Both institutions are headquartered in Washington
DC. A tacit agreement between the US and Europe
has meant that the head of the World Bank is
routinely appointed by the US, whereas the head of
the IMF is a European. As the largest shareholder of
the World Bank, the US exercises the largest voting
rights, with 15.85% of the vote.
The World Bank’s Millennium Development Goals
are admirable:
•
Eradicate extreme poverty and hunger
•
Achieve universal primary education
•
Promote gender equality
•
Reduce child mortality
•
Improve maternal health
•
Combat HIV/AIDS, malaria, and other diseases
•
Ensure environmental sustainability
•
Develop a global partnership for development
Unfortunately, the extent to which the interests of
the dominant countries influence the implementation
of policy in developing countries means that the
medicine prescribed is not always what is best for the
patient.
The relationship between these twin behemoths of
the international system and the borrower states
has often resulted in situations that have proven
detrimental to the vulnerable economies. The IMF
often attaches conditions that sometimes inhibit
growth and social stability. As economist Jeffery
Sachs once put it, “the Fund’s usual prescription is
‘budgetary belt tightening to countries who are much
too poor to own belts’.”
A singular focus on matters pecuniary can lead to
unforeseen social consequences. Cuts to public health
and education can undermine domestic political
institutions.
The worst case scenario is that private consultancies
can manipulate Country Assistance programs
for private gain. An interesting book makes a
number of allegations in this regard. In 2004, John
Perkins, a former international consultant wrote
an unprecedented exposé of the hidden side of the
international system, entitled “Confessions of an
Economic Hitman”.
19