Dams are considered by World Bank as an important source which contributes to the development of many countries. Large dams are believed to provide and progress power generation process, irrigation, domestic and industrial water supplies. These also provide security against natural disasters like droughts and protects from floods. But they also have their share of harmful effect. They submerge substantial land areas and alter the path of the river flowing downstream, which in certain instances cause significant undesirable impacts on the environment and on local communities.
Main body
Brief looks at the World Bank policies to set up a dam are for the following reasons, was to safeguard environmental and natural habitats, indigenous people, avoid involuntary resettlement, forests, safeguard the dams, creating projects on international water bodies or in disputed areas, and cultural property (BIC). The main aim of the bank in implementation these projects are to fight poverty and provide better living conditions. But in many cases, the argument has been raised that whether the bank has the best interest of the people in mind. For instance, a new project in Egypt will divert water from Nile to the reclaimed land in the West Delta region (BIC). But is it not changing nature? Further, the dam was contracted to large firms which are expected to leave the small firms behind increasing inequality.
World Bank along with Asian Development Bank introduced a $1.3 billion project in 2004 (World Bank). The Lao PDR dam project is expected to provide to a country which had pinned its hopes to the project which has an average income of US$320 a year (World Bank). The Bank provided a loan which had a partial risk guarantee for the project. This project is expected to help the Lao people and ensure reduction in poverty and environmental conservation.
Though there are existing controversies and debate regarding the project’s viability and benefit. Critics argue that the project’s implementation ideas such as “environmental and social impacts, resettlement, fisheries, downstream impacts, revenue management, conservation area protection plan, financing, compensation, and livelihoods” make it too big, too complicated, and/or too risky to actually induce he bank to go ahead (World Bank).
The already completed project of Nam Theun 2 was required to build a strong infrastructure for the country. The reason was the existence of poverty more than 70 percent of Lao people were under poverty on less than US$2 a day. Agriculture in the area was mostly dependent on slash-and-burn agricultural practice. The share of uneducated or did not complete primary school in the labour force was 70 percent. Around 40 percent of the people were malnutrition and and 1 in 10 will die before the age of 5. Accessibility to clean water was not available to more than half of the population.
Citing these reasons as the depiction of a requirement of a dam was presented by World Bank. According to the Bank, “Nam Theun 2 has the potential to deliver a significant and predictable stream of revenue that would have a very clear positive impact on national development.” (World Bank) The Bank believes that this project will not only affect the country social and environmental condition but also the overall macroeconomic and structural reform which are designed to endorse growth and improve the lives of Lao people. The adverse effects are expected to be Lao and Thai stakeholders, who earn their livelihood daily. This will have a downstream impact on fishing and resettlement Urooj Malik (World Bank). The key environmental concern is expected partial flooding of the Plateau to create a dam reservoir. The construction started on 2005 and is expected to finish on 2009.
Another dam which has been completed by the World Bank is the Kedung Ombo Dam which had been financed by the World Bank. (Rumansara). It was a $156 million of the project. This project was expected to provide irrigation and control floods. To get the site of the dam the World Bank is reported to have told the government to issue a warning to people living in the area of the dam that if they persistently stayed there they will incur losses. But when only a little more than 1000 households transmigrated, the dam’s doors were closed and they had to move.
As an initiation process to implement this project the Bank has asked the Government of Lao, to participate in a series of international workshops to discuss differing views of the project, based on volumes of research and analysis that are available as background. The World Bank’s main objectives of the Kedung Ombo Multipurpose Dam and Irrigation Project was to “increase food production, stimulate employment, control damaging floods, supplement water supplies, generate additional power, and improve water management” (World Bank). The specificities of the project included:
Building of the Kedung Ombo Dam;
focus was to improve active irrigation and constructing two new irrigation systems;
the project aimed at creating flood control caution and water examining system for the dam and irrigation operations; and
terms of technical assistance were provided as: “training in dam construction and safety inspection and in reservoir operation; design of irrigation works; surveys for updating classification of land for tax purposes to improve cost recovery; (iv) surveys for monitoring resettlement and compensation payments; and studies for soil and water conservation.” (World Bank)
The people of Kedumg Ombo mounted on a protest against the bank and the dam authorities. The anti-dam agitation was to get fair compensation from the dam authorities. The people of Kedumg Ombo received Rp. 250 to 300 (which are less than 15 cents) instead of Rp. 3000 and the whole project was falling short in compensation by $90 million. The government tried to move military to the dam’s site to stop student agitation. Later on the bank provided the villagers with their promised land value and was not displacing people from the site. The problem arose due to repressive resettlement policies of the government which failed to provide land for the site. This caused the problems as Kedumg Ombo and not in other projects in Indonesia.
