Bureaucratic imperatives and policy outcomes: The origins of World Bank structural adjustment lending

ABSTRACT

Although the impact of World Bank and IMF structural adjustment loans on developing country borrowers has been the subject of considerable analysis, our understanding of the origins of these operations remains poor. This article rectifies this deficiency by providing an account of the genesis of the Bank's program of structural adjustment. Drawing on documents from the Bank's archives as well as interviews with former Bank officials, the paper argues that the creation of structural adjustment lending in 1980 resulted from frustration among the Bank's senior management at the slow disbursement of the organization's regular project loans. Rather than a reaction to demands from powerful states, as many observers have assumed, structural adjustment was an internally driven response to flaws in the Bank's operations. In emphasizing the Bank's autonomy, this article supplements approaches that emphasize the importance of budget maximization and mission creep as determinants of international organization behavior.

KEYWORDS:

• International organizations
• structural adjustment
• World Bank
• International Development Association
• mission creep
• budget maximization

Notes

1. The Bank's charter mandates that ‘loans made or guaranteed by the Bank shall, except in special circumstances, be for the purpose of specific projects of reconstruction or development' (IBRD, Articles of Agreement, Article III, Section (4)(vii)). However, what constitutes these special circumstances are not defined in the Bank's Articles of Agreement.