The World Bank from the SSE Point of View

Herman Daly, the most known advocate of the steady-state economy (a sustainable, quantitative-growth-less economy “as if people mattered”), once was employed at the World Bank. It is thus interesting to read about this powerful development institution from his, an insider’s, perspective.

The main goal of the WB is to make loans, to push the money out the door, to be a money pump. If financial capital were really the limiting factor countries would line up with good projects and the WB would ration capital among countries. But financial capital is superabundant and good projects are scarce, so the WB had to actively push the money. To speed up the pump they send country development teams out to invent projects; if the projects fail, then they invent structural adjustment loans to induce a more favorable macro environment; if structural adjustment loans are treated as bribes by corrupt borrowing governments, the WB does not complain too much for fear of slowing the money pump and incurring a “negative payments flow.” [more]