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Eric Toussaint, The World Bank: A Critical Primer (London: Pluto Press 2008).
In the last ten years, opposition to corporate globalization has grown from large
demonstrations against the World Trade Organization, G8 meetings and IMF/World
Bank Conferences to mass convergences intended to envision and bring about a different
world at the World Social Forum and its various regional incarnations. Eric Toussaint has
been a part of that movement and evolution, in his work as the president of CADTM (the
Committee for the Cancellation of the Third World Debt) Belgium. His The World Bank:
A Critical Primer is written from within and for that growing global social movement. He
makes an important contribution to the analysis and critique of the World Bank (WB),
and makes an effective case for radically altering it.
Toussaint begins the book with a history of the bank's founding at the Bretton
Woods conference and the evolution of its operations over time. Among the interesting
details brought to light are the negotiations over the placement of the WB (New York or
Washington?). There is much here to outrage even the most jaded of WB critics. An
outstanding example of this is the detail Toussaint provides of how the WB transferred
debts from the colonial powers that took out loans for the purpose of exploiting their
colonies to those colonies once they gained independence. The contrast he provides of the
WB's treatment of Chile under Allende and Romania under Ceaucescu is telling.
Romania was given loans after Ceaucescu distanced Romania from the Warsaw Pact after
its invasion of Czechoslovakia in 1968, while Chile was cut out of any WB programs
until after Pinochet's coup. According to legend this dichotomy brought a WB Vice
President to ask whether Allende's Chile had not been socialist enough.
He then presents a series of case studies that capture the main critiques he makes
against the bank. In the context of the WB's support for dictators he discusses Brazil,
Nicaragua and Zaire in addition to Chile and Romania. Ensuing chapters include even
more detailed evidence of the WB's support for dictators in the Philippines, Turkey, and
Indonesia. Moving on to analyze the Bank's evolving theories of development, Toussaint
contrasts the path to development espoused by WB economists with that actually
undertaken by South Korea's military dictatorships, with full, if reluctant, WB support.
This is followed by a critical review of the bank's role in the lead-up and reaction
to the Debt Crisis of the 1980s. This role can be summarized as looking the other way as
the crisis was building, and then using the crisis to impose its own orthodoxy on wayward
Mexico and many other countries. This part of the narrative will not be news to most
readers, though here too, interesting details come to light. Many of these may not be as
widely known, such as the imposed socialization of much of the private debt in many
debtor countries as part of the Structural Adjustment Program (SAP). Of course, as the
disastrous consequences of the Debt Crisis and SAPs unfolded throughout the 1980s and
1990s, criticism of and resistance to the WB and International Monetary Fund's (IMF)
policies grew around the world.
The World Bank has made gestures towards reform as a reaction to these
criticisms and Toussaint devotes some space to detailing the shortcomings of these. The
Highly Indebted Poor Countries (HIPC) initiative had been meant to fully relieve the debt
burdens of the forty poorest debtor countries, concentrated in Africa. By 2005, it had
helped eighteen countries reduce their debt in exchange for imposing the same policies
designed to privilege foreign investors at the expense of domestic taxpayers. He briefly
describes the replace for the SAP loans, the Poverty Reduction Strategy Paper, as SAPs
with civil society window-dressing. More detail here would have been worthwhile.
The final section provides both the legal justification for bringing suit against the
WB and the indictment. Toussaint lays out the legal framework under which the WB
could be sued as well as the reasons for doing so. The indictment is sweeping and well
supported by the research in the earlier sections of the book. A legal offensive is an
interesting strategy for taking on the WB, and may be feasible on the merits, but the case
isn't made how and why this strategy would be effective. Supplemental material includes
a useful fact sheet about the WB, an interview with the author taken since the original
publication, and a comprehensive glossary.
The book's greatest weakness is the translation. Overall, the translation was rather
choppy, so that in some instances a sentence says the opposite of what would have
seemed the natural meaning, or in other instances is simply factually wrong (as in the
passage that says that the U.S. Air Force mined Nicaragua's harbors, when by most
accounts the C.I.A. was responsible). This leaves the reader wondering if the argument,
in some places weak or missing pieces, is not in actuality compelling and complete in the
original. Another weakness of the book is that the argument was polemical in places
where it need not have been. The author clearly grasps the details of the topics, but in
some instances ends the discussion with a bald assertion, rather than by marshaling the
evidence he clearly has at hand. Finally, there is a way in which Toussaint wants to have
it both ways. On the one hand, the WB, when it gets involved with a country, is a force
for U.S. and, more generally Northern economic interests at the expense of the interests
of the people of the country in question. On the other hand, the WB discriminates against
countries that are opposed to the political and economic agenda of the United States. For
the latter argument to hold any weight in light of the proof provided for the former,
Toussaint needs to provide some context in which the World Bank's involvement has
positive effects, otherwise, shouldn't we be happy for those countries that 'suffer' from the
WB's benign neglect? Toussaint may well be able to make this argument, but it is left out
of the book.
Overall, this book provides an excellent review of the Bank and its associated
agencies in the broader context of the evolution of the Bretton Woods institutions, the
United Nations and the international economy. It also lays out a comprehensive
institutional history of the World Bank, drawing heavily on World Bank sources as well
as critical studies of its operations. This is a well-researched book that includes such a
wealth of information and detail that even those who are relatively well-informed of the
Bank's operations will find some new information here. It will serve as a useful source of
information for activists struggling to reform or replace the international financial
institutions and will be a valuable guide for those who wish to pursue a legal strategy.
Thomas Masterson
Research Scholar
Levy Economics Institute of Bard College
