
The 1990 World Development Report proposed that the poor be incorporated
into the global capitalist system, by putting them to work in the service of
international capital. Governments were advised to define and protect prop-
erty rights; provide effective legal, judicial, and regulatory systems; make
available an efficient civil service; and protect the environment. As develop-
ment policy emphasized export-led growth, the state’s role was mainly to
support private markets.135 To implement these policies, internationally super-
vised restructuring policies and IFI-induced recessions replaced state man-
aged stabilization policies to prevent recessions or depressions.136 The sphere
of needs that public institutions would satisfy began to shrink and social safety-
net legislation was restructured to promote, rather than work against, market
forces. The Comprehensive Development Framework congealed the new
neoliberal orthodoxy of markets and democracy.
In 1999, the World Bank published “Entering the 21st Century,” which
consolidated this decade-long process to devise and define a comprehensive
development framework (CDF).137 With this report, development truly
embraced almost all aspects of domestic governance. The underlying premise
of the CDF was that economic growth was structural; had human and physical
characteristics; and should be guided by such principles as: comprehensive-
ness, including all affected actors, a long-term collective vision of needs, and
an equal approach between structure, society, and economics.138 Individual
member states, not the World Bank, were to determine development goals and
strategies and the proper mechanism local governments and organizations
were to utilize were market-friendly policies and incentives.139 The CDF also
appropriated development strategies previously designated as “alternative”
such as “environmental management, human resource development, build-
ing self-reliance, and focusing on civil society, social institutions, and human
rights.”140
The World Bank also tried to respond to some of its critics and move beyond
the macroeconomic failures that characterized structural adjustment. The
problem was that the Bank, as well as other international financial institutions,
could only revise policies within the same discursive space.141 When

20 Part I
combined, the prescriptions of the DF encompassed almost all aspects of the

social, economic, and political lives of Global South governments and their
peoples. It shows how established and commonplace all-inclusive and wide-
ranging interventions in the Global South have become, as the World Bank
was still disseminating prescriptions for restructuring societies in the name of
development. Additionally, these economic programs often exacerbated
inequality and poverty in many Global South countries.
post-washington consensus reform: development goals

and introspection
Reforming the Washington Consensus

The Washington Consensus became increasingly untenable given its inability
to generate positive results. Initially IFIs augmented the original requisites
with modifications dubbed “second generation reforms.” For instance, under
the new rubric, “institutions” regained significance as “drivers and promoters
of economic performance” and, thus, institutional modifications were added
to the list of requisites. Yet, as Professor Dani Rodrik, a renowned scholar in
this arena observes: “institutions are by their very nature deeply embedded in
society,” making institutional change quite rare and much more likely to
occur during periods of social turmoil, such as in the “aftermath of war,
revolution or other major upheavals.” He concludes that if major institutional
change is necessary for development, the “prospects for growth in Low Income
Countries is pretty dismal.”142 Additional requisites also included, inter alia,
anti-corruption, corporate governance, an independent central bank, finan-
cial codes and standards, flexible labor markets, participating in the WTO,
social safety nets, and targeted poverty reduction.143 Some of the new condi-
tions made Washington Consensus policies somewhat more legitimate
because they included at least “rhetorical concessions and partial recognition
of the need to alleviate poverty.”144 145 146 147
As IFIs tinkered around the edges of the Washington Consensus, neoliberal-
ism was vindicated in Washington policy circles. As it happened, Washington
Consensus policies coincided with a period of “hyper-efficiency and dynamic
growth in global markets.” Manufacturing no longer had to be near markets,
satellites expanded telecommunications, and the Internet materialized and
rapidly expanded. Technological breakthroughs led to both liberalized com-
munications and financial transactions. Thus, from the US point of view, the
international economy was booming and the United States, the titular head of
the IFIs that determined much of development policy and discourse and the

source of development theory continued to insist on failed Washington

Consensus policies. Nonetheless, even in IFI policy circles, there was increas-
ing recognition that Washington Consensus policies had not been particularly
effective.148 By the dawn of the twenty-first century, it was apparent to many
states and policy-makers that the strategies proffered by IFIs were ineffective
and had little appeal or legitimacy. Eventually, deeper introspection eman-
ated from IFIs themselves.
IFI Introspection, Absorption, or Both?

Two reports published in the early 2000s raised the potential of transforming
IFIs and the broader development community. In 2005, the World Bank
published Economic Growth in the 1990s: Learning from a Decade of Reform
(hereinafter Learning from Reform) and, in 2008, the Commission on Growth
and Development released The Growth Report: Strategies for Sustained
Growth and Inclusive Development (hereinafter The Growth Report).149
These kinds of reports are common in development circles, where institutions
such as the World Bank issue them periodically to assess progress, measure
successes, and failures, and to prescribe their next agenda.
These particular Reports, however, suggested more doubt than usual about
the efficacy of World Bank policies and recommendations. For example,
Learning from Reform acknowledged that growth in developing countries
had been very uneven and that even if Chile, China, India, and other East
Asian countries had grown significantly, and lifted millions out of poverty,
these achievements were not due to observing the “conventional wisdom,”
meaning World Bank policies.150 The Report acknowledged that overambi-
tious reforms “may be politically impractical and inadvisable on theoretical
grounds and that economic policy is necessarily contextual.”151 Recognizing
the influence of “context” on policies is a change for IFI policy-makers, who
have tended to ignore context in favor of equally applying unvarying policy
prescriptions to all.152 While the World Bank still believed there were “com-
mon, key functions that must be pursued for economic growth,” it acknow-
ledged there is no “unique combination of policies nor governments and
institutions to achieve them.” The Bank also recognized that it needed to
afford Global South governments more agency than previously recognized.153
To at least one observer, Learning from Reform emphasized “IFI humility,
policy diversity, selective and modest reforms and experimentation;” the
absence of a “unique universal set of rules”; and abandoning formulae and
the ever elusive search for “best practices.”154 Another observer noted that
Learning from Reform stressed the impact of institutions: “the virtues of

22 Part I
experience, selective reforms, eclecticism, experimentation, the middle

ground, and learning by doing.”155 These are unusual propositions from
institutions that have persistently made ambitious claims regarding policies
usually viewed as blueprints for development.156
Nonetheless, it is still not clear that there has actually been a fundamental
shift in the practice or discourse of development. While Learning from Reform
asserts that countries should have more latitude in achieving particular goals,
the nature of those policy prescriptions are quite explicit and are still issued by
IFIs. Grand theories and plans persist, as demonstrated by such models as the
Millennium Development Goals (MDGs) and then, in the late 2000s,
Inclusive Growth (IG).157 Although growth was still a necessary prerequisite
to reducing poverty, a variety of policy permutations could achieve this
objective and “growth diagnostics” could be employed to select appropriate
policies.158 While “growth diagnostics” sounds familiar, the Inclusive Growth
rubric claims it is different because discerning “correct” policies is determined
inductively and is based on “other successful growth experiences.”159 In
reality, however, IG policies are barely distinguishable from other post-
Washington Consensus dogmas. In reality, the World Bank incorporated
very few substantive concessions to its long-standing policies that growth is
more important than equity.160
On a parallel front, the UN Millennium Summit adopted the UN
Millennium Development Goals (MDGs) in 2000.161 Eight MDGs and eight-
een targets addressed a range of subjects, including eradicating “extreme
poverty and hunger,” universal private education, gender equality, reducing
child mortality, and improving maternal health, combating infectious disease,
such as HIV/AIDS, and other major diseases, environmental stability, and
developing a global partnership for development.162 The MDGs project stres-
ses a comprehensive and simultaneous increase in “public investment, cap-
acity building, domestic resource mobilization and official development
assistance,” along with a “framework for strengthening governance, promoting
human rights, engaging civil society and promoting the private sector.”163
The theoretical underpinnings of the UN Millennium Project is that Sub-
Saharan African countries are caught in a “poverty trap” and, to escape, the
Project endorses a “big push,” meaning “large-scale simultaneous efforts to
raise capital stock (public, private, and human) to levels that trigger neoclas-
sical forces of convergence.”164 Several problems with this hypothesis have
been noted by development theorists but, for our purposes, what stands out is
that it unequivocally represents traditional development theory and practice
with large one-size-fits-all, overarching solutions to myriad problems.165 While
Learning from Reform and, to some extent, inclusive growth contained at least

