The World Bank's Early Reflections on Development : A Development Institution or a Bank?
Until the late 1960s, the World Bank presented itself as an institution devoted to making sound and directly productive project loans. Yet, during its very early years, some discussions developed inside the Bank regarding the possibility of issuing...
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| Format: | Policy Research Working Paper |
| Language: | English |
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World Bank, Washington, DC
2012
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| Online Access: | http://documents.worldbank.org/curated/en/2008/07/9683581/world-banks-early-reflections-development-development-institution-or-bank http://hdl.handle.net/10986/6840 |
| Summary: | Until the late 1960s, the World Bank
presented itself as an institution devoted to making sound
and directly productive project loans. Yet, during its very
early years, some discussions developed inside the Bank
regarding the possibility of issuing different types of
loans, namely (i) loans aimed at tackling social issues
("social loans"), and (ii) loans aimed at
providing foreign currency to address disequilibria in the
balance of payments ("impact loans"). This paper
brings together historical analysis and theories of
organization development to study the housing issue as a
case in point. The analysis reveals that the Bank was
unwilling to lend for housing programs not because these
were not sound - in fact, they were - but because they were
geared toward achieving social welfare objectives and were
not directly linked to productive investment projects, such
as dams, power stations, and railroads. This early decision
had a significant impact on the subsequent development of
the Bank's view of policy-making: it locked the
institution into a particular lending pattern, and deprived
it of important intellectual resources. It was not until the
late 1960s that the Bank began to take social issues into
consideration, rather late compared with other multilateral institutions. |
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