Equity and development

NEERAJ KAUSHAL
Economic Times

TUESDAY, SEPTEMBER 27, 2005

Sixty-one years after its birth, the World Bank has at last paid its due to equality. In the 2006 World Development Report, the Bank finally concedes that reducing inequality is “necessary for greater economic prosperity in the long term.” From “Plan to Market” in 1996 to “Equity and Development” in 2006, the World Development Report (WDR) has come a long way.

• Does this mean the Bank will impose “conditionalities” such as a more equal distribution of income or equal opportunities for education and employment to the next recipient of its loans?
• Will countries be asked to provide equal opportunities even if that means a slightly higher fiscal deficit?
• Will governments be asked to spend a minimum proportion of budget on health and education?
• Will the Bank change loan “conditionalities” so that poor countries attain UN millennium goals to reduce poverty, bring gender equality, improve mother and child health?
• For the sake of equality, will Bank president Paul Wolfowitz ask his former boss George Bush to increase America’s aid to poor countries?

With more than a modicum of certainty we can say that none of this will happen. For the WDR 2006 represents the thinking of Bank staff, and not the thinking of the countries that run the Bank.