some measure of humility on the part of IFIs and other developers, this is the
polar opposite and probably as “holistic as institutional fundamentalists could
imagine.”166
Although the MDGs preceded the other reforms, the goals are frequently
cited, while Inclusive Growth and Learning from Reform, not so much,
making it questionable whether IFIs and other multilateral institutions have
changed quite as much as critics would have hoped. Moreover, it is quite
evident that IFIs and the Global North intend to remain at the center of
development theory and practice, as evidenced by attitudes regarding bilateral
economic assistance, detailed in Chapter 4. Developers posit traditional
(meaning Global North) paradigms as the standard and press the emerging
donors discussed below in Chapters 4 and 5 to report to and coordinate with
Global North dominated institutions and nations.167 Most of these efforts have
been resisted and, while it is apparent that change is on the horizon, it is not
coming from the Global North or traditional multilateral institutions. Rather,
it is coming from quarters that may prove more difficult to control, to wit the
Global South.
notes
1. Development might be loosely defined as modernization and national
economic growth. The League of Nations Mandate System and its
successor the United Nations Trusteeship Systems were precursors. For
an extensive discussion of the concept of development before 1949, see
Michael Cowen, The Invention of Development, in Power of
Development 27 (Jonathan Crush ed., 1995); Michael Watts, A New
Deal in Emotions, in Power of Development 44 (Jonathan Crush ed.,
1995).
2. Arturo Escobar, Encountering Development 3 (1995) (quoting
US President Harry Truman).
3. Formally, the United Nations Monetary and Financial Conference was
a meeting of 730 delegates from all of the forty-four Allied nations in
Bretton Woods, New Hampshire. The meeting was to establish
institutions that would regulate the international monetary and
financial system. The Bretton Woods Conference, 1944, US
Department of State Archive, https://2001-2009.state.gov/r/pa/ho/time/w
wii/98681.htm (last visited July 7, 2020).
4. See Antony Anghie, Time Present and Time Past: Globalization,
International Financial Institutions, and the Third World, 32 N.Y.
U. J. Int’l L. & Pol. 243, 266 (2000) (noting World Bank
interference in any activity that involves development). See also James

24 Part I
Thuo Gathii, Good Governance as a Counter-Insurgency Agenda to

Oppositional and Transformative Social Projects in International Law,
5 Buff. Hum. Rts. L. Rev. 107 (1999). The International Monetary
Fund (the IMF) and the International Bank for Reconstruction and
Development (the World Bank) were to address diverse aspects of
economic issues nations believed were in need of international
collaboration.
5. “Conditionality” – the IFI practice of making loans conditional on
borrowing state policy or structural changes – allows the World Bank
and the IMF to restrict credit if a country fails to comply with the terms
of its lending agreement. Mary C. Tsai, Globalization and
Conditionality: Two Sides of the Development Coin, 31 Law & Pol’y
Int’l Bus. 1317 (1999); Catherine Gwin & Jacques Polak, The
International Monetary Fund in a Multipolar World
(1989).
6. According to Section I of Article I of IBRD’s Articles of Agreement, the
Bank is: “To assist in the reconstruction and development of territories of
members by facilitating the investment of capital for productive purpose,
including the restoration of economies destroyed or disrupted by war,
the reconversion of productive facilities to peacetime needs and the
encouragement of the development of productive facilities and
resources in less developed countries.” International Bank for
Reconstruction and Development Articles of Agreement, Dec. 31, 1945,
art. I, § 1, 60 Stat. 1440, 16 U.S.T. 1942 as amended, https://www.world
bank.org/en/about/articles-of-agreement/ibrd-articles-of-agreement (last
visited June 10, 2021) [hereinafter IBRD Articles of Agreement].
7. See John D. Ciorciari, A Prospective Enlargement of the Roles of the
Bretton Woods Financial Institutions in International Peace Operation,
22 Fordham Int’l L.J. 292, 298–99 (1998); see also IBRD Articles of
Agreement, supra note 6.
8. See Ciorciari, supra note 7, at 298–99; see also Dominique Carreau, Why
Not Merge the International Monetary Fund (IMF) with the
International Bank for Reconstruction and Development (World
Bank)?, 62 Fordham L. Rev. 1989, 1991 (2004).
9. IBRD Articles of Agreement, supra note 6, art. III, § 5(b).
10. For example, Nicaragua, ruled by the Somoza family, received ten
World Bank loans between 1951 and 1960. However, Guatemala, with
three times Nicaragua’s population received no support from the Bank
until the downfall of its communist leaning regime in 1955. See
Balakrishnan Rajagopal, From Resistance to Renewal: The Third World,
Social Movements, and the Expansion of International Institutions, 41
Harv. Int’l L.J. 529, 548 (2000).

11. In launching the IDA in 1959, US President Dwight Eisenhower

explained:
Traditional unilateral aid was sustaining a prevailing social order, which
was unjust to the masses of the people, but we could do nothing directly
about this without violating the policy of non-intervention in the internal
affairs of other nations. The creation of the new bank changed this, for
now we had a multinational instrument, secure against control by any
one country, for bettering the life of people throughout the Americas; if
this instrument insisted upon social reform as a condition of extending
development credit, it could scarcely be charged with “intervention.”
Dwight D. Eisenhower, Waging Peace, 1956–61: The White
House Years, 516, quoted in Devesh Kapur et al., The World
Bank: Its First Half Century 155 (1997). Accordingly, the IDA
created a regional mechanism that conditioned development assistance
on specific internal reforms.
12. See supra note 11.
13. See Rajagopal, supra note 10, at 552.
14. The IMF was to promote “international monetary cooperation” and inspire
fiscal confidence by making the Fund’s resources temporarily available to
IMF Members under adequate safeguards.” Articles of Agreement of the
International Monetary Fund, July 22, 1945, art. I(i), I(v), 60 Stat. 1401, 29
U.S.T. 2203, as amended, www.imf.org/. See also Enrique R. Carrasco &
M. Ayhan Kose, Income Distribution and the Bretton Woods Institutions:
Promoting an Enabling Environment for Social Development, 6
Transnat’l L. & Contemp. Probs. 1 (1996); Daniel D. Bradlow,
The World Bank, the IMF, and Human Rights, 6 Transnat’l L. &
Contemp. Probs. 47 (1996); Stephen Anthony, IMF Structural
Adjustment Programs: An Econometric Evaluation, 3 Geo. Pub. Pol’y
Rev. 133 (1998).
15. Essentially, IMF members agreed to relinquish some sovereignty over
their national monetary systems in exchange for needed short-term
assistance and a more stable international monetary system under IMF
guidance. See Carreau, supra note 8, at 1991.
16. See id. at 1995 (also noting that this decision may have been in violation
of the par value system established in the IMF Articles of Agreement).
17. See id.
18. See id. at 1996.
19. Professor Carreau observes:
Gradually and involuntarily, the IMF lost its influence over most
developed member states, which remain bound by very limited monet-
ary obligations since the collapse of the par value system in 1971 and

