first Madness

World Bank

new internationalist
issue 214 - December 1990

[image, unknown]
Photo: Tom Hanley / Camera Press

Me-first madness
Former employee Davison Budhoo argues that self-interest,
not poverty, is the ruling passion at World Bank headquarters.

The first thing visitors see as they enter the World Bank's flag-draped Washington headquarters is a jazzed-up video program. The subject: why the Bank's offices need to be expanded and renovated for more incisive judgment in lending to the Third World. (It already encompasses nine massive high-rise buildings straddling five blocks of Washington's most prized business area).

But the boundaries of change seem confined only to the buildings. Most employees still wince when you mention Bank President Barber Conable's 1986 claim that the Bank's central challenge 'is to mobilize the will and the resources of the affluent and of the afflicted alike in the global battle against poverty'. Said one long-time staffer recently: 'He was only telling Third World Governors what they wanted to hear.'

With nearly 7,000 employees, the World Bank is the largest bureaucracy in Washington, apart from the Federal Government. And its salaries and perks are by far the highest in the world for comparable jobs - three times as high as similar positions in the US Government, when tax-free salaries and other allowances are considered. An irresistible urge to protect what you have and to follow the lead of your boss - who writes your year-end Performance Report - structures and conditions every working hour at the Bank. This 'me-first' approach has little to do with what Conable says at political podiums around the world.

In fact, most Bank staff don't care a hoot about world poverty nor about what they should or should not be doing in the Third World. They are concerned about pay, about being 'downgraded' to less interesting positions with fewer opportunities for promotion and about losing their jobs.

In 1986, for example, when Conable ordered a massive internal reorganization to sort out the wheat from the chaff - as seen through the eyes of top management - there was panic in the ranks. Many long-term employees set out to shore up their image. In one instance, staff were bemused by the sudden, undivided interest of a Division Chief in every detail of a structural adjustment loan to a tiny country that in the past had been left wholly in the hands of the divisional lead economist. A delegation from the country waited for four days while the Division Chief learned in a frenzy all that there was to know about Bank operations there.

After an urgent exchange of memos and several impromptu meetings between the Division Chief and the Vice President for Operations, conditions for the loan were dramatically stiffened - thus winning brownie points for the Division Chief. The country's delegation, innocent witness of this blatant act of personal aggrandizement, was angry and dismayed. But there was nothing they could do about it. Outcome: a whopping promotion for the Chief when new assignments were announced and a humiliating transfer for the lead economist.

In 1987, Conable intimated to the Board of Governors' Meeting in Berlin that the reorganization had been completed. With unexpectedly strong criticism from protesters ringing in his ears, he again reaffirmed the Bank's Third World poverty mandate. And he made a new promise. Because the reorganization had helped the Bank 'greatly improve its institutional ability' it was now in a position to offer 'intellectual leadership in the understanding of development'.

After the reorganization, the Bank was divided into four 'Complexes': Operations; Policy, Planning and Research; Finance; and Administration.

The 'Operations' complex alone assigns at least four people to each country. A country economist 'to diagnose the potential for development'; a country program officer to 'co-ordinate Bank activities'; a project economist to 'assist in identification, appraisal, implementation and evaluation of individual projects'; and a financial economist to 'review and investigate all financial aspects of potential projects'. In all likelihood, a Research Department will also be involved, to explore innovative approaches to development techniques and strategies'.

According to one veteran from the Operations Evaluation Department: 'They end up falling over themselves. Job descriptions overlap so comprehensively that everybody gets frozen into a tiny space and very little gets done. It's absolute madness.'

Despite the madness, staff last year managed to win another big salary increase. This marked the end of a five-year charade involving an 'objective' and 'comprehensive' salary review by management to determine levels and principles of staff remuneration. A group of major member countries, led by the US, objected vehemently to the increase. (In fact, Mr Brady, US Secretary to the Treasury, wrote to Mr Conable in early 1989 warning him of the outrageous waste of Bank resources going into staff salaries and allowances). But internal forces within the Bank, led by the Staff Association, were strong enough to silence the objectors. Morale, which reached a trough at the time of the Brady letter, is now sky-high.

