The United States and the Politicization of the World Bank: Issues of International Law and Policy.

• Author: Mitchell, Shannon K.

First of all, this book is not a juicy, behind-the-scenes expose of politicization within the Bank. It uses publicly available evidence to study efforts to politicize the World Bank at its highest level of decision-making.

Secondly, the book is not for all economists. If you need to understand the legal aspects of coercive multilateral lending, then you will find this book helpful. It provides case studies that illustrate legal and illegal attempts at politicization. It also includes a thorough study of U. S. national legislation directed towards the World Bank. The one thing an economist will learn from this book is that, although the U. S. has a lot of discretion in giving or withholding unilateral aid, it cannot control the funds it contributes for multilateral aid, in either a legal or in a practical sense.

The author's thesis is that the executive directors of the World Bank may not legally consider political issues when casting their votes on multilateral aid. He then considers whether or not the U. S. has illegally politicized the World Bank.

Some background material on the World Bank is necessary to understand the book's contribution. The day-to-day business of the Bank is handled by its Board of Executive Directors. The five largest contributors to the Bank each appoint their own executive director, with the remaining 17 elected at large from among the other members. The votes of the executive directors are weighted by the amount of funding given by their constituents. As a result, the top five contributors together control 40 percent of the vote, with the U. S. controlling 16 percent.

The author shows that it is illegal for the executive directors of the Bank to use political motives to determine their votes. His primary piece of evidence is from Article IV, Section 10 of the Bank's Charter, which uses the phrase, "'Only economic considerations shah be relevant to their decisions. . . .'" (emphasis added by Brown). Brown relies on interpretations by the General Counsel of the Bank and other evidence to conclude that there is, indeed, a legal basis for prohibiting the executive directors from using purely political considerations in casting their votes.

In two cases the author concludes that the U. S. was successful at illegally politicizing the World Bank. The first is the case of Salvador Allende's Marxist regime in Chile between 1971 and 1973. The Allende government had expropriated American investments in copper mines without...