No Credit Due: The World Bank and the IMF in Africa
This document, which is divided in two parts, mainly seeks to explain the policy-based lending programme of the World Bank and the significance of its engagement with developing economies. The first part deals with the history and economics of international development policy vis-à-vis developing economies. It commences by explaining the WB’s origins and objectives, and then addresses the origins, objectives, and outcomes of its initial project-based lending programme. It was argued in this paper, that the WB’s earlier poverty alleviation project failed to achieve its stated objectives, and worsened rather than resolved problems in third world countries in which these projects were undertaken. Through policy-based lending, the WB effectively controls the economies of borrowing countries, leaving them very little room to formulate and implement autonomous economic policies. The World Bank’s conditionalities, sometimes combined with that of the International Monetary Fund (IMF), have compounded the economic crises in numerous third world countries, with Africa the worst affected. In the second section we analyse the political economy of the intervention of the WB and IMF in the third world in general and Africa in particular. We show that the WB’s primary goal is to protect globalised capitalism and the geo-strategic, economic, and sociopolitical interests of the triad (the United States, European Union, and Japan), the G7 plus Russia, and the transnational corporations (TNCs) which drive globalised capital. This has been done, we argue, through market dogma, free trade, and aid.