On the eve of the Bretton Woods Conference in 1944, then-US Treasury Secretary Henry Morgenthau claimed that in order for the post-war global financial architecture to be successful, it was necessary to drive “the usurious money lenders from the temple of international finance”, and to make capital serve “the general welfare.” As global multilateralism reaches another inflection point in the wake of the Covid-19 pandemic, worsening climate change impacts, a growing debt crisis, and increased global macroeconomic volatility and geopolitical tensions, this vision has apparently been lost.
Instead, the World Bank’s proposed Evolution Roadmap relies on a deepening of the Cascade approach. In a briefing launched today, civil society argues that this represents part of the larger political project which Prof Daniela Gabor has referred to as the ‘Wall Street (Climate) Consensus’, which reshapes the role of the developing states as de-risking agents for private capital, with international financial institutions helping to facilitate this process. Rather than ‘evolution’, the promotion of the Cascade represents the reaffirmation by World Bank management and shareholders of a flawed development paradigm that assumes incentivising private finance is inherently benign and productive, while failing to acknowledge that the type of projects designed to attract profit-seeking private investors and generate quick returns might not match the public interest and national or local priorities, or support sustainable economic transformation.
The briefing calls for the World Bank to #RerouteTheRoadmap, as discussions on World Bank reform continue, including at the upcoming Annual Meetings in Marrakesh in October.
It makes 6 key recommendations:
- Commission an external and independent review of the World Bank Group’s development effectiveness
- Invert the Cascade, putting the public at the core of the World Bank’s efforts to support global public goods
- Develop and fund a human rights policy
- Mainstream climate justice into the Bank’s operations
- Mainstream a gender lens into the Bank’s operations, extending the mandate of the upcoming Gender Strategy
- Develop better metrics for measuring – and policies to tackle – inequality.
Access the briefing here.