A joint venture treaty of 1973 helped establish the Yacyretá Project between Argentina and Paraguay (World Bank). Before the sanction of the project loan, the dam site and the basic items of the project were established on 1979. From the initiation of the dam project, it was a difficult project for the World Bank as the project proposal failed to provide the inputs which were required by the Bank’s policies. Moreover, the implementation of the project was difficult due to the binational implementing agency (EBY). The project was divided into two components, first, there was a necessity of civil work consisting of two 40 meter high, five kilometer long concrete dams and 65 kilometers of embankment dam, and second the “environmental and resettlement activities” which were required to protect the people living near the dam. The agreement said that EBY had to flood the reservoir in stages, starting at 76 masl in 1994 and ending at 83masl in 1998. Presently even though the dam is completed, it serves only 60% of its operating capacity, as there are a number of resettlement and social activities which are yet to be done (World Bank).
The project has been facing certain environmental issues. The project authorities have been accused of causing the flooding of people who suffered from the severe hardships from flooding in urban creeks; believe that the flooding in the urban area was due to the reservoir. But the panel rejected the contention that the Dam was responsible for the urban creeks of Encarnación are flooding and causing severe hardship to the people. They believed that the Dam had no effect on the water level of the Paraná River at Encarnación, especially in times of flood. According to the Panel, the flooding in the urban creek was due to “upstream urbanization, lack of urban storm water drainage, and waste accumulation that impedes the flow of water in the creeks” (World Bank 2). Further, it was alleged that the flood made the drinking water in the area undrinkable. The Panel believed that the wells were polluted, but Yacyretá reservoir was not responsible for the flooding or polluting of the wells.
The Panel found that there were operational problems as per the agreement the dam should operate at 76 masl at Encarnación till the time the environmental and social compliances were done but the EBY operated the reservoir at a water level 1 meter in higher than the 76 masl limit, which does not agree to the legal agreements (World Bank).
The construction of the dam is believed to have created environmental pollution and severe health problems and that inadequate monitoring program are in place to detect this. The location of the dam was also under controversy as due to the drainage of the wastewater treatment plant. Further, the bank failed to comply with many of the World Bank compliances such as payment for re-settlers were not adequately provided for. In the Urban Creeks Program, the sequencing criteria by which people were moved was not made clear to people. Some settlers close to the dam had been adversely affected by the design and construction sites. Moreover, the hoist population was not adequately informed and discussed with regarding the building of the resettlement sites. The worst hit was the transmigrated people who had to wait for the resettlement when the project dragged for years. The dam authority was accused of being doing corrupt activities. It was believed that corruption was responsible for the proper management and implementation of the project.
Conclusion
To conclude we see that in all the three projects there has been violations, which has been accepted by the World Bank, of its environmental policies. But what is discerning is the fact that these problems continue to be a part of the World Bank projects. The report by World Commission on Dam’s (WCD) 2000 report, Dams and Development, which included 10 case studies and 100 technical studies across 125 dams has been criticized of exaggerating the of development activities, omission of the facts and biased account of the project (Bretton Woods project). From the review of the projects in Indonesia, Paraguay and Argentina, Thailand and Egypt shows that there has been a major failure on the Bank’s part to maintain social and environment policies that it upholds. This brings up the question of if the Bank has been participating in politicking the process of third world development? Even though the Bank stresses on the “the transformative role of large water infrastructure”, the benefits are yet to be savored.
References
BIC. “Environmental & Social Policies at the World Bank.” 2008a. Bank Information Center.
“New irrigation project in Egypt’s West Delta raises critical questions about the World Bank’s priorities in reducing poverty.” 2008b. Bank Information Center.
Rumansara, Augustinus. “Indonesia: The struggleof the peopel of Kedung Ombo.” Fox, Jonathan A. and L. Dave Brown. The Struggle for Accountability. Hong Kong: MIT Press, 1998. 123-150.
World Bank. “Kedung Ombo Multipurpose Dam and Irrigation Project.” 2008. The World bank.
“Paraguay Reform Project for the Water and Telecommunications Sector (Loan No. 3482-PA) and Argentina-SEGBA V Power Distribution Project (Loan No. 2854-AR).” 2004. The World Bank.
World Bank Launches Workshops Around Laos Dam Project. 2004.
The present paper is aimed at describing the notion of good governance and the role of the World Bank in its promotion. The paper works to determine the issues that are related to the concept and demonstrates the intricate relationship that the World Bank, donors, and recipients create as the idea of good governance is being promoted for the sake of the improvement of the quality of life worldwide.
