[stop-imf] World Bank Presses Inquiry on Economist Who Dissents (fwd)

[Robert Weissman]

New York Tims September 7, 2001
World Bank Presses Inquiry on Economist Who Dissents
By JOSEPH KAHN

WASHINGTON, Sept. 6 =97 The World Bank is conducting a disciplinary
investigation of one of its highest-ranking economists, who sharply
criticized the bank's record on fighting poverty in a recent book and
newspaper opinion article.

The economist, William Easterly, came under  investigation by the bank's
office of business ethics
 and integrity after he wrote an article in The Financial Times that
summarized views expressed
in his book, several bank officials said. They said the inquiry, which
has not yet concluded, was started because Mr. Easterly did not receive
the required permission to write an article in a general-interest
publication.

In the article and the book, Mr. Easterly harshly assessed the bank's
half-century history of fighting poverty,
arguing that it has pursued a long list of failed elixirs and
systematically ignored the poor results of its
programs.

He said the bank should encourage countries to adopt traditional
free-market policies and stop lending to
corrupt and incompetent governments.

The investigation of Mr. Easterly, which a bank spokeswoman described as
a routine enforcement of the
World Bank's media and communications policies, is being conducted at a
time when its president, James D.Wolfensohn, has come under attack from
numerous critics.

Right-wing economists say he has led the bank far astray of its
traditional  mission to enhance economic growth around the world, while
those on the left say the bank under his leadership remains a top- down
institution that does too little to respond to the needs of the poor.
Critics have also put  pressure on Mr. Wolfensohn to forgive more third
world debt.

Several bank officials said that Mr. Easterly's case is one of several
recent examples of how Mr. Wolfensohn has sought to assert more control
over a raging debate within the bank as he battles outside critics.

The timing of the dispute is particularly sensitive because thousands
of  protesters are expected to gather in Washington later this month at
the annual meetings of the bank and the International Monetary Fund to
oppose the way the lending institutions do business.

Some protesters argue that the bank and the I.M.F. have failed to
alleviate  =97 and may have worsened =97 poverty in developing countries.
Environmental, human rights and social activist groups have also sought
to
force the bank, which is controlled by member governments, to disclose
more documents and allow the public to express views about policies
before   they become final.

 Separately, President Bush and his top advisers have pressed the bank
to  rethink its antipoverty strategy. Mr. Bush proposed replacing as
much as half of the bank's loans to developing countries with outright
grants, a change that the World Bank leadership has resisted.

Two influential opinion journals, Foreign Affairs and Foreign Policy,
have lengthy articles in their most recent issues that question the
direction Mr. Wolfensohn has taken the bank.

 Although many of its critics have conflicting views about what is wrong
with the bank and what should be done to fix it, the flurry of internal
dissent and outside attacks have sapped morale and created a sense of
crisis, several  people who work there say.

One close supporter of Mr. Wolfensohn said the bank was "under attack by
the forces of reaction," who are trying to undo the changes Mr.
Wolfensohn  has brought since he took office six years ago.

Mr. Easterly's views are among the most pointed. As a senior adviser in
the  bank's research group, he has helped shape antipoverty strategy for
16  years.

 In his recent book, entitled "The Elusive Quest for Growth," Mr.
Easterly argues that the World Bank has systematically failed to raise
growth rates in  the countries it seeks to help. He wrote that two
generations of bank leaders have been deluded by supposed panaceas for
growth, like increasing business investment, improving education,
limiting population growth,  changing government policies and forgiving
past loans, all of which ultimately failed to raise growth rates.

The developing world, including Africa, Latin America, South Asia, East
Asia outside Japan and former
Communist nations in Europe, grew at an average annual rate per capita
of 0.1 percent from 1980 to 2000,
 according to the bank's statistics. East Asian nations grew relatively
quickly, but in the other regions, living
 standards declined.

 "Consider the facts and it soon becomes evident," Mr. Easterly wrote in
the op-ed page article, "that the $1
 trillion spent on aid since the 1960's, with the efforts of advisers,
and foreign aid givers, have failed to attain
 the desired results."

He proposed that the bank instead focus on creating incentives for poor
countries to adopt free-market
 policies, largely by halting loans to nations that do not manage their
economies effectively and increasing loans to those that do.

 Mr. Easterly declined to comment on his views or the bank's
investigation.

The agency's chief spokeswoman, Caroline Anstey, said it supports Mr.
Easterly's right to publish his book.
She said the inquiry into his newspaper article followed standard
practice, and was not intended to suppress
 dissent.

 "This isn't about academic freedom," Ms. Anstey said. "Our guidelines
state simply that staff need to inform
 their managers of contacts with the press, preferably before an
interview, but if not, afterward."

 She said the inquiry involving Mr. Easterly had not concluded, so it
was unclear if he would be disciplined.

 Several other people who work at the bank say its top officials have
recently taken a hard line on employees who violate guidelines for
communicating with the press.

In one recent case, Robert Wade, a professor at the London School of
Economics who has served as a paid consultant to the bank, was cited for
violating disclosure policies when he wrote an opinion piece supportive
of a bank lending program in China that was canceled under pressure from
outside critics.

 "They are going to be tough on anyone who says anything that has not
already been vetted," Mr. Wade said.