How can a middle-level economist with five years experience justify receiving what amounts to more than 300 times the per capita income of more than half of humankind? The following excerpt from a 1987 memo from the Acting Chief of a major Bank Division is brutally honest. 'Our career in the Bank,' he wrote, 'is based on our ability to talk about our work rather than on the quantity or quality of work produced.'

The writer was modest. The aspiring economist must not only talk about his work; he (and it is almost always a 'he') also has to be able to talk lucidly about the Bank and to sing its praises to all and sundry. That really is the key to a successful Bank career. And in this respect, the Issues Book is vital.

Distributed to staff by the External Relations Department, the Issues Book contains the official Bank position on every conceivable subject. It not only defines the framework within which staff members may speak; it virtually tells them what to think about the Bank and the good works that it does in the Third World. It is the Bible for those climbing the ladder. And that is virtually everyone.

Despite the pressure to conform, some employees have had the guts to speak out. As early as 1982 Mahbub ul Haq, Director of Planning and Policy Review Department, resigned to denounce the institution as 'stagnant and confused'. And in early 1990, Michael Irwin, Director of the Health Services Department and Acting Vice President for Personnel, left the institution, blasting it for arrogance, secrecy, inflated salaries and lack of cost-effectiveness. Recently Frank Vogl, Director of External Relations, also resigned, accusing the Bank of 'double standards' in its relationships with Latin America and Eastern Europe.

Like the International Monetary Fund (IMF), the Bank does not respond to 'insider' criticism. It waits for matters to blow over, hoping that what 'hostile' former staff members have to say will not be taken too seriously. It goes through the motions, however, of making it known that protesting ex-staff members are disgruntled, and that their remarks are based more on pique than fact.

In fact, many Bank employees, including senior staff, talk frankly among themselves about the ills of the institution and its inability to change, even marginally, to meet the exalted role that Barber Conable projects for it. Conable himself, at a senior managers' meeting in November, 1989 referred to the Bank as 'a battleship which turns slowly'.

Consider the following: last year, when the Bank was under heavy pressure for its dismal failure in Africa during l980s debt crisis, staff published a report showing that only countries adopting its structural adjustment programs had fared well. For some weeks the institution basked in the glory of success.

'We know a great deal about who the poor are, where they are, and how they live.
We understand what keeps them poor and what must be done to improve their lives.'


But then academics, researchers and the alternative press began to pinpoint flaws and contradictions in the Bank's analysis. 'Outside' indignation reached a pitch of protest unparalleled in the Bank's history. Result: it was forced to withdraw the report from circulation and start a more measured analysis of Africa's myriad economic woes.

Unfortunately this is one of the few success stories where world public opinion has forced the Bank to become accountable. One can point to several other major areas of Bank activity as flawed and as outrageously self-serving as the African report. In most of these instances, however, the institution succeeded in 'managing' public opinion and insulating itself from change.

For example, there has been almost no public fallout over the dismal failure of the Bank's Social Dimensions of Adjustment Program designed to 'save face' by counteracting the adverse impact on poor people of Bank structural adjustment programs. Nor has there been much attention paid to the implications for the poor in the Third World of the Bank's unyielding drive to establish free-wheeling capitalist economies in every country of the South, irrespective of circumstances.

Several of Mr Conable's recent public statements give cause for alarm. They seem to suggest that the world ought to connive with him and the Bank to perpetrate the myth of a highly-efficient organization doing its best to fight world poverty and protect the environment.

The disturbing thing is that this is not just the wishful thinking of a beleaguered man. It is already reality. For the Bank (in close collaboration with its sibling institution and comrade-in-arms, the IMF) has lined up a formidable array of forces from both the developed and developing world to support it - indeed to revere it - in everything that it says and does. Private bankers, multinational corporations, mainstream economists and their government backers are the Bank's strongest cheerleaders. As far as management and staff are concerned, blind and indiscriminate loyalty from these powerful, self-serving groups define 'rightness' and 'justification' for its Third World policies. Only the overwhelming force of countervailing public opinion can persuade them to change.

Davison Budhoo is a former economist with the World Bank and the international Monetary Fund. He is the author of Enough is Enough: Open Letter of Resignation from the International Monetary Fund (New Horizons Press, 1990) and Multilateralism and Re-enslavement (New Horizons Press, forthcoming, 1990).

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