Definitions and Key Concept
Good Governance
The governance as such is defined by the World Bank (2013) as “the rule of the rulers, typically within a given set of rules” (para. 1). The mechanisms that provide the rulers with the power and govern the process of the creation, modification, and enforcement of the rules are the specific processes of governance. According to the World Bank (2013), the definition of the “good governance” (GG) is difficult to produce since the criteria for the positive appraisal of the governance vary all over the world.
However, the basic notions that are connected to it include the democratic possibility of participation of the people, transparency and accountability of the governance, “the rule of law” and “efficient public services” (Kjaer 2004, p. 173; World Bank 2013, para. 2). The UN (n.d.) also mentions these aspects and implies that other characteristics, including the notions of consensus orientation, responsiveness, effectiveness and efficiency, and equitability, are beneficial for GG. In contrast, bad governance is concerned with common issues like corruption and nepotism that cause ineffectiveness of governance (Richardson & Cashmore 2011).
The World Bank and GG
The World Bank (2016b) was established in 1944 to deal with the issue of European reconstruction (Drake et al. 2001). However, nowadays it is a “unique partnership to reduce poverty and support development” that consists of five organisations, including The International Bank for Reconstruction and Development, The International Development Association, The International Finance Corporation, The Multilateral Investment Guarantee Agency, and The International Centre for Settlement of Investment Disputes (para. 4-5).
As a result, the goals of the World Bank (2016b) include the elimination of extreme poverty and promotion of shared prosperity, which is achieved through the participation in a number of projects, that involve “low-interest loans, zero to low-interest credits, and grants to developing countries” (para. 6). Apart from that, the support of the World Bank can be provided in the form of knowledge sharing: for example, the popularization of research and analysis or policy, technical, or investment advice. The aim of the World Bank is the prosperity of humanity and the improvement of the quality of life worldwide.
The World Bank is one of the institutions that have influenced the development of the GG concept immensely (Gallagher 2014). A 1989 report by the organisation introduced the term of governance and focused on the issues related to it, including corruption and “bad policies” (Kjaer 2004, p. 173). According to Drake et al. (2001, p. 7), the key reason for this report consists in the fact that the loans provided to developing countries had been used ineffectively, and this issue was attributed to bad government. To ensure effective use of aid, the World Bank sought to spread GG (Nanda, 2006).
Elements of GG
The World Bank’s development of GG in participant countries is aimed at the creation of a “relationship between the state, the market, and civil society” that would enable the governance to exhibit a number of qualities that are associated with GG (Drake et al. 2001, p. 2). Kjaer (2004, p. 173) defines four key sectors of GG, and they have been adopted as the policy guidelines for the recipient countries by the Bank.
Thus, the public sector management “entails civil service reform and privatization initiatives.” It is a very vast phenomenon that includes, for example, public spending, institutional effectiveness, public services and their effectiveness, and so on (The World Bank 1991). Another sector is accountability that presupposes the creation and empowerment of the monitoring institutions to “hold the government accountable” (Kjaer, 2004, p. 173).
The governments, as well as other governance actors, must be accountable to the stakeholders, that is, everyone who is going to be affected by their actions (Howlett, Ramesh & Pearl, 2009; UN n.d.). A related sector is the “transparency and information” that is aimed at supporting the process of making information public, for example, by publishing the budget or supporting free media. This aspect of GG ensures that stakeholders will have the information concerning the GG actions that are of consequence to them (UN n.d.).
The final sector was defined as the construction of the legal framework for development, and it involves the creation and enforcement of rules that “can make a market work” (Kjaer, 2004, p. 173). This sector will be described in detail in the following case study.
Case study: World Bank’s Legal and Judicial Reform
The importance of the rule of law cannot be denied, and the legal and judicial reform is one of the key aspects of the World Bank’s GG (Santiso 2001, p. 17) that is especially important for the “fresh” democracies (Laver, 2011, p. 183). The reform was primarily aimed at the development of sound institutions (noncorrupted and adhering to the law), the social development (including equality promotion and poverty elimination) and economic development that would be expected to logically occur due to the stability, predictability and other positive circumstances that should be created with the help of such a reform (Drake et al. 2001).
The initial attempts at carrying out a similar initiative were made by USAID, and they have not always been successful, providing the major lesson of the problematics of exporting a judicial system. However, the World Bank has taken up the similar agenda of promoting legal reforms with the help of lending activities and those aimed specifically at legal projects where it would act as an advisor and supporter (Drake et al. 2001; The World Bank 2016a).
The results of such project for every country are provided at the organisation’s website (The World Bank 2016a). As for their successfulness, its level varies across projects, but in general, it has been noted that the reform is capable of increasing the independence of judicial system (Helmke & McLean 2013).
