Worldwide Locations

Worldwide Locations

Amartya Sen: A More Human Theory of Development

(Elya/Wikipedia)

(Elya/Wikipedia)

To what extent do you believe that the institutions entrusted with development—the World Bank and the IMF foremost among them—have been equal to the task? In other words, do you think that the structural conditions exist for the realization of human equality, capabilities, and freedom as you envision them?

There are three things here that I should try to make clear. One, there were some policies emanating from the Bank and from the Fund which were clearly not, at least in my judgement, ideally suited for the advancement of an agenda of human development. If one is looking for a record of impeccable correctness—or even being "roughly correct"—throughout, I do not think I am able to put the Bank and Fund in that category.

The second point to note is that institutions, like all of us individually, also go through a learning process, and the Bank and the Fund did too. Sometimes one's learning is at one's own expense (like going to a costly private school), but in contrast, the Bank and the Fund had a very expensive education the costs of which were borne mostly by others, through unnecessary or misdirected economic hardship.

To look at things more positively, a lot has indeed been learned. Also there have been changes in the leadership of these institutions. Under the direction of James Wolfensohn, the Bank has certainly taken a much more pro-human development approach. Indeed what was unthinkable many years ago has occurred with little fuss in the Bank, to wit, having a whole section dedicated to "human development." That quiet organizational change also reflects a shift in the Bank philosophy, bringing poverty removal to the centre of the stage.

There are, of course, changes in the Fund too. Camdessus and Stanley Fisher took considerable interest in what we call human development, compared with what was the case earlier, even though the nature of the Fund's work, which is more financial and less oriented to long-run development, made the exercise rather different there. In any case, the change in the Fund has not been as big as in the Bank under Wolfensohn's leadership.

The third point to make is that the Bank and Fund governing structures—fixed by its rules and protocol—are very unequal in terms of the influence of different perspectives. It reflects not only the fact that these are financial institutions, not primarily political ones, as the United Nations is. But there is something more than that in the systematic asymmetries of power of the different countries in the governance of the Bank and the Fund. The entire UN family, including the United Nations itself, came into being in the 1940s in a world that was very different. The Bank and the Fund emerged from the Bretton Woods Agreement in 1944. This was a world where more than half the countries of the world were not self-governing. This was before the independence of India and many other countries in Asia and Africa. China was independent but it was just emerging from Western dominance for a very long period, followed by Japanese conquest later. And Germany, Japan and Italy were the defeated—or about to be defeated—nations, with little say on world governance.

It was a very different world. There was not a single democratic poor country in the world. In addition, the understanding of such things as human rights was very limited. The United Nations itself played a big part in producing the Universal Declaration of Human Rights, a few years after Bretton Woods, but that entire approach was in its infancy.

Today there are NGOs which are very powerful in the world, which was not the case then at all. OXFAM was founded in 1942, but it was a small relief organization then, with little voice in world affairs. That has changed over the years, and I know—having been Honorary President of OXFAM for some years—how strong the commitment of this wonderful organization is to making the voices of the poor and the underprivileged heard. There are other organizations like that today, fighting for the underdogs of society, through work but also through advocacy, such as Amnesty International, Médecins Sans Frontières, Human Rights Watch, Save the Children, Actionaid, and so on, but in the world of the mid-1940s, they either did not exist, or had a very limited role. CARE did exist just around that time (I remember teaching in makeshift night schools in neighbouring villages in Bengal, when I was completing my own school education, using erstwhile food boxes of CARE as tables, chairs as well as blackboard stand!), but CARE was mainly a relief organization, primarily distributing food. The idea that NGOs could be vocal and influential participants in development dialogues is a much more recent one.

So in that context, the world that emerged had a tremendous concentration of power in the hands of what we may call the "establishment countries." For example, the President of the World Bank is always an American, while the President of the Fund can be an American or a European, but he or she is not going to be a Pakistani or an Ethiopian (irrespective of personal qualifications). The inequalities in the governing structure need to be re-examined, but it is unlikely that this will happen any time soon.

The United Nations itself faces a similar problem (particularly with asymmetries in the Security Council), and being a more political organization, it has undertaken attempts at re-examination (so far without much effect). I do not believe the Bank and the Fund have really considered any major reform of governing arrangements, and given the fact that these are financial institutions, they probably will not. A pity, that, but also a reasonable subject for more global public discussion.

Next: "The World Bank had not been my favorite organization."