26 Part I
which have abstained from turning to the IMF for assistance . . .

because of the conditions imposed.
Id. at 1997 (noting that IMF lending has always been conditional; borrowers
are required to adopt stabilization plans and to correct the types of imbalances
that were thought to have figured significantly in precipitating World War II).
20. Professor Carreau further notes:
The IMF’s role seems limited to controlling the economies of Member
States requesting financial assistance, namely developing countries and
former command economy countries that have no alternative sources
of outside financing.
Id. at 1997–98.
21. This criteria was not among the IMF’s original purposes nor was it added
to its Articles of Agreement in 1979. Jacques J. Polak, The Changing
Nature of IMF Conditionality, 184 Essays in International
Finance 1, 17 (Princeton University Int’l Fin. ed., 1991); IMF
Managing Director Michael Camdessus, quoted in id., at 19.
22. Rajagopal, supra note 10, at 573.
23. See Rajagopal, supra note 10, at 541; see also Genoveva Hernández Uriz,
To Lend or Not to Lend: Oil, Human Rights, and the World Bank’s
Internal Contradictions, 14 Harv. Hum. Rts. J. 197 (2001).
24. These commentators mostly accept the sincerity and validity of the
IFI goal to alleviate poverty and improve standards of living. See
Operational Directive 4.15: Poverty Reduction (1992), The World
Bank Operational Manual 2 (Dec. 1992) (noting that “sustainable
poverty reduction is the Bank’s overarching objective”); The Poverty
Reduction and Growth Facility (PRGF) – Operational Issues,
Prepared by Fiscal Affairs Department, World Bank, Dec. 13, 1999,
http://www.imf.org/external/np/pdr/prsp/poverty2.html#1 (proclaiming
“poverty reduction efforts among low income members are a key
and more explicit element of a renewed IMF growth-oriented
economic strategy”).
25. See, e.g., Ruth Gordon, Saving Failed States, 12 Am. U. J. Int’l L. &
Pol’y 903 (1997); David Greenberg, Law and Development in Light of
Dependency Theory, 3 Res. Int’l. & Soc. 129, 152 (1980); James
Thuo Gathii, Retelling Good Governance Narratives on Africa’s
Economic and Political Predicaments: Continuities and Discontinuities
in Legal Outcomes Between Markets and States, 45 Vill. L. Rev. 971,
1002 (2000). Professor Rajagopal suggests an alternative analysis that
differs from the liberal and radical critiques. He maintains that just as
we define the Global South by the concept of development, their

mission defines IFIs, and the development project has become that
mission. He continues:
IFIs have had a complex relationship with Global South resistance. . . .
it is the process by which [IFIs] have dealt with that resistance, and not
so much the resistance itself, that have revealed the centrality of the
resistance to the formation of the [IFIs’] changing institutional
agendas . . . This . . . is hardly acknowledged by the [IFIs], who see
their evolution as being governed purely by the laws of economics,
finance, or their Articles of Agreement. It matters less that poverty
alleviation programs never alleviate poverty or that conditionalities
never achieve their stated goals. Rather, these specific
interventions . . . redound to the authority and expansion of inter-
national institutions.
Rajagopal, supra note 10, at 576.

26. Gathii, supra note 4, at 224.
27. The other 99 percent were from outside the continent. See
Paatii Ofosu-Amaah et al., The Role of Multilateral Institutions in
African Development, 30 Law & Pol’y Int’l Bus. 697, 711 (1999).
28. See Ozay Mehmet, Westernizing the Third World: The
Eurocentricity of Economic Development Theories 63 (2d
ed. 1999).
29. See Escobar, supra note 2, at 24 (stating that development theory was
strongly influenced by the neo-Keynesian consensus that dominated
economic thinking and practice in the post-war period); see also
Paul Cammack, Neoliberalism, the World Bank and the New Politics of
Development, in Development Theory and Practice 157, 161
(Uma Kothari & Mari Minogue eds., 2002) (noting the assumption
that states could and should intervene directly in production and
distribution, making development an active, state-led process); see also
Mehmet, supra note 28, at 96.
30. See Cammack, supra note 29, at 157, 161; see also Mehmet, supra note
28, at 60.
31. Id. Mehmet, supra 28 at 96. Planners did not consider how countries
would administer these ambitious plans; indeed, institution building
was ignored and Western planners utilized a “how to do” approach.
32. Escobar, supra note 2.
33. Underdeveloped countries were believed to be “trapped in a vicious
circle of poverty and thus lacking capital, it would therefore have to
come from abroad.” Escobar, supra note 2, at 40.
34. IFIs directed funds toward “project lending” to develop infrastructure that
was intended to facilitate business by cultivating the factors necessary for
economic growth. Bank officials believed states could not construct

28 Part I
industries without electricity and the means to transport finished products.

Thus, it was crucial to build electric power plants and roads because, in
the absence of this kind of infrastructure, few economic activities were
possible. Sandra Blanco, Symposium: Part One: Pursuing the Good Life:
The meaning of Development as It Relates to the World Bank and the IMF,
9 Transnat’l. & Contemp. Probs. 109, 110 (1999). Consequently, the
Bank financed mainly dams, highways, and other large-scale
infrastructure projects. Tsai, supra note 5.
35. In 1961, the UN General Assembly unanimously approved Resolution
1710 declaring the UN’s First Development Decade. A/PV.1084 19
Dec. 1961 e; A/5056 United Nations Development Decade:
A Programme for International Economic Co-operation (I).
36. For example, the goal of the first resolution was to attain, “in each less
developed country, a substantial increase in the rate of growth,” with
each country setting its own target, but with a common objective
minimum. A/73/PV.105 Sept. 10, 2019 GA/12173 115–1–40.
37. Escobar, supra note 2, at 40.
38. Pierre de Senarclens, How the United Nations Promotes Development
Through Technical Assistance, in The Post-Development Reader
(Majid Rahnema & Victoria Bawtree eds., 1997).
39. Blanco, supra note 34, at 111.
40. Carreau, supra note 8, at 1999.
41. Arguably, this was also a violation of the World Bank’s Articles of
Agreement, which provide that the Bank’s lending policy is to be
dictated by purely financial considerations, meaning its funds can be
lent only for projects that are reasonably expected to generate sufficient
funds to repay its loans. Although these projects would contribute to the
overall development of member states, they could not be viewed as
profit-oriented. Indeed, many did not generate any income whatsoever.
Thus, the Bank increased its financial exposure, and borrowing
members had to utilize already limited foreign exchange resources to
repay the Bank. Not surprisingly, the Bank began to face defaults.
Carreau, supra note 8.
42. Jennifer N. Weidner, World Bank Study, 7 Buff. Hum. Rts. L. Rev.
193, 198–203 (2001). See also Edmund Ozmanczyk, Encyclopedia
of the United Nations and International Agreements 528
(2003); G.A. Res. 2626, U.N. GAOR, 25th Sess., at 39 (1970).
43. Gustavo Esteva, Development, in The Development Dictionary:
A Guide to Knowledge as Power 13–14 (Wolfgang Sachs ed., 1992).
As early as 1962, ECOSOC recommended integration of economic and
social aspects of development. See also United Nations, The United
Nations Development Decade: Proposals for Action 1960–70
(1962) (declaring that “development is growth plus change . . . change is