Corruption and Anti-Corruption Measures Employed by the World Bank
There is not doubt that corruption (“the abuse of public office for private gain”) hinders political, economic, and social development, and this fact is approved by the modern researchers and policymakers (Drake et al. 2001). The donors have accepted anti-corruption laws, and the Bank was convinced to bring the idea into the recipient countries (Drake et al. 2001).
To address the issue of corruption, the Bank calls for improved accountability and transparency legislation, strengthens the partnership with other anti-corruption organisations (including, for example, developmental banks of USAID) and employs a number of anti-corruption techniques, the overview of which the World Bank (2007) provides. For example, at the project level, the prevention of corruption is carried out at the stage of selecting and designing it: the Bank analyses its potential susceptibility to corruption and can refuse to carry it out in case the susceptibility is high.
When the project is being carried out, disclosure, communication, and monitoring are used to ensure the lack of corruption. The Bank also expects the governments to assist in the process and works to develop the communication between anti-corruption institutions and itself. For “high-risk” cases, special, customised anticorruption plans are developed, and teams and advisors are provided (The World Bank 2007, p. 27).
The World Bank has had the unique opportunity of studying the process of GG development all over the world (The World Bank 1997). It is noteworthy, however, that when promoting GG, the World Bank encountered accusations of failing to correspond to it in its own organisation (Woods 2001). The World Bank is supposed to be accountable to its shareholders, and the shareholders (members) also have a significant impact on the organisation’s policy (Kjaer 2004).
Kjaer (2004) discusses the fact that the US is the largest stakeholder, but insists that the multilateral nature of the World Bank improves its capability of responding to global needs, which is at least partially affected by legitimacy: acceptance all over the world. However, Woods (2001) insists that the representativeness of the World Bank requires improvement as well as their accountability.
Similarly, Kjaer (2004) mentions the case of Joseph Stiglitz (1999) whose report on the actions of IMF appeared “unpleasant,” which led to the World Bank choosing to modify it. It can be concluded that the World Bank is, in fact, susceptible to corruption as any other organisation; it needs to work to ensure that it remains accountable and keeps its actions transparent to avoid discrediting itself and follow its own GG guidelines.
Pro-Market Government Policies as a Part of the World Bank’s Strategy for Good Governance
The view of the World Bank with respect to pro-market governance is concerned with the promotion of open, liberalized market (to foster competition), avoidance of price distortions, and maintaining macroeconomic stability, all of which is expected to nourish economic development (Drake et al. 2001, p. 16). The issues of these changes include the reducing accountability and prematurity of such reforms; apart from that, they are unlikely to deal with inequality (Drake et al. 2001). To help developing countries achieve these results, the guidelines of the World Bank include, for example, the strengthening of the financial sector and privatisation (Drake et al. 2001, p. 17). Unfortunately, the experience of privatisation is not always positive for recipient countries.
Case Study: Privatisation
A case study of “loans-for-shares” scheme in Russia is going to be used here to explore the complex issue of privatisation and provide an insight into the phenomenon. Case studies are most suitable for the analysis of complex and controversial phenomena (Yin 1994; Zainal 2007).
Stiglitz (1999, p. 133) defines the case of “loans-for-shares” privatization in 1995-1996 as “notorious,” and this designation is justified. Carried out for political (to gain the support of businesses) and economical (to provide for the budget deficit) reasons (Treisman 2010), the program consisted of the government borrowing money from commercial banks and making the shares in state enterprises the collateral.
This activity was a part of privatisation in Russia that had been arguably successful in rendering governmental enterprises private until this project was carried out (Chang 2006). It has resulted in Russia’s major companies being privatised the businessmen with right connections at a discount price (Treisman 2010). It is also noteworthy that these businessmen were also taking part in the development of the project, which further explains the reasons for this outcome (Chang 2006). As a result, while Russia has managed to privatize much of the industry and natural resources, its economic development went backward rather than boosted, and the inequality in the country continued to rise (Stiglitz 1999).
Privatization needs to be carried out in suitable environment wth strong institutions, low level of corruption, transparency and accountability (Drake et al. 2001). Stiglitz (1999) points out the low level of transparency and high corruption as the reasons for the failure of Russian initiative, which demonstrates that World Bank’s GG may indeed be premature or incompatible with certain cases.
Institutional and Project Reforms
Other issues that were encountered by the World Bank included the problem of the difficulty of supporting specific projects and institutional reforms (Kjaer 2004). In other words, while institutional reforms were easy to promote, they are difficult to measure and control. On the other hand, separate projects often prove to be even more complicated from the point of view of monitoring. These issues made the World Bank question a number of its ideas, including that of avoiding politics.
