SlideShare une entreprise Scribd logo
1  sur  36
Télécharger pour lire hors ligne
[PIR-30086 - Researching and Dissertation Writing in Politics and International
Relations .
Student no. 0800 2751 01]
Dissertation
The World Bank under the stewardship of Robert Strange McNamara
“A critical analysis of Robert McNamara’s stewardship of the World Bank. Can
the World Bank’s shortcomings be explained in his leadership style rather than
the organisational structure?”
Kofi Tetebo
Student Number: 0800 2751 01
4/5/2011
Dissertation submitted in partial fulfillment of the requirements for the BA
Degree in International Relations.
PIR-30086 - Researching and Dissertation Writing in Politics and International
Relations .
Student no. 0800 2751 01
Abstract
Robert Strange McNamara was the fifth World Bank president and the second longest
serving president to date. The position of president is one of the most fundamental positions
within the World Bank organisation, other than being on the executive board of directors. The
reason this position is very important is due to the fact that World Bank Presidents must
effectively coordinate policy and execute policy efficiently. Overall the structural organisation
of the World Bank does not only affect the banks performance as an international
organisation but the individual lives of peoples within the countries the Bank is trying
implement its policy is deeply affected. In this dissertation the role of McNamara’s
managerial style will be explored to determine how he influenced and shaped the role of the
World Bank. Secondly to explain and understand why the nature of poverty cannot elevated
through McNamara's lending practise, which was to increase more lending throughout the
international system. Two case studies will focus on this approach of McNamara's lending
practises towards two Latin American countries. Then conclude that that it was his leadership
at the World Bank which led him down because he could not realise the consequences of his
actions.
PIR-30086 - Researching and Dissertation Writing in Politics and International
Relations .
Student no. 0800 2751 01
The World Bank under the stewardship of Robert Strange McNamara
“A critical analysis of
Robert McNamara
stewardship of the World
Bank. Can the World
Bank’s shortcomings be
explained in his leadership
style rather than the
organisational structure?”
PIR-30086 - Researching and Dissertation Writing in Politics and International
Relations .
Student no. 0800 2751 01
Acknowledgements
I am grateful for the support and advice by my tutor Professor John Vogler. I am
indebted to his services as a student. Also Tim Doyle for making me very interested in
the developments of the Global South.
My parents, my brother and Joe Nyame for their support throughout the whole writing
process.
PIR-30086 - Researching and Dissertation Writing in Politics and International
Relations .
Student no. 0800 2751 01
Contents
Acknowledgement
1. Introduction and Literature review 1
2. Organisation of the World Bank under McNamara. 7
3. Mexico and the PIDER Program 13
4. Deforestation within Brazil 16
5. Discussion 22
6. Conclusion 25
Bibliography 28
Appendix A
Appendix B
PIR-30086 - Researching and Dissertation Writing in Politics and International
Relations .
Student no. 0800 2751 01
Page | 2
[PIR-30086 - Researching and Dissertation Writing in Politics and International
Relations .
Student no. 0800 2751 01]
Page | 1
1 Introduction and Literature Review
In order to understand that it was the continuation of leadership style by
Robert Strange McNamara from the Pentagon onto the World Bank, it is
important to comprehend the type of man he was. He was a man of great
intelligence, once described as “an IBM machine with legs” by Senator Barry
Goldwater (Halberstam 1974, p. 112-113).Is this perception of Robert
McNamara accurate? Arguably it seems to linger upon some truth about
Robert McNamara because, as man of great intelligence he could not fully
comprehend the nature of his actions and misjudgements. This can be seen
during the Vietnam War whereby by McNamara and President John Kennedy
thought it would be better to escalate the war in Vietnam rather than to
surrender. Yet even with the disasters that arose from the Vietnam War it
seems the propensity within McNamara was to reform organisations like the
Pentagon and believe it could succeed, yet in practise they failed to carry out
they main objectives efficiently; thus this continued into the World Bank.
Literature on McNamara
This literature review will consist of five main books, one of which is a
bibliographical account of McNamara and one is a historical account of
McNamara’s time in the Pentagon. By contrast, the other three are specifically
about the World Bank. This literature review will firstly began with a summary
of all the books to give an overall understanding of the two key topics: Robert
McNamara and his leadership of the World Bank. The second part of the
literature review will try to evaluate how the authors would answer the
dissertation question. Only then would the differences and similarities
between the authors’ perceptions of Robert McNamara and how he actually
ran the World Bank be understandable. The final conclusion from the literature
review is that, depending on the literature read, McNamara was admired by
those around him and those within the World Bank core and disliked a lot by
of his critics. However, there is no doubt that McNamara transformed an
institution, although even books published by World Bank Publications have
some criticism of his leadership style, like Bankers with a Mission: the
Presidents of World Banks 1946-91 (1996).
