Re:Up to $41B in World Bank climate finance unaccounted for,...
by nradov on Sunday October 27, 2024 @05:52PM
(#41965986)
How exactly could we even "leave them the hell alone"? Developing countries are integrated into the world economy and financial system. Other countries trade with them. If they want to issue sovereign debt then someone will buy it, if not the World Bank then the Chinese government or random private investors. The World Bank isn't perfect but they're at least somewhat helpful with improving governance standards and avoiding the most egregious forms of corruption.
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Re:Up to $41B in World Bank climate finance unaccounted for,...
by tomatocracy on Monday October 28, 2024 @08:03AM
(#41970230)
I mean, yes and no. The World Bank (and other multilaterals) are supposed to provide or facilitate loans which the private sector would not otherwise advance (or provide them on concessionary terms which the private sector otherwise would not offer). Absent this form of lending, countries have a stronger financial incentive to improve their governance to the point where they can borrow on better terms on the open market. This is how bond markets operate in developed markets - hence why eg Italy pays more to borrow money than Germany (despite both being in the Eurozone).
Most people would probably agree that the reduction in those basic financial pressures to reform is more than offset by the more formal governance requirements which are (sometimes) attached to the granting of multilateral loans (and the types of governance the private sector cares about don't necessarily always align with what the World Bank cares about). But it's not automatic, especially given "improving governance" isn't the main reason the multilaterals make loans in the first place.