Economics and Politics
The World Bank has intended to limit ts activities to outside politics as had been stated, for example, in its 1997 report (The World Bank 1997). As it became more and more politically and socially involved, the Worldwide Governance Indicators were allegedly supposed to depoliticise the process (Erkkilä & Piironen 2014). However, as had been rightfully noted by a number of researchers (Drake et al. 2001; Kjaer 2004; Krever 2011; Santiso 2001), the activities that the World Bank undertakes to promote GG are difficult to be carried out without interference with the political system.
In particular, the privatisation means the loss of income source for governments, the reorganisation of the civil service leads to layoffs and the loss of power by certain political actors (Kjaer 2004). The World Bank is convinced that the government needs to play a part in the development of the market and society, which means that the businesses and the community also become affected in a way that may not be welcome (Drake et al. 2001).
The attempts at fostering GG remind one of the intricate relationships between the international, national, and local actors. Apart from that, all these aspects (together with the nature of GG) make the GG initiatives of the World Bank more political than economic since the distribution of power and resources is related to politics rather than economics. Also, the World Bank had never denied that the regime is a very important part of GG (The World Bank 1997).
The push towards including the promotion of human rights and democracy in the agenda makes the World Bank exert pressure on recipients with respect to their political regimes as well (Kjaer 2004, p. 179). Finally, it is noteworthy that the study of GG was also concerned primarily with political research, and in this respect, GG contributed to the investigation and subsequent development of the understanding of international factors in domestic policy-making (Kjaer 2004, p. 174-174). To sum up, it is questionable that the World Bank can avoid politics.
Exporting Western Systems
The fact that the World Bank is acting as a political actor brings about the issue of “exporting” Western ideas concerning GG. This notion has been criticised. For example, the case of USAID political reforms in recipient countries proved to be unsuccessful (Kjaer 2004). Toope (2003) warns about the dangers of exporting judicial system pointing out hat it may be “inimical” to the society of recipient country. In general, it is strongly suggested that Western Systems are not “exported” but adjusted to fit the recipient country and its culture (Nanda 2006).
Conditionality and Aid Effectiveness
A report of the World Bank in 1998 demonstrated that the effectiveness of aid increased in “good policy environment” (Kjaer 2004, p. 175). It was not surprising: the level of corruption in organisations and government prevented resources from just and logical distribution, ensuring that they were used to foster inequality rather than combat it (Drake et al. 2001). Similarly, GG is associated with transparency and stability, all of which allow reasonable and just distribution and consistent economic development (Drake et al. 2001, p. 9).
Currently, the World Bank donor use selective aid allocation: more aid is provided to the countries that perform better int he terms of GG (Riegner 2016). The Worldwide Governance Indicators are used to assess his performance (Erkkilä & Piironen 2014). This decision has been criticised due to the fact that it leads to cutting the aid for the countries that need it the most.
The Way Forward?
Santiso (2001) criticises the World Bank’s intention to steer clear of political issues and provides evidence to the idea that GG is necessarily democratic. Therefore, the author insists, the World Bank cannot avoid getting involved in politics; otherwise, the results of its actions will not be noticeable of consists. He proposes merging the notions of GG and democracy and insists that providing aid selectively, in exchange for the promise of taking certain political actions is not effective.
Instead, the author proposes “a more radical approach” is chosen that allows donors to “cede control to the recipient country, within the framework of agreed-upon objectives” (Santiso 2001, p. 4). According to Santiso (2001, p. 19) “genuine development partnerships” are more likely to lead to the effective aid distribution. In the cases when there is a danger of aid misuse (for example, the issue of lack of democracy), it must be suspended.
Another similar suggestion of future development was offered by Nanda (2006). The author is exceptionally concerned with the fact that GG remains somewhat undefined term, and the measures of a country’s success in achieving it are even more unclear. Nowadays, frameworks for such assessment exist, but they remain questionable and are subjected to criticism (Riegner 2016). Similarly, Nanda (2006) indicates that the aid conditionality proved ineffective in the actual change of policy (rather than the nominal one). The author also points out the need for the partnership with the recipient government and insists that it needs to be provided with the greater freedom to ensure that the context of the country (cultural, historical) are taken into account when creating the custom variant of GG in it.
To sum up, both critics are opposed to the way the World Bank donors tend to limit the freedom of recipient governments (Lie 2015), arguing that greater freedom would allow them to form a more trustful partnership and that the government is more knowledgeable with respect to the country’s needs.
The UN Global Compact
The World Bank is not the exclusive promoter of GG. Nanda (2006). For example, UN Global Compact (2016d) that is “the world’s largest corporate sustainability initiative” aims at the promotion of GG in business. ITs mission consists in “inspiring, guiding and supporting companies” to take up GG, which involves responsible business and corporate sustainability (UN Global Compact 2016c).
