This is because their governance structure severely biases them towards the interests of the rich countries. Their decisions are made basically according to the share capital that a country has (in other words, they have a one-dollar-one-vote system). This means that the rich countries, which collectively control 60% of the voting shares, have an absolute control over their policies, while the US has a de facto veto in relation to decisions in the 18 most important areas.
One result of this governance structure is that the World Bank and the I M F have imposed on developing countries standard policy packages that are con- sidered to be universally valid by the rich countries, rather than policies that are carefully designed for each particular developing country—predictably pro- ducing poor results as a consequence. Another result is that, even when their policies may be appropriate, they have often failed because they are resisted by the locals as impositions from outside.
In response to mounting criticisms, the World Bank and the I M F have re- cently reacted in a number of ways. On the one hand, there have been some window-dressing moves. Thus the I M F now calls the Structural Adjustment Pro- gramme the Poverty Reduction and Growth Facility Programme, in order to show that it cares about poverty issues, though the contents of the programme have hardly changed from before. On the other hand, there have been some genuine efforts to open dialogues with a wider constituency, especially the World Bank’s engagement with N G O s (non-governmental organizations). But the impacts of such consultation are at best marginal. Moreover, when increasing numbers of N G O s in developing countries are indirectly funded by the World Bank, the value of such an exercise is becoming more doubtful.
The I M F and the World Bank have also tried to increase the ‘local ownership’ of their programmes by involving local people in their design. However, this has borne few fruits. Many developing countries lack the intellectual resources to argue against powerful international organizations with an army of highly trained economists and a lot of financial clout behind them. Moreover, the World Bank and (he I M F have taken what I call the ‘Henry Ford approach to diversity’ (he once said that a customer could have a car painted ‘any colour . . . so long as it’s black’). The range of local variation in policies that they find acceptable is very narrow. Also, with the increasing tendency for developing countries to elect or appoint ex-World Bank or ex-I M F officials to key economic posts, ‘local’ solutions are increasingly resembling the solutions provided by the Bretton Woods Institutions.