World Bank: lesser of two evils?
10/1/2002 12:00:00 AM - Bruce Bartlett
When one sees two of one's enemies fighting, there is often a
temptation to cheer for both sides. But the reality is that our enemies are
seldom equal in their power or loathsomeness. In most cases, one of the two
is far more dangerous. Thus, we must choose sides and aid the lesser evil.
As they say, the enemy of my enemy is my friend. Last week, anti-globalist
demonstrators shut down much of Washington to protest the policies of the
World Bank and International Monetary Fund. As a longtime critic of both
institutions, I should be tempted to at least sympathize with the
demonstrators. But I cannot. It is not that I have changed my mind
about the Bank and the Fund. They still make a lot of mistakes, in my
opinion, such as bailing out private banks that don't deserve it, pushing
devaluations and tax increases that undermine growth, fostering dependency
on foreign aid in developing countries, propping up dictators like Robert
Mugabe of Zimbabwe, financing "white elephant" projects that foster
corruption and various other sins. However, at the end of the day,
the Bank and the Fund are rational institutions that are at least trying to
do the right thing. Where they err, it is often because the conventional
wisdom among economists in general is wrong. Also, the governments of the
major industrial countries, which control both institutions, often impose
unwise policies on them for political reasons. Consequently, the Bank and
Fund are often forced to follow policies that they know are wrong but have
no power to change.
As much as I criticize the Bank and the Fund, I should say --
more often than I do -- that they are also forces for good in the world. For
the most part, they promote market-oriented policies and provide a measure
of discipline to wayward governments that would not otherwise exist. They
have many first-rate economists who produce vast quantities of research and
data that are essential reading for anyone studying international economic
Moreover, historically, both institutions have been largely open
to their critics. Recently, for example, the World Bank allowed economist
William Easterly to write a book highly critical of its policies as part of
his regular duties. The websites of both organizations are filled with
papers and reports that are often critical of their past actions and
policies. In short, both the Bank and the Fund try as best they can to learn
from their mistakes.
The same cannot be said of the anti-globalists. They are utterly
irrational, as well as being wrong. It is a waste of time to argue with
them, because they are incapable of making or even comprehending a rational
argument. There is no research, no data, nor any academic literature
supporting their position. It is based solely on emotion. But one cannot
make policy on such a basis.
Even communism, which turned out to be a monumental disaster in
every country in which it was imposed, had a more rational basis than the
rants and tirades of the anti-globalists. At least the communists tried to
justify their policies on the basis of serious -- if deeply flawed --
argument, backed by logic and analysis. The anti-globalists don't even
bother to do as much as the communists did to support their position.
The truth is that anti-globalization is simply an umbrella under
which every nut group in America, both on the right and left, has
gravitated. Most of the protestors probably don't even care much about
international trade, the World Bank, IMF, the World Trade Organization or
any of the other things they profess to oppose. They just enjoy protesting.
It's like a reunion of all the people who used to follow the Grateful Dead
on their concert tours. Since the Dead don't tour any more, coming to
Washington to rant and rave about globalization is the next best thing.
I have no respect whatsoever for the anti-globalists. And I fear
them as nihilists, who would destroy the institutions of civilization simply
for the fun of it. Most of them probably belong in mental institutions for
their own good.
Faced with nihilists incapable of rational thought, on the one
hand, and organizations like the Bank and Fund that are attempting to make
the world a better place by utilizing the best analysis and research they
can find, my choice is clear. I have to side with the latter and oppose the
former with whatever resources are at my disposal. I will not stop
criticizing the World Bank and IMF when I think they are mistaken, but if it
comes down to them or the crazies, I have stand with the Bank and the
Fund -- and for rationality against nihilism.