PIR-30086 - Researching and Dissertation Writing in Politics and International
Relations .
Student no. 0800 2751 01
Page | 2
David Halberstam’s book (The Best And The Brightest, 1974). This book
provides an account of the ‘whiz kids’ hired by President John Kennedy during
the 1960s, who were mostly from business management backgrounds.
Halberstam’s account of Robert McNamara describes a man who is very
intellectual but has limited social interaction skills and strives for perfection.
This can be seen on many occasions, such as when he changed official
documents to match the President’s stance on policy, and when he asked
people to write everything down because he could read faster than people
could talk to him. Halberstam would argue that the leadership of McNamara
alienated some people within the World Bank because of his perfectionist
nature and his lack of time to care about people’s feelings.
Promise and Power: The Life and Times of Robert McNamara is a
biographical account by Deborah Shapley published in 1991. Shapley’s
account of McNamara as a leader of the World Bank is overall of the same
stance as Halberstam. However, the difference between Halberstam and
Shapley’s accounts of Robert McNamara is that Halberstam’s book reflects
the anger during the period in which it was published (during the Vietnam
War), unlike Shapley’s book. Secondly, when it comes to writing style,
Shapley writing is much more fluid than Halberstam and slightly less biased.
Overall, it seems Shapley would answer the dissertation question in the same
way as Halberstam but would say it was a lack of trust that caused
McNamara’s shortcomings within the World Bank.
Robert Ayres wrote Banking on the Poor: the World Bank and World Poverty
in 1983. In this book, Ayres argued that McNamara drastically changed the
World Bank like no-one had before. Unlike many other scholars, Ayres argued
for and against McNamara’s presidency within the World Bank, highlighting
that it is a matter of perspective. Ayres argued both causes because although
McNamara had a lot of money to move around within the World Bank for the
purposes of poverty alleviation (1981, p.10), his bank staff did not fully agree
PIR-30086 - Researching and Dissertation Writing in Politics and International
Relations .
Student no. 0800 2751 01
Page | 3
with McNamara’s lending policy of loaning to Third World countries
regardless of their creditworthiness.
Bankers with a Mission: the Presidents of World Banks 1946-91 by Jochen
Kraske, et al. depicted the World Bank as an institution willing to help the
people of developing countries, yet within the book itself it does not fully
criticize the former World Bank presidents for any disasters that have arisen
from their lending policies. It cannot be said to be fully biased in nature,
although it is slightly because the book was published by World Bank
Publications. Within this book, Robert McNamara was depicted as a champion
who put poverty alleviation at the heart of international development, whereby
development loans were no longer about loaning to first world nations. Also,
because of McNamara, new types of loans meant that the World Bank could
help many people in many different ways, such as loans for educational
programmes and eradication of eye diseases. It seems the author would not
argue strongly either way for the president or for the organisational structure
as, being published by the World Bank itself, it must justify the usefulness of
the World Bank as an institution. Although the difference between Ayres and
Kraske is that Ayres said the debate could continue forever, it is in Kraske’s
personal interest to represent the World Bank in the best way.
Lastly, The World Bank: A Critical Analysis by Cheryl Payer (1982) provides a
robust critical analysis of the World Bank, unlike Bankers with a Mission or
Banking on the Poor. Throughout the section on Robert McNamara, Payer
questions the integrity of his operations, especially the loans to Brazil for
environmental development.
There is no doubt that Robert McNamara transformed the institution. However
the literature on McNamara seems biased either for or against him, however it
does seem to realise the shortcomings within his institution.
PIR-30086 - Researching and Dissertation Writing in Politics and International
Relations .
Student no. 0800 2751 01
Page | 4
Literature on Methodology
In order to approach answering this thesis, the sources chosen will mostly be
from books with some internet websites and journal articles. Although
newspapers will be included, the problem that arises is the lack of detailed
information, especially in the two case studies from newspapers. The reason
for most of the work stemming from books is because there have been many
books written on Robert McNamara and the World Bank as an institution.
Therefore, this thesis would be a continuation of those works but from a
different perspective. Hence, the first the question to be asked and answered
is: who is Robert McNamara? To begin answering this question, a
bibliographical book search would help to understand the mentality of Robert
McNamara. Only then would it be possible to evaluate the nature of Robert
McNamara. The design of the question comes down to firstly looking
analytically at the structure of the World Bank. The difficulty that then arises is
finding literature on how the structure changed under his presidency and also
how to present the change in language form, when a diagram might be best.
