Bank review of the use of loan conditions takes shape

2 February 2005

At the annual meetings in October, Bank president James Wolfensohn agreed to a review of the conditions that the Bank attaches to its lending, owing to pressure from the UK government. The UK has recently revisited its own policy in this area (see Update 43). The scope of the year-long review is starting to become clearer, after a meeting in mid-December involving Jim Adams, Bank vice president for operations policy and country services, and the UK development secretary, Hilary Benn.

The Bank is planning consultations with civil society in April in Berlin, at the 2005 spring meetings in Washington in April, and in Cape Town in May during a practitioners’ forum on budget support. Separate consultations are also planned with governments. A raft of new analytic work is being planned for the review including a poverty reduction support credit retrospective, a mapping of trends in structural adjustment conditions, and a review of the content of conditionality including an appraisal of lessons from the ‘Washington consensus’.

the Bank is struggling to collaborate with the Fund

At the mid-December meeting, it became obvious that the Bank is struggling to collaborate with the Fund on its own review of conditions. In particular, no measure of aggregate conditionality – the combined impact of Bank and Fund conditions – has been developed, and there has been no monitoring of the ‘off-loading’ of Fund structural conditions onto Bank programmes. Instead, in what might be seen as putting the cart before the evaluation horse, the Fund flatly asserted that streamlining has been a success.