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The following article appeared in Left Business Observer #95, November 2000. It retains its copyright and may not be reprinted or redistributed in any form - print, electronic, facsimile, anything - without the permission of LBO.


World Bank news

For many years, the World Bank has been under political attack by people in the poorer countries. More recently, the attack has spread to what officialdom calls the "donor" countries -- the rich countries whose capital markets supply the money that the Bank lends to the poor ones. In the face of these attacks, the World Bank has been fighting back by trying to act nicer, by professing its great concern for the poor. While this is almost entirely empty public relations gesturing, there are even severe limits on what they'll say.

This newsletter has extensively covered the battle surrounding the Bank's former chief economist, Joseph Stiglitz. Stiglitz was forced out of office by Treasury Secretary Lawrence Summers for publicly questioning the wisdom of the Washington Consensus, the familiar package of austerity, deregulation, and privatization that has repeatedly been applied to scores of countries around the world since the so-called Third World debt crisis broke out in 1982 (see LBO #94 for details). Though Stiglitz was purged, he did leave behind some traces, and the fate of one of those, an economist named Ravi Kanbur, is highly illuminating.

Stiglitz hired Kanbur to supervise the drafting of the Bank's annual World Development Report, its flagship publication. In the past, the Report was typically drafted by Bank economists and polished up by journalists on loan from The Economist or the Financial Times -- organs that would later report glowingly on the contents of the document. This year, a draft version was posted on the web, and public comments were actively sought. The message of the draft was that contrary to standard development doctrine, growth wasn't enough to lift the poor out of poverty -- instead, policy had to be actively tilted in their favor.

Dollar standard. As the public discussion around the draft progressed,