Postscript to The Normativity of Numbers: World Bank and IMF Conditionality

International development has been undergoing dramatic changes in recent years. The economic expansion of countries such as India, China, and Brazil, as well as the exploitation of new oil deposits and valuable mineral resources in many parts of Africa, have been transforming the political topography of development aid. As a consequence, governments of oil-rich countries such as Angola and Nigeria have gained more confidence in their dealings with donor agencies and former colonial masters.

The World Bank and the International Monetary Fund have not remained unaffected by these shifts. Increasingly, they are competing with other lenders from the so-called newly industrialized countries in Latin America and Asia. The increased competition in the aid market, which had been dominated by the once all-powerful Bretton Woods institution, has had an impact on the technology linking loans and specific policy reforms. Conditionality, this complex legal instrument that paradoxically reconciles the idea of national sovereignty with the exercise of far-reaching influence on the domestic affairs of developing countries, is no longer the self-imposed stick to the carrot of Western aid. Lenders from other countries, most notably China, seem less obsessed with good governance, labor standards, environmental protection, and transparency and are often the lender of first choice for many a government in Africa and elsewhere.

And yet my analysis of conditionality and good governance in Malawi is more than a piece of historical documentation. It still speaks to current trends in development. First, only a handful of countries have been able to convert their wealth in natural resources into real leverage internationally. Malawi, the subject of my article, is an interesting case because there might be substantial oil reserves in the country that could fundamentally change the status of a country that has had very limited natural resources. But, at least for the moment, national politics and economic policies continue to be dominated by the international donors’ advice. It should also be noted that not all countries have resources that are in high demand. Prices and demand also fluctuate considerably, with the exception of oil, which has empowered at least the political and economic elites in countries such as Angola.

This means that in many countries the Western donor agencies and the international financial institutions will continue to play an important role but they will be competing with other lenders with different values and policies who might not put as much emphasis on transparency, good governance and human rights. As a result, the Bretton Woods institutions will have to take borrowing governments’ concerns more seriously than in the past. Conditionality will not hinder this increased flexibility. It can easily be adapted to the changed circumstances. My 2008 article shows that the shift from hard to soft conditionality occurred already at the turn of the 21st century. The current more sophisticated and flexible instruments are much more suited to produce the desired effects without imposing rigid standards.

My analysis of conditionality also highlights the need to exercise caution with regard to claims to transparency. It shows that conditionality produces a sovereignty effect whilst ensuring that developing countries’ economies can be governed or at least influenced at a distance. In this sense, my analysis illustrated how transparency in development policies actually obscures the operation of power.[1] This distrust should extend to the juxtaposition of supposedly transparent Western development projects and the apparently inscrutable Chinese exploitation of Africa’s mineral wealth. What would be needed is a study of Chinese conditionality, which might come in a different guise than the one employed by the international financial institutions. Both are likely to uphold the principle of state sovereignty.

Gerhard Anders is the author of In the Shadow of Good Governance: An Ethnography of Civil Service Reform in Africa (Brill, 2010).