World Bank: Epic Fail

Accuracy in Academia ^ | May 18, 2014 | Spencer Irvine

[Academiadotorg]

Development programs run by the World Bank and other multilateral agencies regularly fail because they rely on government aid rather than the free market, New York University economist William Easterly said recently at the Cato Institute. william easterly

For example, Easterly recounted, in a World Bank-backed forestry program in Uganda, farmers were forcibly removed from their farms and relocated to cities. He said, “The result of this, this is the tyranny of experts at its most extreme.”

Similarly, experts cannot shake their belief that somewhere there is a “benevolent autocrat” they can assist. Easterly noted that in Ethiopia under former dictator Meles Zenawi, when the country showed economic growth, the credit went to Zenawi. However, other economists found that the growth actually resulted from “a recovery from a recent drought.”

The U.S. Agency for International Development, the World Bank, and even Bill Gates, applauded Zenawi with phrases such as “stable government” and “long term perspective.” Easterly quipped, “Stable is kind of one of those euphemistic words; it means ‘dictator’” and “long term perspective being I want to stay in power as long as possible.”

In order to laud Zenawi, all of the above avoided mentioning his government “shooting demonstrators in the streets” after a rigged vote or a 2010 “forest resettlement scheme, ” similar to the rather embarrassing one in Uganda.

Additionally, Zenawi sentenced a “peaceful blogger” to an 18-year prison term. Upon his death, “the Ethiopian government celebrated” the arrival of U.S. Secretary of State John Kerry by imprisoning at least a half-dozen more bloggers.

But World Bankers never seem to learn from such embarrassments. The current World Bank President, Dr. Jim Yong Kim, told an audience in October of 2012 that the World Bank must “become the ‘solutions bank,’ and the bank should offer what he would call, ‘evidence-based, non ideological solutions.’” Easterly said that Kim meant that “you’re not allowed to debate freedom versus autocracy.” In the same speech, Kim “called for a new science of delivery,” which Easterly averred “is so technocratic this is an embarrassment to the technocrats.”

Ironically, Kim could look at his own birthplace of South Korea in order to see how markets triumph over dictatorships. Easterly pointed out that “growth miracles in Asia” are due to “a decline in autocracy and a growth in freedom.” For instance, Easterly noted that communist North Korea still appears to be pitch black during the night sky while its neighbor, the democratic South Korea, is lit up by growth, infrastructure and economic progress.

The development community, Easterly said, “split freedom up in small slices; no one seems to have the big picture that they all go together.” He went on to say, “The World Bank also selectively chooses” these slices of freedom and still, “We praise without reservation and give credit to an authoritarian government.” Even with some progress in recent years, Easterly said that these organizations are “not making enough headway to change the prevalent mindset in development.”

[givemELL]

Why wouldn’t the World Bank fail? It’s very origin is in a work of fiction published by Col. Edward Mandell House which captured the imagination of Woodrow Wilson and the rest is history. The fictional novel, “Philip Dru, Administrator” is free reading on the internet. Published early in the nineteenth century, House gave it to Wilson to read and the League of Nations, a World Bank and Court was the outcome of House being the man who managed the election of Wilson in the first place, served as his main advisor, served as the main representative to the Paris Peace Conference in 1919, selling the idea for the League of Nations, followed by the 1943 decision to charter the UN immediately after the war. House died in 1943.

A rare 2 volume set of books, republished in paperback was the 1926 “Intimate Letters of Col. House” by Seymour, never heard of by anybody. It is strongly recommended and a copy is for sale at Amazon in hardback and in paperback.

Phillip Dru was the dictatorial administrator who ran everything in the novel. One thinks of certain officials in the Oval office and in the CFPB and other Executive Branch offices who may have been influenced by Philip Dru’s characterization.

Missing from American history’s curriculum in schools is the influence of Co. House on the entire world, especially the World Bank and the Federal Reserve. In the “Intimate Letters of Col. House”, it is clear House picked the Fed. Reserve Board’s initial members personally.

[JoeFromSidney]

Phillip Dru was the dictatorial administrator who ran everything in the novel.

House was not alone. The ideas expressed in the novel were "in the air" at the time. Benito Mussolini's Fascism was the same basic idea. When Herbert Hoover was Secretary of Commerce, he arranged for hundreds of "agreements" among the Feds, business firms, and labor unions, to fix prices, divide up markets, and set wages. Lots of people really believed that this was the way to run an economy.

[givemELL]

Yes. House’s book circulated amongst the other Progressives in the early 20th century in the US, and in the tradition of House’s experience as a Texas gubernatorial and political community organizer,detailed in his “Intimate Letters”, he chose Wilson personally to run for the Presidency and to serve as a vehicle for the advancement of his ideas in “Philip Dru”. Lots of Wall St. people bought into it as did Wilson. The US Senate did not and kept the US out of the League of Nations. House served as a centralized catalyst with the utmost influence amongst other progressives of the day, and they carried forth thru WIlson and House at the Paris Peace Conference and thereafter. My point is to note House’s centrality of power and influence in the early movement that has brought us to today with his ideas of stable, effective administrative dictatorship not bearing up very well at all, with one political party and part of the other in line with the evolutionary process highlighted by House in his fictional novel. House could never have done it alone without his creation of Wilson as President and his influence in financial circles of the day.

House is vastly unheralded in US history courses.

Thanks for your constructive comment. The “Intimate Letters of Col. House” are extremely illuminating as to how he related worldwide to the many significant others of the progressive movement on an international scale and exactly how he got there. Seymore did a fantastic job with fantastic presented resources.