social and cultural as well as economic, and qualitative as well as

quantitative . . . The key concept must be improved quality of peoples’
lives”).
44. James H. Mittelman & Mustapha Kamal Pasha, Out from
Underdevelopment Revisited: Remaking of the Third
World 92 (1997); Esteva, supra note 43, at 15. It also dovetailed with
the World Bank strategy of targeting groups such as the rural poor and
small farmers.
45. See infra notes 75, 86, and accompanying text. This coincided with the
end of Robert McNamara’s tenure as President of the World Bank.
46. Mittelman & Pasha, supra note 44.
47. Id.
48. Id. For more information on the meaning of NGOs and their role in aid see
The Rise and Role of NGOs in Sustainable Development, International
Institute for Sustainable Development, https://www.iisd.org/b
usiness/ngo/roles.aspx (last visited July 7, 2020). [https://web.archive.org/w
eb/20200727080051/https://www.iisd.org/business/ngo/roles.aspx].
49. Mittelman & Pasha, supra note 44. Neither theorists nor NGOs,
however, bothered with the endogenous cultures from which
grassroots institutions might emerge. See also Rosemary McGee,
Participating in Development, in Development Theory And
Practice 92 (Uma Kothari & Mari Minogue eds., 2002);
Majid Rahnema, Participation, in The Development
Dictionary 116 (Wolfgang Sachs ed., 1992).
50. Esteva, supra note 43, at 15.
51. See Richard C. Blake, New Development: The World Bank’s Draft
Comprehensive Development Framework and the Micro-Paradigm of
Law and Development, 3 Yale Hum. Rts. & Dev. L.J. 159, 166
(2000). Micro-development theorists also emphasize a more equitable
distribution of international economic power, which can occur only at
the macro level. Russell Lawrence Barsh, The Right to Development as
a Human Right: Results of the Global Consultation, 13 Hum. Rts. Q.
322, 327 (1991).
52. Ruth Gordon, Unsustainable Development, in International
Environmental Law and the Global South 50, 50–73
(Shawkat Alam et al. eds., 2015); The World Commission on
Environment and Development, Our Common Future (1991).
53. See David P. Forsythe, The United Nations, Human Rights, and
Development, 19 Hum. Rts. Q. 334, 334–35 (1997). See also Blake,
supra note 51, at 166, 168.
54. Esteva, supra note 43, at 14.
55. Id. at 14.
56. Id. at 25.

30 Part I
57. Gordon, supra note 52.

58. McGee, supra note 49, at 92; Rahnema, supra note 49, at 116.
59. See Rajagopal, supra note 10.
60. For an analysis of participation, see Rahnema, supra note 49, at 116. The
emergence of these paradigms may also reflect the influence of NGOs.
61. Esteva, supra note 43, at 6; Dusan Djonovich, United Nations
Resolutions (1972). In some respects, these resolutions reflect the
failures of development, the hopes of Global South nations, and
convey the progression of development in theory and practice.
62. Mittelman & Pasha, supra note 44.
63. Ruth Gordon & Jon H. Sylvester, Deconstructing Development, 22 Wis.
Int’l L.J. 1, 39 (2000).
64. G.A. Res. 36, U.N. GAOR, 35th Sess., 83rd plen. mtg. at 106, U.N. Doc. A/
RES/35/36 (1980). Part of the strategy included establishing a new
international economic order, which would include industrialization and
a more stable, equitable, and effective international monetary system.
Ozmanczyk, supra note 42, at 528. Unsuccessful proposals for
resolving the crisis included the “Baker plan,” the “Brady plan,”
“debt-for-equity,” “debt-for-nature,” and “debt-for-development”
plans, “securitization,” and the “Miyazawa,” “Mitterand,” and
“Robinson” proposals. Jon H. Sylvester, Impracticability, Mutual
Mistake, and Related Contractual Bases for Equitably Adjusting the
External Debt of Sub-Saharan Africa, 13 N.W. J. Int’l L. & Pol’y
258, 265–76 (1992). In 1996, the IMF and World Bank jointly launched
the Heavily Indebted Poor Countries Initiative (HIPC) to provide
debt relief assistance over and above what countries could directly
arrange with creditors. The program is still in existence. See Debt
Relief Under the Heavily Indebted Poor Countries (HIPC) Initiative,
International Monetary Fund, https://www.imf.org/en/About/
Factsheets/Sheets/2016/08/01/16/11/Debt-Relief-Under-the-Heavily-I
ndebted-Poor-Countries-Initiative (last visited June 10, 2021).
Professor Thomas observes that: “[t]he debt burden is directly
related to world hunger and poverty because debtor governments
must divert precious and scarce resources to paying down external
debt instead of meeting the pressing needs of their populations.”
Chantal Thomas, International Debt Forgiveness and Global Poverty
Reduction, 27 Fordham Urb. L.J. 1711, 1712 (2000).
65. U.N. G.A. Res. A/RES/35/56 International Development Strategy for the
Third United Nations Development Decade (Dec. 5, 1980).
66. Jerome I. Levinson, A Perspective on the Debt Crisis, 4 Am. U. J. Int’l
L. & Pol’y 489 (1989).
67. Oil prices, which had increased five-fold between 1971 and 1974, doubled
again in 1980. Id. at 491, 495–96. By 1974, OPEC annual revenues

exceeded US$100 billion. Sylvester, supra note 65, at 264. The

precariousness of the situation was compounded by political instability
in the Middle East, following the 1979 fall of the Shah of Iran, and
double-digit inflation in the United States. Id.
68. Levinson, supra note 67, at 495–96.
69. Sylvester, supra note 65, at 265 (noting that these developments
affected Global South debtors in two critical ways. First,
a significant portion of the loans carried floating interest rates, and
these rates skyrocketed. Second, because of tight money and
declining demand, Global South debtors had trouble selling their
exports to raise revenue. In 1982, Mexico made its historic
declaration of inability to meet even the interest payments on its
external debts, and the “third world debt crisis” was well on its way to
becoming a household phrase).
70. Stefan Halper, The Beijing Consensus: Legitimizing
Authoritarianism in Our Time 51 (2012).
71. William Finnegan, The Economics of Empire: Notes on the Washington
Census, Harper’s Mag. (May 2, 2003). The Washington Census has
been adamantly pursued despite its apparent failure. Id.
72. See Halper, supra note 71, at 51:
“Keynesian economists generally argue that, since aggregate demand is
volatile and unstable, a market economy will often experience inefficient
macro-economic outcomes in the form of economic recessions (when
demand is low) and inflation (when demand is high). These can be
mitigated by economic policy responses, in particular, monetary policy
actions by the central bank and fiscal policy actions by the government,
which can help stabilize output over the business cycle. Keynesian
economists generally advocate a managed market economy – predomin-
antly private sector, but with an active role for government intervention
during recessions and depressions. Keynesian economics served as the
standard economic model in the Global North from the later part of the
Great Depression until the end of the post WWII expansion (1945–1973).
Its influence waned with the stagflation of the 1970s although the 2007–
2008 financial crisis led to a resurgence in Keynesian thought.”
Keynesian Economics, W i k i p e d i a (July 7, 2020), https://en
.wikipedia.org/wiki/Keynesian_economics.
73. See Halper, supra note 71, at 52.
74. See id.
75. See id. at 54. Milton Friedman argued that the Keynesian model did not
account for “inflationary expectations,” meaning that when the government
attempted to help the economy with additional public spending, the
positive effects were temporary. While they initially created jobs and put