Nevertheless, exploring the policies that McNamara implemented throughout
his time as president will be easier because this will available be in the core
text books. Therefore, books, just like online sources or journals, have
different weighted opinions. For this reason alone, it is a matter of weighing
the arguments, although the worry is that the argument of this thesis could be
undermined by counter-arguments; hence why literature from both sides must
be found and included.
Structure of the Remainder of the Dissertation
The structure of this thesis will begin (not including the introduction and
literature review above) with the chapter titled Organisation of the World
Bank under Robert McNamara. McNamara changed the complete structure
of the World Bank when he entered office in 1968 and it is important to fully
comprehend how his “Ford leadership style” of management had an effect on
the Bank. This thesis will equally focus on a brief history of the structure of the
World Bank before McNamara. Following this, the thesis will focus on the
consequences of Robert McNamara’s reorganisation of the World Bank. At
the heart of understanding this are Max Weber (1946) and his theories of
PIR-30086 - Researching and Dissertation Writing in Politics and International
Relations .
Student no. 0800 2751 01
Page | 5
organisational structure and Stephen Robins (1990). Robins highlighted the
three components an organisation needs; the importance of these three
components relate to how effectively Robert McNamara was able to use the
components to run the World Bank. To conclude, the effects caused by the
reorganisation of the World Bank through an increase in the number of staff
will be explored, as will the consequences of the proliferation of lending
through International Development Associations (IDA). This lending influenced
the success of the World Bank, but in the long term it was devastating to the
nations it tried to help (this has been emphasised in the two case studies).
The next chapter will look at the first case study, titled Mexico and the PIDER
Programme. Within this chapter, the fundamental questions that will be asked
and answered are: why did Robert McNamara loan money to the Mexican
government? Was it to achieve his annual lending targets, to make a profit
from the loans due to the interest rate that Mexico had to pay back or was it
because he just wanted to help people? Secondly, how did McNamara
approach implementing a structure to tackle poverty within Mexico? Lastly, did
the program fail? If so, why did it fail and what does this tell us about the
World Bank under his leadership?
The following chapter (Deforestation in Brazil) will be an analysis of the
consequences of McNamara’s approach to alleviating poverty that have been
further highlighted in Mexico and the PIDER Programme. The reason for this
chapter following the chapter on Mexico and the PIDER programme is
because of the chronological order the loans were given out by the World
Bank. The consequence of this is that it becomes easier to evaluate whether
or not there have been different approaches towards development by the
World Bank. Therefore, the same questions asked regarding the PIDER
programme can be asked again for this case study and the similarities and
differences can be explained.
The discussion chapter will focus on two main themes; firstly, the differences
and similarities between the two case studies will highlight that both
approaches brought about similar consequences. Therefore, the likelihood
PIR-30086 - Researching and Dissertation Writing in Politics and International
Relations .
Student no. 0800 2751 01
Page | 6
cannot be a coincidence and only through the reorganisation of the World
Bank under McNamara did this happen. Secondly, the fact that most of the
main textbooks were published by World Bank Publications explains why
some books lack a critical analysis.
Finally, the concluding chapter evaluates everything that has been explored in
this thesis. In summary, the aims undertaken for this thesis have led me to
conclude that it was the leadership style of Robert McNamara that caused the
World Banks’ shortcomings. How this came about will be explored by re-
evaluating the main arguments throughout this thesis and reviewing the
weaknesses and case studies. It is ultimately concluded that while Robert
Strange McNamara was a man of great intellect and power, he did not realise
the consequences of his power.
PIR-30086 - Researching and Dissertation Writing in Politics and International
Relations .
Student no. 0800 2751 01
Page | 7
2 Organisation of the World Bank under McNamara
Robert McNamara completely changed the structure of the World Bank from
when he entered office in 1968 until he left office in 19811
. His objective,
throughout his tenure as president, was to eliminate global challenges. He set
about achieving this goal through a five year lending programme in order to
enable him to understand the importance of restructuring the World Bank and
the consequences it had on international development policy. This paper shall
explore the importance of an organisational structure for an institution and
also determine the models that are best suited to run an organisation, such as
the World Bank, by examining Stephen Robins’ analysis in Organisation
Theory (1990). Robins’ argument highlights the three components an
organisation needs; the importance of these three components relate to how
effectively Robert McNamara was able to use them to run the World Bank. It
is worthy of note that Robert McNamara used his ‘Ford leadership’ style of
management to run the organisation. This paper will equally focus on a brief
history of the structure of the World Bank in order to fully appreciate why and
how Robert McNamara decided to reorganise it. The conclusion of this paper
shall highlight the effects of the reorganisation of the World Bank through an
increase in staff numbers and more lending through the International
Development Association (IDA) in the short-term and how this influenced the
success of the bank. It is worth noting, however, that in the long term it
caused Third World debt to increase out of control; this will be explored later
in two case study scenarios.
