The Globalizers: The IMF, the World Bank, and Their Borrowers, by Ngaire Woods. Ithaca and London: Cornell University Press, 2006; pp. 253. £9.50 (pb). ISBN 978080147420-0.
Woods has produced an outstanding explanation of the origins, development and growth of the International Financial Institutions (IFIs). The text is thorough, thoughtful, articulate, dense and balanced. She indicates that these organisations (together with aid and global firms) are the face of globalisation in the Third World. She presents a synthetic work – this is not meant to belittle the account, because she employs a remarkable 23-page bibliography. These analyses index a vital understanding of the extant publications on the IFIs and their commentators; all this has been augmented by some 22 interviews.
Woods is an Oxford Fellow and Economist. Her book begins on a critical note by indicating that these IFIs have received fault-finding comment from both the left and right as they have been at the forefront of the integration of the world into a single economy. The operations of these organisations are somewhat complex in that they are influenced by powerful governments, their own bureaucracy of mainly professional economists, and their relationships with borrowing governments. As she indicates: ‘This book is about the relationship between political power, economists, and borrowing governments in the work of the IMF and the World Bank … The greatest success … has been as globalizers’ (p. 2). The tools have been trade, money, investment and capital. Here, she examines their creation and evolution; their definition of missions; how they interact with borrowing countries; and their actions are interpreted in great detail with the concrete examples of Mexico and Russia.
She recounts their funding, the historical evolution, the influence of the US, the pressures of the Cold War and their tools. The debt crisis is explained, as is the rise of the Washington Consensus and structural adjustment. As the book recounts the complex interventions in Mexico and Russia, the hidden messages are the massive set of publications of these organisations and the influence of their vocabulary.
However, although the book is excellent at what it does, a scholar of Africa will be extremely disquieted. The clue to this is in the title ‘Globalizers’ and in the chapter ‘Mission Unaccomplished in Africa’. What is actually taking place in Africa is the other side of the coin – the incorporation of Africa, with profound and negative consequences for its countries, regions and people. Accompanying this globalisation is the unalterable mindset of the IFIs, the author and much of the referenced literature: neo-liberalism (there are some critics cited, but where are writers such as Susan George and Colin Leys?).
Woods does address the negative effects of the IFIs, but only in a partial sense; the thrust of the text is from the position of the IFIs (although she addresses conditionality and the Washington Consensus). Most of the publications referenced are from the IFIs or those of the same mindset (for example, only one ROAPE article is noted). The Bank and Fund champion the market, a subservient and weakened state, and privatisation; Africa needs to be lifted out of poverty, experience economic growth, and have development occur; they say this, but their programmes lead to devastation (from SAPs to HIPCs)! The IFIs treat only with countries; but what of the AU (continent) or ECOWAS (regions) or African citizens whose world has fallen apart with SAPs?
I have a great difficulty in separating my concern with the IFIs and Woods' text, but it is because Woods views these agencies as bringing the ‘correct’ economics into a part of the world where economics blends with politics and culture in a ‘holistic union’. To underline my concern is the issue of currency devaluation (one of the conditionalities of most IFI programmes) about which the text is silent. Such devaluation may be ‘correct’ to economists in righting these African economies, but the resulting price increases are destroying the lives of Africa's citizens.
The great disappointments are the chapters 6 and 7. In chapter 6, ‘Mission Unaccomplished in Africa’, she indicates that the programmes of the IFIs in Africa with conditionality, the weakening of the state and privatisation have been failures, that the continent continues to wallow in debt, and that most states are kleptocratic. Rather than debate a solution to the debt crises, in much of the chapter the history of the IFIs in Africa is recounted, with national illustrations. There is some critical comment on the negative effects, but it is buried in the voluminous detail. As she indicates: ‘In practice, there was little modification to the overall approach of the Fund and Bank’ (p.150). Programmes were rendered more humane with ‘participation’, ‘ownership’, and the HIPC programme, but the mindset of neo-liberalism remains unchanged.
The reader hopes that the answer resides in chapter 7: ‘Reforming the IMF and World Bank’; after all there is a great need for a ‘global development agency’ to foster development, relieve debt and return Africa to the world economy. Instead, the difficulties facing these organisations are recounted, and the solution is more of the same (but with better implementation and soothing rhetoric this time). We learn of the funding crisis, and the solution is internal reform of these organisations – but there is no mention of addressing Africa's crises.
Woods' text is put aside with mixed feelings. On a positive note, if the reader's quest is to understand the inner workings and histories of the World Bank and IMF, this is a well-written and thorough account. However, it offers no solution to Africa's economic crisis except more of the same but with a soothing vocabulary!