Beyond the World Bank Agenda: An Institutional Approach to Development

Beyond the World Bank Agenda: An Institutional Approach to Development

Beyond the World Bank Agenda: An Institutional Approach to Development

Beyond the World Bank Agenda: An Institutional Approach to Development

Synopsis

Despite massive investment of money and research aimed at ameliorating third-world poverty, the development strategies of the international financial institutions over the past few decades have been a profound failure. Under the tutelage of the World Bank, developing countries have experienced lower growth and rising inequality compared to previous periods. InBeyond the World Bank Agenda, Howard Stein argues that the controversial institution is plagued by a myopic, neoclassical mindset that wrongly focuses on individual rationality and downplays the social and political contexts that can either facilitate or impede development. Drawing on the examples of Africa, Asia, Latin America, and transitional European economies, this revolutionary volume proposes an alternative vision of institutional development with chapter-length applications to finance, state formation, and health care to provide a holistic, contextualized solution to the problems of developing nations. Beyond the World Bank Agendawill be essential reading for anyone concerned with forging a new strategy for sustainable development.

Excerpt

This volume represents the culmination of a number of years of research in structural adjustment and its impact on Africa and elsewhere. My early post-dissertation work in the mid-1980s focused on economic and policy transformation in Tanzania, which became particularly interesting after the country, contrary to its stated socialist principles, reached a settlement with the International Monetary Fund and the World Bank in 1986. The changes in Tanzania led me to look more broadly at structural adjustment, which was rapidly becoming ubiquitous throughout Africa. By the late 1980s, it was becoming quite apparent that Africa and other regions were doing rather poorly under this new policy regime. I began to investigate the reasons for this by critically evaluating the theoretical underpinnings of adjustment. My initial working hypothesis was that the problem arose from a fundamental disconnect between the reality of African economies and the economic world assumed by the adjustmentrelated theories. I was also very interested in the way in which adjustment had become the dominant policy paradigm in the World Bank. One of the first areas I investigated was the impact of adjustment on manufacturing and industry, which had not performed well during the 1980s. I carefully contrasted the world of manufacturing depicted in the structural adjustment literature with the reality in African countries and predicted that adjustment would deindustrialize African countries.

A common reaction voiced in seminars critical of structural adjustment was that, despite the weaknesses, there were no alternatives. Partly in response, I began to investigate the route to development undertaken in East and Southeast Asia; my aim was to contrast their historical experiences to strategies being adopted in Africa during the 1980s. At about the same time, I started thinking about the nature of institutions and their . . .

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