32 Part I
money in peoples’ pockets, increasing aggregate demand, after a time

businesses and workers began to build their expectations of rising prices
and government spending into their wage and price demands, thus creating
a cycle of government spending and rising inflation. The reality facing
Western governments and the impact of their interventions in the face of
recession seemed to confirm this theory. Id. at 53.
76. In the 1970s, monetarism was part of an “intellectual renaissance for
conservatism.” It was part of a conservative resurgence known as the
New Right, which spurred new well-funded think tanks and
magazines. Social conservatism also became part of the equation.
Halper, supra note 71, at 56; Finnegan, supra note 72. The
governments of Ronald Reagan in the United States and Margaret
Thatcher in the United Kingdom advocated free market ideology in
the US and this became part of World Bank policy, which was foisted
on reluctant poor nations. Joseph E. Stiglitz, Globalization
and Its Discontents 13 (2003); Halper, supra note 71, at 55, 57.
Individuals had to be “free to choose how to live, what to buy, and
what to produce.” Id. at 55; Godfrey Hodgson, Myth of American
Exceptionalism 92 (2009).
77. Rajesh Swaminathan, Regulating Development: Structural Adjustment
and the Case for National Enforcement of Economic and Social Rights,
37 Colum. J. Transnat’l L. 161 (1998); Anthony, supra note 14, at 133.
78. IMF Development and Review Department, Experience Under the
IMF’s Enhanced Structural Adjustment Facility, Finance &
Development 32 (1997), http://www.imf.org/external/pubs/ft/fandd/1
997/09/pdf/imf.pdf (last visited June 10, 2021).
79. Swaminathan, supra note 78; Bradlow, supra note 14; Anthony, supra
note 14. Organization of Economic Development members and
countries such as Brazil, Mexico, South Korea, Taiwan, and Thailand
could bypass the IMF and its constraints. Carreau, supra note 8, at 1996.
80. Id.
81. Swaminathan, supra note 78, at 178–79; Bradlow, supra note 14. The
IMF’s Articles of Agreement explicitly prohibit any consideration of
a nation’s political affairs in making loan determinations. Carreau,
supra note 8, at 1997.
82. Id. at 1997.
83. Id. at 1999. Loans were made for adjustment in given sectors (sector
adjustment) or for national economies as a whole (structural
adjustment); Tsai, supra note 5, at 1331–32; Swaminathan, supra note
78, at 169–70; Weidner, supra note 42, at 200.
84. The Bank, of course, determined which policies were “appropriate.”
Weidner, supra note 42, at 214–41.

85. Initially, the Bank developed two types of policy-based loans for the
Global South. The first type of these structural adjustment loans or
SALs generally ran eight to ten years and the borrowing country had to
conform with certain Bank guidelines regarding their economic
policies. The objective was to “(1) correct balance of payments
imbalances, (2) eliminate distortions and promote microeconomic
efficiency, (3) reduce high inflation rates, (4) protect or resume output
growth, and (5) minimize the cost of adjustment to the poorest.”
The second type of policy-based lending is “sector adjustment loans,”
or SECALs. More narrowly defined than SALs, SECALs target specific
sectors of the economy, such as exports, agriculture, industry, energy, or
public enterprises. Carrasco & Kose, supra note 14, at 29; Tsai, supra note
5, at 1320–21; Jo Marie Griesgraber & Bernhard G. Gunther,
Eds., The World Bank: Lending on a Global Scale (1996).
86. Carreau, supra note 8, at 1999; Bradlow, supra note 14, at 38–39; Uriz,
supra note 23, at 203–04.
87. Carrasco & Kose, supra note 14, at 38–39; Bradlow, supra note 14, at 57.
88. Id. (noting that in the 1980s, the Bank became heavily involved in
funding development projects in such spheres as health, education,
agriculture, and housing).
89. Uriz, supra note 23, at 205; Weidner, supra note 42, at 198–99.
90. Carrasco & Kose, supra note 14, at 198–99; Bradlow, supra note 14, at 60.
91. Carrasco & Kose, supra note 14, at 38–39; Tsai, supra note 5, at 1322;
Gwin & Polak, supra note 5.
92. The “seal of approval” earned by complying with World Bank and IMF
credit packages was critical to attaining private loans from the commercial
banks of developed countries. See Tsai, supra note 5; Anthony Galano III,
International Monetary Fund Response to the Brazilian Debt Crisis:
Whether the Effects of Conditionality Have Undermined Brazil’s
National Sovereignty?, 6 Pace Int’l L. Rev. 323, 339 (1994) 6;
Anne Orford, Locating the International: Military and Monetary
Interventions after the Cold War, 38 Harv. Int. L.J. 443, 445 (1997).
93. Tsai, supra note 5, at 1322.
94. Gordon & Sylvester, supra note 63, at 37–44.
95. Ruth Gordon, The Dawn of a New, New International Economic Order?,
72 Law & Contemp. Probs. 131, 148 (2009); Anghie, supra note 4, at
252–53.
96. Id.; see also Antony Anghie, Civilization and Commerce: The Concept of
Governance in Historical Perspective, 45 Vill. L. Rev. 887, 908 (2000)
(discussing good governance and the IFI goal of furthering neoliberal
economic policies through structural adjustment entailing privatization,
trade liberalization and currency devaluation). For instance, regulations