The core areas of such responsibility include social, environmental, and supply chain; also, the UN Global Compact (2016b) promotes sustainable development and investment. Moreover, the UN Global Compact (2016a) works to involve corporate actors from all over the world to resolve issues like poverty, education quality, water preservation, and inequality. To sum up, the UN Global Compact promotes GG and responsibility among business actors in an attempt to improve the well-being of humanity.
Conclusion
The present paper allows an insight into the notion of GG and the World Bank’s contribution to its development and promotion. Through the activities of the World Bank, GG emerged as a clear (despite the extensiveness) term that is being promoted for the sake of fostering economic, social, and ultimately political development in the recipient countries. The notion involves many controversial issues including the aid conditionality, the problem of customizing Western types of legislation and politics, and the inevitable interference with national and local political actors.
Despite these issues, the notion itself, as well as the actions aimed at its development, are mostly justifiable. GG is aimed at promotion participative, equality-based, law-governed, poverty-free governance that will boost economic development of a recipient country. If it is modified to become less Westernised, more diverse and customised, it is likely to bring positive effects.
Reference List
Chang, D 2006, ‘The Politics of Privatization in Russia: From Mass Privatization to the Yukos Affair’, Pacific Focus, vol. 21, no. 1, pp. 201-241.
Drake, E, Malik, A, Xu, Y, Kotsioni, I, El-Habashy, R, & Misra, V 2001. Good Governance and the World Bank. Washington: World Bank. Web.
Erkkilä, T & Piironen, O 2014, ‘(De)politicizing good governance: the World Bank Institute, the OECD and the politics of governance indicators’, Innovation: The European Journal of Social Science Research, vol. 27, no. 4, pp. 344-360.
Gallagher, J 2014, ‘Chopping the world into bits: Africa, the World Bank, and the good governance norm’, International Theory, vol. 6, no. 02, pp. 332-349.
Helmke, G & McLean, E 2013, ‘Inducing independence: A strategic model of World Bank assistance and legal reform’, Conflict Management And Peace Science, vol. 31, no. 4, pp. 383-405.
Howlett, M Ramesh, M & Pearl, A 2009, Studying public policy: Policy cycles and policy subsystems, Oxford University Press, Toronto.
Kjaer, A 2004,Governance, Polity Press, Cambridge.
Krever, T 2011, ‘The legal turn in late development theory: the rule of law and the World Bank’s development model’, Harvard International Law Journal, vol. 52, no. 1, pp. 288-319.
Laver, R 2011, ‘The World Bank and Judicial Reform: Overcoming Blind Spots in the Approach to Judicial Independence’, Duke Journal of Comparative & International Law, vol. 22, pp. 183-195.
Lie, J 2015, ‘Developmentality: indirect governance in the World Bank–Uganda partnership’, Third World Quarterly, vol. 36, no. 4, pp. 723-740.
Nanda, VP 2006, ‘The “Good Governance” Concept Revisited’, The ANNALS of the American Academy of Political and Social Science, vol. 603, no. 1, pp. 269-283.
Richardson, T & Cashmore, M 2011, ‘Power, knowledge and environmental assessment: the World Bank’s pursuit of good governance’, Journal of Political Power, vol. 4, no. 1, pp. 105-125.
Riegner, M 2016, ‘Governance Indicators in the Law of Development Finance: A Legal Analysis of the World Bank’s ‘Country Policy and Institutional Assessment’, Journal Of International Economic Law, vol. 19, no. 1, pp. 1-26.
Santiso, C 2001, ‘Good Governance and Aid Effectiveness: The World Band and Conditionality’, The Georgetown Public Policy Review, vol. 7, no. 1, pp. 1-22.
Impact of information technology on the mission of the World Bank
The twenty first century has seen the revolution in business operations using information technology as the main tool. Information and communication technology has been resourceful in the improvement and enhancement of business in both the manufacturing and service sectors.
In the service sector, the banking subsector has been benefiting a lot out of the acquisition and use of information and communication technology instruments in delivering services to customers. The World Bank is one of the major beneficiaries of the use of advanced information technology systems in enhancing service delivery to customers. The World Bank Group is the large source of funding in the world. Therefore, it has wide and expansive operations that extend to the entire world.
Owing to the expansiveness of the services being offered by the World Bank, it can be deduced with no doubt that the bank has an elaborate mission. The World Bank centers on reduction of poverty around the globe by providing financial services like loans to different projects in different countries around the world. Therefore, its activities involve the sharing of information and knowledge within a wide network of employees placed in different destinations across the globe (Mcfalan & Delacey, 2003).
The decision to incorporate advanced information technology services in its operations was one of the main strategies of achieving the objectives and fulfillment of the mandates of the bank. This decision came after the assessment of the profile of the organization: its vision, mission, goals and objectives as well as the growth patterns.
