The World Bank and the natural environment : exploring the contradictions

Abstract

Following World War II, the Western Allies created international financial institutions such as the World Bank, in order to provide the financing needed for reconstructing war-ravaged economies, primarily in Europe, and to provide financing for economic development throughout the world. The World Bank did provide partial financing for this reconstruction phase but soon turned its attention to its secondary mandate--financing economic development throughout the world. Due to the absence of extensive economic development in the South, as compared to the industrial economies of the North, the Third World provided ideal conditions for World Bank influence to flourish.

Since its creation the World Bank has successfully grown to become a powerful financial and political actor in the global arena. With annual budgets in the billions of dollars, the Bank has become one of the most influential actors in promoting capitalist economic development in the South, as well as in other regions. Its endeavour to finance economic development has now evolved to include both project and policy based lending in order to achieve its mandates.

Despite its financial success the World Bank continues to be confronted with a harsh reality--economic development as promoted by the Bank has not only been unable to eradicate, reduce or even alleviate poverty, but has also contributed to the degradation of the planet's natural environment, particularly within the Third World.

By examining certain key aspects of the World Bank's structure and operation, such as voting structure, constitutional and ideological foundation, and its maturation, this paper exposes the World Bank's unsuccessful attempts to promote environmentally sound economic development.