34 Part I
protecting labor often were early casualties of these policies.

Swaminathan, supra note 78, at 181; Orford, supra note 93.
97. Griesgraber & Gunther, supra note 86; Doug Bandow,
Perpetuating Poverty: The World Bank, the IMF, and the
Developing World (Ian Vasquez ed., 1994).
98. Carmen Gonzalez, Markets, Monocultures, and Malnutrition:
Agricultural Trade Policy Through an Environmental Justice Lens, 14
Mich. St. J. Int’l L. 345 (2006).
99. Griesgraber & Gunther, supra note 86; Bandow, supra note 98.
100. See Anghie, supra note 4, at 252–53 (commenting on adverse effects of IFI
structural adjustment programs in the Global South). Somalia and Rwanda
are two examples of states subjected to extensive structural adjustment
programs that may have contributed to their collapse; see id. at 263.
101. Swaminathan, supra note 78, at 180–82; Griesgraber & Gunther,
supra note 86; Orford, supra note 93, at 470–71.
102. Swaminathan, supra note 78, at 180–82; Griesgraber & Gunther,
supra note 86.
103. Orford, supra note 93; Swaminathan, supra note 78, at 181; See
Rajagopal, supra note 10; Griesgraber & Gunther, supra note 86;
Bandow, supra note 98, at 59–60.
104. Finnegan, supra note 72.
105. It is well known that the World Bank has renamed the program, now
calling it Structural Reforms.
106. Between 1980 and 1995, IFI-imposed SAPs applied to approximately
80 percent of the global population, including Mexico, Argentina,
Bolivia, Peru, Ecuador, Venezuela, Trinidad, Jamaica, Sudan, Zaire,
Nigeria, Zambia, Uganda, Benin, Niger, Algeria, Jordan, Russia, and
Indonesia. All these countries had violent, often lethal, protests against
specific SAP requirements, such as sharp increases in fuel prices and
steep currency devaluation. There were also food riots and university sit-
ins over IMF-mandated doubling of bread or transport costs. Halper,
supra note 71, at 60.
107. James Ferguson, Global Shadows: Africa in the Neoliberal
World Order 70–71 (2006). Professor Ferguson discusses a 1991 memo
by Larry Summers written when he was the chief economist for the World
Bank. Summers urged the export of toxic substances and pollution to
African nations on economic grounds. Professor Ferguson believes this
lack of morality also pervades structural adjustment programs.
108. Griesgraber & Gunther, supra note 86; Bandow, supra note 98;
see also Swaminathan, supra note 78, at 177–89.
109. For example, James Gathii opines that structural adjustment in Sub-
Saharan Africa primarily focused on producing a conducive
framework to facilitate debt repayment owed by African states to

international banks and lending agencies and to secure the

unhindered influx of new international capital into these countries.
Gathii, supra note 4, at 207.
110. Halper, supra note 71, at 59, citing Fareed Zakaria, who notes that these
methodologies did address hyperinflation.
111. Tsai, supra note 5, at 1321; Orford, supra note 93, at 470.
112. Tsai, supra note 5, at 1319; Galano, supra note 93, at 323; Orford, supra
note 93.
113. Carol Gallo, Rethinking the Development Aid Paradigm, 5 Yale J. Int’l
Aff. 146, 147 (2010).
114. See id.
115. Uriz, supra note 23, at 204. The Bank defined the good governance
initiative as “a systematic effort to build pluralistic institutional
structures, a determination to respect the rule of law, and a vigorous
protection of the freedom of the press and human rights.” Id.
116. Id. at 204–05 (noting that “activities relating to governmental stability
and predictability and the rule of law were consistent with the Bank’s
mandate”); Gathii, supra note 4, at 109.
117. See id. at 108.
118. Id. (noting that African governments take the opposite view of IFIs and
other proponents of the good governance agenda. Also, contrasting the
Lagos Report by the Organisation of African Unity and the Economic
Commission on Africa with the Berg Report’s emphasis on improper
economic policies pursued by African governments as the main cause of
the crisis and proposing a market-based economic strategy).
119. Watts, supra note 1, at 58.
120. G.A. Res. 199, U.N. GAOR, 45th Sess., 71st plen. mtg., U.N. Doc.
A/RES/45/199 (1990). See also Ozmanczyk, supra note 42.
121. In 1989, Williamson hosted a conference to discuss the economic reforms
carried out in Latin America during the 1980s. To identify areas of further
reform, see Scott Kennedy, The Myth of the Beijing Consensus, 19J. of
Contemporary China 461 (2010); Stiglitz, supra note 77, at 53
(noting that the Washington Consensus was designed to respond to very
real problems in Latin America and made considerable sense); Halper,
supra note 71, at 57; Gordon & Sylvester, supra note 63.
122. In the years following the Washington Consensus’ original publication,
Williamson recognized that he had overstated the existence of
a consensus on some issues, including the benefits of competitive
exchange rates. There also was wide disagreement in Washington
regarding how quickly nations should liberalize their foreign exchange
regimes. Kennedy, supra note 122, at 463.
123. Stiglitz, supra note 77, at 53.
124. Kennedy, supra note 122, at 465.

36 Part I
125. Halper, supra note 71, at 58.

126. He uses the example of the Mozambique cashew industry, where the
government had previously banned the export of raw cashew nuts to
stimulate local packaging and processing industries. When
Mozambique applied for international assistance it was required to
remove the export bans and liberalize trade, thereby destroying the
local cashew industry and with it thousands of jobs. Of course, no-
one bothered to examine the underlying conditions in Mozambique
before mandating policy prescriptions. Halper, supra note 71, at 59.
127. Finnegan, supra note 72. It seems that, with this ideology, the only real
freedom is the freedom to make a living, meaning that commercial
freedom, free speech, free press, religious freedom, and political
freedom are secondary at best. Id. Argentina did everything it was told
to do during the 1990s – privatization, deregulation, trade liberalization,
and tax reform, and was frequently cited as an example of the virtues of
neoliberalism – until its collapse in 2001. Nevertheless, like other
fundamentalisms, market fundamentalism is impervious to argument
of inconvenient facts. Id. Maintaining that in some places at least some
of these policies were successful, he cites Uruguay, El Salvador,
Tanzania, and Uganda. Id. at 57.
128. These policies coincided with a period of “hyper-efficiency and dynamic
growth in global markets,” manufacturing was revolutionized as
manufacturing no longer had to be near markets, the development of
satellites, the expansion of telecommunications and the internet, and
breakthroughs in technology, freight, communications, and the
liberalization of financial transactions. Halper, supra note 71, at 65–66.
129. Finnegan, supra note 72; Ruth Gordon, Sub-Saharan Africa and the
Brave New World of the WTO Multilateral Trade Regime, 8 Berkeley
J. Afr.-Am. L. & Pol’y 79 (2006); Carmen Gonzalez,
Institutionalizing Inequality: The WTO Agreement on Agriculture, Food
Security, and Developing Countries, 27 Columb. J. Envt’l. L. 431
(2007) (on poverty in the agricultural field).
130. Finnegan, supra note 72; Gonzalez, supra note 99.
131. Id., Gonzalez, supra note 99.
132. Carmen G. Gonzalez, Deconstructing the Mythology of Free Trade:
Critical Reflections on Comparative Advantage, 17 Berkeley La Raza
L.J. 65 (2006). Of course, many could not afford such subsidies in any
case and such measures also tend to depress international commodity
prices. Gordon, supra note 130, at 434.
133. Ha-Joon Chang, Kicking the Ladder: Development Strategy
in Historical Perspective 59–68 (2002).
134. For example, governments should provide health care, education,
nutrition, and family planning services, which are spheres that often