This was in the year 2003 when the CEO of the bank also noted a quick pace of change in the local and foreign environment of the bank. Among the developments included the increase in sources of technical assistance, reduced backing for official aid, and the expansion of the development agenda.
This came at a time when information technology had become a useful tool instrument in disbursement of information and knowledge thence a strong basis for development (Mcfalan, & Delacey, 2003). Therefore, the World Bank adopted information technology and incorporated it into its strategies. The World Bank also considered it a source of improving the attainment of its objectives of service delivery improvement.
The use of information technology was termed as the broader mission of the bank. IT was a key driver in two major development changes that were to be implemented by the bank. These are the decentralization of operations and the enhancement of knowledge creation in the bank. Decentralization of operations of the bank was eased through the use of advanced digitalized systems. The objective of the bank in facilitating economic development in the world was greatly boosted by information technology.
It has become easy for the bank to design tools that help in speeding up collaborative efforts. This enhances a healthy working environment between employees and other work partners. Therefore, with information technology, the pace at which work is done has been speeded up. This is a positive force to the achievement of the goals and objectives that are set by the Bank (The World Bank Group, 2002).
Since the bank aims to bring down poverty in the world, cost cutting measures are important considerations in the strategic plans of the organization. With the use of information technology systems, the bank has been able to reduce the costs of service delivery. Information technology also enables the bank to create a knowledge base for the economies of different countries with ease.
This is the basis upon which the bank identifies the best modes of financing to be used in a given country or region. The bank has developed databases for countries which forms part of its major clients. Therefore, service delivery to its clients is speeded up leading to the achievement of its goals. With the aid of advanced information and communication technology services, the bank has been able to develop efficient monitoring systems.
These systems monitor the way its clients implement the projects that are financed by the bank. These monitoring systems help to keep the clients on check over the way in which they put to use the fund from the bank. It is easy to detect any anomalies in expenditure helping the bank to quickly raise alarm preventing further mal-expenditure of money meant for development (Kumar & Hillegersberg, 2008).
Governance and organizational issues facing implementation of IT at the World Bank
The implementation of information technology is an elaborate exercise which is subjective. Information technology use has its pros and cons depending on how it in implemented and can affect organizational policies. Therefore, its implementation is often prone to many internal and external issues (Kumar & Hillegersberg, 2008).
The putting to practice and continued use of information technology systems by the bank requires wide collaboration with different players. Global information and communication technology servers have to be widely consulted by the bank. All the areas that will need improvement and affected by information technology have to be assessed before the system is put in place. This has been a challenge to the bank because the formation of collaborative systems is tedious and stressful to the organization.
With a wide network of firms in different regions around the word, the adoption and utilization of information technology from similar service providers is quite challenging. This forms an area of departure for the actors in the implementation of information technology services in a harmonious and effective manner.
Kumar & Hillegersberg (2008) observed that different countries pursue different paths of economic growth and development. The development paths also keep changing with changes in strategies. These inconsistencies bring about hardship in establishing stable IT systems to monitor economic growth patterns of its members.
For information technology to be effective, governments who are the major clients of the bank have to adopt and implement e-governance. However, this is not the case as most of the poor countries are economically incapacitated thus unable to implement e-governance practices. This impeded the level at which thematic network can be kept between the banks and the clients which in this cases are governments.
Thematic networks help in easing the access to information by the bank and the assessment of information that informs financing and the provision of advice on conducting projects. This worked well for funding and improvement of the transport sector in Nigeria. The paces at which governments and other institutions implement information technology services differs thus hindering network collaboration.
While the inter-bank system is effective through the use of the global network information system architecture, the linkage of these systems to clients is important. Therefore, this leaves a gap in the total achievement of the main goals of implementing information technology by the Bank.
The World Bank systems architecture: how can the architecture be used to furthering the bank’s strategy
Between the year 1996 and the year 2002, the World Bank management intensified their effort of developing the information system architecture. This was the core part of the strategy of the bank to improve service delivery, as well as the attainment of the objectives of the organization.
The bank aimed at achieving global connectivity of its banking network. This network was to pave the way for a strong customer base from the entire areas of operation across the globe. The information technology infrastructure, which included all the desktops, laptops and their software, were standardized.
Also, the workgroup storage and the database servers were standardized. This was a precursor to the setting up of information management architecture on which web services and portal applications would be linked. The architecture was developed on a five pint framework. All the five aspects in the framework had a play in the path towards the achievement of the vision informing the IT strategy and the main mission of the bank.
According to Mcfalan & Delacey (2003) the global exchange of information was meant to enhance access to and sharing of information electronically. This would be aided by the information dissemination and information access gateway. The other aspect of information technology architecture was the integrated enterprise systems. This system has integrated systems that are fragmented and have about one hundred databases.
