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World Bank Financializing Development

Author

Listed:
  • K. S. Jomo

    (Khazanah Research Institute)

  • Anis Chowdhury

    (Western Sydney University)

Abstract

This article critically reviews the World Bank’s reorientation from its traditional role as a lender for major development projects to become a broker for private investment. It highlights the follies of the Bank’s ‘billions to trillions’ agenda, rebranded as Maximizing Finance for Development, that seeks to use aid and public money to leverage private finance, supposedly to fill the financing gap for achieving the SDGs. While such leveraging has failed to raise substantial finance, the Bank’s promotion of PPPs and ‘de-risking’ foreign private finance in developing countries has significantly increased risk for developing country governments. Focusing on ‘blending’ aid with private finance has obscured crucial measures such as macro-prudential regulations and international cooperation to address systemic issues, e.g., harmful tax competition and illicit capital outflows from developing countries via transfer pricing and tax havens. The B2T/MFD hype has also deflected attention from stagnant and declining aid flows, and onerous conditionalities, especially for the least developed and other fragile economies.

Suggested Citation

  • K. S. Jomo & Anis Chowdhury, 2019. "World Bank Financializing Development," Development, Palgrave Macmillan;Society for International Deveopment, vol. 62(1), pages 147-153, December.
    • Handle: RePEc:pal:develp:v:62:y:2019:i:1:d:10.1057_s41301-019-00206-3
    DOI: 10.1057/s41301-019-00206-3
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    References listed on IDEAS

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    1. Eswar S. Prasad & Raghuram G. Rajan & Arvind Subramanian, 2007. "Foreign Capital and Economic Growth," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 38(1), pages 153-230.
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    3. Manabu Nose, 2017. "Enforcing Public-Private Partnership Contract: How do Fiscal Institutions Matter?," IMF Working Papers 2017/243, International Monetary Fund.
    4. Pierre-Olivier Gourinchas & Olivier Jeanne, 2013. "Capital Flows to Developing Countries: The Allocation Puzzle," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 80(4), pages 1484-1515.
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    7. Cordella,Tito, 2018. "Optimizing finance for development," Policy Research Working Paper Series 8320, The World Bank.
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    Cited by:

    1. Perry, Keston K., 2020. "The New ‘Bond-age’, Climate Crisis and the Case for Climate Reparations: Unpicking Old/New Colonialities of Finance for Development within the SDGs," SocArXiv h9s2z, Center for Open Science.

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