are not well-served by the private market. Cammack, supra note 29,
at 166.
135. Id. at 164. This policy promoted a pattern of growth that utilized the most
abundant asset possessed by the poor – their labor. Basic social services,
such as primary education, health care, and family planning, that make
it possible for the poor to work, were to be made available and this would
more easily allow capital to exploit the global labor market. Benefits are
to be targeted to potential workers, which then makes it difficult to
survive outside of the labor market and creates safety nets that propel
workers back into the market if they temporarily drop out. The prevailing
logic is that governments should pursue policies that provide businesses
(capital) across the globe with an adequate number of healthy, educated
workers, and to impose disciplines to ensure they remain available.
136. This reversed previous orthodoxies, overriding previous policies that
emphasized import substitution and a strong state. IFIs abandoned
progressive strategies, such as distributive tax policies to foster income
equality, in favor of fiscal reforms that rewarded entrepreneurship, but
accentuated inequality. Governments terminated measures to regulate
prices and abandoned public control over labor and money markets.
Cammack, supra note 29, at 166.
137. For a discussion of these reports, which were promulgated throughout
the 1990s, see Cammack, supra note 29, at 157, 164.
138. Structural aspects included good and clean governance, a well-
organized financial system, and an adequate social safety net to
accommodate the short-term negative impact of some World Bank
programs. Physical characteristics for growth included quantifiable
achievements in building infrastructure, including adequate water
and sewer systems, access to energy, access and transportation
inlays. See Memorandum from James D. Wolfensohn to the Board,
Management, and Staff of the World Bank Group, http://www
.worldbank.org/cdf/cdf-text.htm (last visited Nov. 16, 2003). See also
Blake, supra note 51, at 162. Sector-specific aspects of development
referred to strategies to promote the advancement of rural, urban,
and private sectors. Cammack, supra note 29, at 157, 164; 1.
Development should be holistic in nature, so that growth focuses
not just on economic variables, but also on social and political
implications. 2. The development process should involve all actors
affected by World Bank lending practices and development policies
should have a long-term focus. 3. A long-term, collective vision of
needs and solutions should be articulated that will draw sustained
national support. 4. Structural and social concerns should be treated
equally and contemporaneously with macroeconomic and financial
concerns.

38 Part I
139. Weidner, supra note 42, at 223–24; Blake, supra note 51, at 163. NGOs had
long been critical of – and largely ignored by – IFIs. The Bank now invites
selected NGOs to assist them to take part in development projects. By
1999, 52 percent of Bank projects involved some type of NGO
participation. Weidner, supra note 42, at 220. A rather striking and wide-
ranging example of NGO participation in World Bank programs began in
1995 when the Bank entered into a joint initiative with the Structural
Adjustment Participatory Review Initiative Network (SAPRIN). Today,
SAPRIN works in seventeen countries, where it consults with World Bank
officials on the effects of specific lending arrangements. The objective of
SAPRIN is to legitimize local knowledge in the analysis of economic
reform programs and to make space for and institutionalize grassroots
involvement in macroeconomic decision-making. See Structural
Adjustment Participatory Review International Network, SAPRIN, htt
p://www.saprin.org (last visited Nov. 16, 2003).
140. Gordon & Sylvester, supra note 63, at 46; Watts, supra note 1, at 58. The
rationale behind building self-reliance was “the desire to release those
energies that permit ordinary people to take charge of their lives.” Id.
Civil society is also central in the alternatives to development paradigm,
which has focused on “new social movements.” Id. Both the new
development economics of the 1990s and the anti-development
paradigm assert alternative strategies and both speak of an expanded
role for civil society, and both question the form, function, and character
of the developmental state. Id. at 59.
141. The IMF approach to the Global South has continued to evolve, but it has
been “less comprehensive” in its interventions in the name of development.
Although it is outside the scope of its mandate, the IMF expressly supports
Global South economic growth. The IMF now includes poverty alleviation
among its major goals, although its Articles of Agreement do not
contemplate this objective. Carrasco & Kose, supra note 14, at 39–41;
Rajagopal, supra note 10, at 569–74. The IMF created the Poverty
Reduction and Growth Facility (PRGF) in 1999. As described by the
IMF, this new endeavor “aims at making poverty reduction efforts among
low-income members a key and more explicit element of a renewed growth-
oriented strategy.” Creation of the PRGF was significant because it was the
first time the IMF had officially declared that “growth-policies should be
implemented in a framework in which the pressing need to reduce poverty
is also a central objective.” The Poverty Reduction and Growth Facility
(PRGF) – Operational Issues, International Monetary Fund, htt
p://www.imf.org/external/np/pdr/prsp/poverty2.htm (last visited June 10,
2021) [hereinafter IMF, Operational Issues]. Instead of pursuing strictly
macroeconomic objectives, “high quality” economic development
became the IMF’s new emphasis, and “high quality” development

included considering the social and political consequences of IMF lending.

Rajagopal, supra note 10, at 569–74. “Good governance” in borrowing
countries is also currently a stated goal of the IMF, and thus the IMF’s
stated objectives are now more similar to those of the World Bank. Unlike
the World Bank, the IMF has not formalized relations with NGOs.
Bradlow, supra note 14, at 77. The IMF continues to utilize adjustment
lending. IMF, Operational Issues, supra note 142. Yet even the IMF and
World Bank acknowledge it is problematic. See International
Monetary Fund, Annual Report 1997 (1997); World Bank,
Global Development Finance (1998). Dani Rodrik, Goodbye
Washington Consensus, Hello Washington Confusion: A Review of the
World Bank’s Economic Growth in the 19990s: Learning from a Decade of
Reform, 44 J. Econ. Literature 973, 977 (2006).
142. Alfredo Saad-Filho, Growth, Poverty and Inequality: Policies and
Debates from the (Post-)Washington Consensus to Inclusive Growth, 5
Indian J. of Hum. Dev. 321, 329 (2011). This list augmented the
original catalog of “secure property rights, deregulation, fiscal
discipline, tax reform, privatization, re-orientation of public
expenditures, financial liberalization, trade liberalization, openness to
FDI and unified and competitive exchange rates.” Id.
143. Id.
144. See generally Gordon, supra note 130.
145. Gonzalez, supra note 99, at 363. See generally Gordon, supra note 130.
146. Gordon, supra note 130, at 99–101, Gonzalez, supra note 133, at 264;
Gonzalez, supra note 99.
147. Rodrik, supra note 142, at 975 (detailing a World Bank report on
economic growth in the 1990s that included problems in all of the
varied countries employing Washington Consensus policies). Id. at 973.
148. World Bank, Economic Growth in the 1990s: Learning from
a Decade of Reform (2005) [hereinafter Learning from
Reform]. Launched in 2006, the Commission on Growth and
Development is a World Bank entity. “The Commission on Growth
and Development brings together twenty-two leading practitioners from
government, business and the policymaking arenas, mostly from the
developing world.” The Commission on Growth and Development,
World Bank, http://web.worldbank.org/WBSITE/EXTERNAL/EXT
ABOUTUS/ORGANIZATION/EXTPREMNET/0,contentMDK:2322
5570~pagePK:64159605~piPK:64157667~theSitePK:489961,00.html
(last visited July 7, 2020).
149. Learning from Reform, supra note 149, at 4 (noting “the experiences
of Latin America since the [19]80s, the collapse of growth in Africa, and
the economic collapse of Eastern Europe versus the stability of growth in
industrialized countries and the success of East Asian countries that had