These systems have high speed networks with a wide coverage that works positively for a quick exchange of information. High-speed connectivity globally was helpful in decentralizing the activities of the bank as was laid down in the main strategies of the bank concerning information technology use. Enterprise computing services is the other framework of the IT architecture of the World Bank. The bank set up standardized and well integrated computing infrastructure that aided in reducing the cost of performance.
The last aspect of the architecture is the global customer support that was meant to increase the reliability of customers over the system use. Customer support operations are ever active. The system relies on satellites that are situated in different parts in the world for connectivity of its interbank networks. The system uses a single protocol stream of data that speeds up the exchange of data making the system more stable and efficiently functioning.
Forming a global communication network was the overall motive behind the setting up of the systems architecture by the bank. It enables the firm to develop other inclusive information technology services that raised the capacity and effectiveness of the organization to handle the exchange of information. Video conferencing, data exchange and voice services were grafted on the system leading accelerating the rate of discharging of services.
In the initial stages of implementation, the system was able to boost operations in more than one hundred and ten countries across the globe. The clients could easily access and share information with the bank. The continued connectivity also speeded up the work of the staffs of the bank since consultation services were speeded up. It was easy to gain access to information and process transactions through the improved tools of accessing and passing information like use of e-mails and videoconferencing among others.
The communication system between the bank and the clients has been improved by the system architecture. This eased communication has culminated into ease of business transactions between the bank and its clients. This is a right move towards achieving the vision and objectives of the World Bank. Many development projects in different regions, which form the clientele of the bank, have been initiated and implemented thanks to the systems architecture of the bank (Mcfalan, F. W & Delacey, 2003).
Coping with the information revolution – the World Bank
The acquisition and use of information technology in organizational operations is a good strategy of improving performance. This statement is boosted by the realization that information technology is considered to be a booster of service delivery and organizational performance.
The World Bank can be termed as an icon in the banking sector. This is when it comes to the use of information and communication technology for stepping up service discharge ad performance. The bank invested in the development of systems architecture. The bank has fully networked its intra and inter-banking firms in the world. The communication network has been efficient in helping the bank to gain access to clients and make transactions with them (‘Information and communication technologies’, 2002).
The digitalization of operations through networking systems has made work easier for the staffs of the organization. They can easily access information and make inferences for their customers. Their advisory capacity to projects that are being financed by the bank has also been boosted. However, the maintenance of the systems architecture that is in use by the bank is an all expensive exercise.
Some people argue that the bank can only manage to maintain the system because it does not entirely work for profit motive. Since the system was put in place, the bank has spent over four million dollars in servicing the system. This is quite expensive for an organization working for a profit motive like commercial banks. The global network system of the bank is prone to security threats that are posed to other security systems in the world.
However, through continuous servicing, the bank has been able to maintain networking systems that are continuing to act as bases of revolutionizing the exchange of knowledge. It can be said that information technology has been a key facet of performance improvement by the company (‘Information and communication technologies’, 2002).
Recommendations to the CEO of World Bank concerning information technology use
The World Bank is undoubtedly an icon in the adoption and use of information technology in its growth and service delivery improvement strategies. The bank needs to work on mechanisms of developing friendly relations with regional banking institutions like the Asian Bank and the African Union Bank among other institutions. The bank can go ahead with the developing of it networks with these institutions after developing better relations.
These institutions are more familiar with the development issues in these regions thence can help the bank in discharging its activities. The bank can easily access information from these institutions rather than directly as this leaves out some details in the funding procedures.
As the bank intends to use information technology to reach its main goal, it is supposed to enhance the institutional capacity of the countries that form its clients. The support for information systems establishment by the bank can help the institutions to interconnect with the bank and get information on better development practices and paths (Międzynarodowy Bank & Effron, 2006).
The bank should also start to venture on the means of cutting costs that accrue to the maintenance of the information technology systems. The bank needs to start thinking on implementing systems that have a high capacity and ability to do self–detection. In this case, the errors and threats can be easily detected. The connectivity between the bank and its clients will need to be improved first.
References
Information and communication technologies: A World Bank group strategy. (2002). Washington, DC: World Bank.
Kumar, K & Hillegersberg, J. (2008). Bank-in-a-box: An ICT architecture for enabling agile transformation of financial services. Managerial Finance, 34(6): 413 – 422.
Mcfalan, F. W & Delacey, B. (2003). Enabling Business Strategy with IT at the World Bank. Harvard Business School.
Międzynarodowy Bank & Effron, L. (2006). IEG review of World Bank assistance for financial sector reform. Washington: World Bank.
The World Bank Group. (2002). Information and Communication Technologies: A World Bank Group Strategy. Retrieved from web.