Tug of War: the World Bank’s New Governance and Anticorruption Efforts

The recent governance and anticorruption initiative of the World Bank1 (the Bank) has come under intense fire from developing nations and some corners of Europe. There is little disagreement that corruption and poor governance in developing nations represent substantial impediments to sustainable growth. The issue is whether the Bank’s continuing efforts to root out corruption and promote good governance encroach upon political matters forbidden by the Bank’s charter.2 Consideration of this issue results in criticism from three camps. Some critics raise the charge of “mission creep”— that the Bank’s good governance efforts are an attempt to act beyond its mandate. Others contend that in fact, the Bank’s new initiative will fail because the Bank does not adequately promote human rights and democratic governance. Finally, some critics charge that, irrespective of the Bank’s mandate, its promotion of laissez-faire economic polices is the wrong prescription for the developing world because these policies fail to address weak institutions or establish rule of law.