40 Part I
also experienced few crises”); Id. at 9 (noting that China, India, and
Vietnam had succeeded, while “substantially deviating from the full
package of reforms”); Saad-Filho, supra note 143, at 330.
150. Learning from Reform, supra note 149, at 78–82.
151. Learning from Reform, supra note 149, at 9–10.
152. Id. at 13 (noting that “different policies can have the same effects and the
same policy can have different effects, depending on the context”).
153. Id. at 12, 14.
154. Rodrik, supra note 142, at 976.
155. Saad-Filho, supra note 143, at 12. Professor Saad-Filho notes that this
conversion followed economic collapse in transitioning former Soviet
bloc countries; Sub-Saharan African countries that did not “take off,”
despite IFI guidance, reforms, aid, and debt forgiveness; and chronic
financial and balance of payments difficulties in reforming countries.
See Learning from Reform, supra note 149, at 15.
156. “Rodrik characterizes the WB’s view of itself as ‘the seat of orthodoxy’ in
the universe of development policy.” Rodrik, supra note 142, at 973.
157. IG is defined as “growth that is not associated with an increase in
inequality.” Ravi Balakrishnan, Chad Steinberg & Murtaza Syed, The
Elusive Quest for Inclusive Growth: Growth, Poverty, and Inequality 8
(IMF Working Paper Asia and Pacific Department, June 2013), http://
www.imf.org/external/pubs/ft/wp/2013/wp13152.pd. IG is also viewed as
“providing equality of opportunity in access to markets, resources, and
an unbiased regulatory environment for businesses and individuals.”
Saad-Filho, supra note 143, at 11–12. The WB now recognizes that
significant inequality can impede growth.
158. Id. at 12.
159. “The World Bank’s shift towards growth diagnostics and identifying
constraints (to inclusive growth), that should be addressed
sequentially, replicates debates about the “order of liberalization” in
the 1980s in the aftermath of the collapse of initial reforms in Latin
America, and controversies regarding transition in the former Soviet
bloc. Id.; Developers and IFIs have construed Inclusive Growth as
“incorporating carefully selected insights from the developmental state
debates and presenting them as if they were practical truths.” Id.
160. The World Bank does not appear to address equity or the needs of the
poor adequately. Id. at 12.
161. In September 2000 at the Millennium Summit, 189 world leaders adopted
the UN Millennium Declaration, committing their nations to a new
partnership to reduce extreme poverty within a series of planned targets,
with a 2015 deadline. These goals became known as the UN Development
Project. UN Development Project, U n i t e d N a t i o n s , www
.unmillenniumproject.org/goals/ (last visited July 10, 2020). The MDGs

were part of the UN Millennium Declaration, adopted by 189 states and

by the UN General Assembly.
162. News on Millennium Development Goals, United Nations, http://
www.un.org/millenniumgoals/(last visited June 10, 2020).
163. It also contains details on necessary steps to reach the specified MDGs
and views existing development assistance as inadequate. Rodrik, supra
note 142, at 980.
164. Id. at 981.
165. For example, one scholar questions whether Sub-Saharan African
countries are really caught in poverty traps and questions the viability
of pursuing high growth in a “big-push fashion” or “through the infusion
of large amounts of foreign aid.” Id.
166. Id. at 982 (noting that developers came to perceive “the imprudence of,
assuming what we know”; “abstaining from making grandiose claims;
moving cautiously, and concentrating efforts where the pay-offs seem
greatest”); “The only difference from past fundamentalisms is the
emphasis placed on different components.” Id.
167. Rapid growth in China and India, neither of which followed World
Bank policies, are responsible for much of the reduction in global
poverty during the 1990s. Hence, the Commission on Growth and
Development invited these countries to take part in its discussions and
in drafting Economic Growth in the 1990s. Although the Report neglects
to mention that this massive reduction in global poverty took place
outside IFI policy prescriptions, the World Bank did invite India and
China to participate in the discussions and contribute to the final report.
Saad-Filho, supra note 143, at 11.

Development Disrupted - CH - I - Constructing - Development

Uploaded by

Copyright:

Available Formats

You might also like

Development Disrupted - CH - I - Constructing - Development

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Development Disrupted - CH - I - Constructing - Development

Uploaded by

Copyright:

Available Formats

1

It is difficult to imagine a world without development, which seems to have

Truman also supposed that the international community, through newly

the institutional edifice

https://doi.org/10.1017/9781108539876.003 Published online by Cambridge University Press

The World Bank

https://doi.org/10.1017/9781108539876.003 Published online by Cambridge University Press

materialized and subsequently failed, the Bank expanded the development

The International Monetary Fund

Evaluating IFI Intervention in the Global South

https://doi.org/10.1017/9781108539876.003 Published online by Cambridge University Press

radical detractors viewed IFIs as Global North instruments to exploit the

cycles of conventional wisdom

The “Golden Age” of Development: 1950–1970

https://doi.org/10.1017/9781108539876.003 Published online by Cambridge University Press

Development specialists began to conclude that international institutions

The Second Decade: Incorporating Social and Economic Elements

https://doi.org/10.1017/9781108539876.003 Published online by Cambridge University Press

Policy studies that examined procedures, values, and social consequences

https://doi.org/10.1017/9781108539876.003 Published online by Cambridge University Press

environment, over-population, food scarcity, the role of women, habitat

https://doi.org/10.1017/9781108539876.003 Published online by Cambridge University Press

consequences of imperialism. As Global North nations and IFIs used political,

Developments’ “Lost Decade” (1980–1990)

https://doi.org/10.1017/9781108539876.003 Published online by Cambridge University Press

https://doi.org/10.1017/9781108539876.003 Published online by Cambridge University Press

arrangements and broadened the traditional scope of its review to evalu-

https://doi.org/10.1017/9781108539876.003 Published online by Cambridge University Press

https://doi.org/10.1017/9781108539876.003 Published online by Cambridge University Press

https://doi.org/10.1017/9781108539876.003 Published online by Cambridge University Press

The Washington “Consensus” and the “New” Conditionality120

https://doi.org/10.1017/9781108539876.003 Published online by Cambridge University Press

https://doi.org/10.1017/9781108539876.003 Published online by Cambridge University Press

The Final Development Framework? Global integration?

https://doi.org/10.1017/9781108539876.003 Published online by Cambridge University Press

combined, the prescriptions of the DF encompassed almost all aspects of the

post-washington consensus reform: development goals

Reforming the Washington Consensus

https://doi.org/10.1017/9781108539876.003 Published online by Cambridge University Press

source of development theory continued to insist on failed Washington

IFI Introspection, Absorption, or Both?

https://doi.org/10.1017/9781108539876.003 Published online by Cambridge University Press

experience, selective reforms, eclecticism, experimentation, the middle

https://doi.org/10.1017/9781108539876.003 Published online by Cambridge University Press

https://doi.org/10.1017/9781108539876.003 Published online by Cambridge University Press

Thuo Gathii, Good Governance as a Counter-Insurgency Agenda to

https://doi.org/10.1017/9781108539876.003 Published online by Cambridge University Press

11. In launching the IDA in 1959, US President Dwight Eisenhower

https://doi.org/10.1017/9781108539876.003 Published online by Cambridge University Press

which have abstained from turning to the IMF for assistance . . .

https://doi.org/10.1017/9781108539876.003 Published online by Cambridge University Press

Rajagopal, supra note 10, at 576.

https://doi.org/10.1017/9781108539876.003 Published online by Cambridge University Press

industries without electricity and the means to transport finished products.

https://doi.org/10.1017/9781108539876.003 Published online by Cambridge University Press

social and cultural as well as economic, and qualitative as well as

https://doi.org/10.1017/9781108539876.003 Published online by Cambridge University Press