An organisational structure defines how tasks are allocated and formally co-
ordinated within an organisation (Robins, 1990 p.5). According to Robins,
there are three components of an organisation: complexity, formalisation and
centralisation (1990, p.5). These ideas stem from Max Weber’s notion of
‘bureaucracy’. Weber argued that the most efficient means by which an
organisation can achieve its targets are through having: a clear division of
labour, a clear authority hierarchy, formal selection procedures and detailed
1
See Appendices A and B.
Appendix A: IBRD Organisation Chart February, 1960.
Appendix B: Organisation of the World Bank under Robert McNamara
PIR-30086 - Researching and Dissertation Writing in Politics and International
Relations .
Student no. 0800 2751 01
Page | 8
rules and regulations (Robins 1990, p.37). Models of organisational structures
are significant because to have an efficient organisation, it must have an
effective structure. The organisational structure of the World Bank is
‘bureaucratic’ as described by Max Weber, although throughout the
presidency of Robert McNamara, it was enhanced with a ‘Tayloristic’ style of
approaching development. The organisational structure of the World Bank
originally began with the International Bank of Reconstruction and
Development (IBRD) in 1944 and, throughout the history of the World Bank, it
has evolved to meet the needs and challenges of the world. Some of these
successes include the creation of the International Financial Cooperation
(IFC) and the International Development Associations (IDAs) in 1956.
Robert McNamara joined the World Bank in 1968 and before he had decided
what to do with such a large organisation as the World Bank, he had some
instinctive ideas that he felt would help a large organisation to thrive (Shapley,
1993; p.471). Shapley’s analysis of the reason why it was instinctive for
Robert McNamara to want to lead a bigger organisation is due to the fact that
Robert McNamara practised a certain business style, which he learnt from
Harvard Business School during the 1930s. This consisted of different aspects
of control: financial, management and statistical (Shapley, 1990; p.21). As a
result of this, Robert McNamara instinctively carried out this style of
leadership within two very large institutions before he joined the World Bank;
these institutions were the Ford Motor Company during the 1940s and the
Pentagon from 1961 until 1968. Arguably, with the continuation of the
management style that had brought him financial success at the Ford Motor
Company and statistical success at the Pentagon (although not with the
Vietnam War), McNamara began to reorganise the World Bank in the same
way as he had handled the two aforementioned organisations.
Aart van de Laar in The World Bank and the Poor (1980) argued negatively
against the continuation of Robert McNamara’s leadership of the World Bank
with the same people he had earlier worked with at the Pentagon: “several
Pentagon hands came to the [World] Bank with McNamara and introduced
their techniques as though the output of the organisation was comparable”
PIR-30086 - Researching and Dissertation Writing in Politics and International
Relations .
Student no. 0800 2751 01
Page | 9
(1980; pp.225-227). The justification of Aart van de Laar’s argument is due to
the running battle between those who believed that the World Bank should
concentrate on doing what it had learned to do and those who wanted it to
exercise some leadership across a wide spectrum (Mason and Asher, 1973;
p.102). Robert McNamara justified his continued leadership to the same
people who had previously worked with him in the Pentagon, with the claim
that he needed to achieve the development goals of the World Bank as had
happened to the Pentagon. McNamara’s view was that the World Bank had to
modernise and not be restricted by its biggest lenders, especially the IDA,
which was not being replenished by the United States Congress (Shapley,
1990; p.467). Thus, the bank’s evolution may be viewed as a development
that qualified it to assist in the financing of an important but limited range of
projects (Mason and Asher, 1973; p.102).
In order for the World Bank to be qualified to assist in meeting these global
challenges, there was an increase of bank staff members. The number of
professional staff increased by 125% between 1963 and 1973 and the staff as
a whole grew from 1,600 at the beginning of McNamara’s presidency to 5,700
when he left office in 1981 (Kraske, et al., 1996; p.175). The expansion of the
Bank’s staff had three consequences that affected the organisational structure
of the World Bank: firstly, there was a lack of representation by the Bank’s
professional staff; secondly, the rapid increase in staff meant that the
organisation became too large to establish and maintain informal working-
level contacts and lastly, quantity was favoured over quality (Laar, 1980;
p.222). The distribution of Bank staff is important because of the knowledge
each member staff could bring to the World Bank. For the reason that different
specialist bank staff can have greater informed knowledge on a wide range of
different countries than just a few staff members, who may be deficient in
certain banking principles, the bank staff could further contribute in diverse
ways to enhance the organisation’s understanding of the factors that help
and/or hinder the nature of poverty. The significance of this in relation to the
argument for increased staff strength, as postulated by McNamara, is that if
there was better representation of members, especially high skilled staff, there
would be less likelihood of a reduction in the performance of complex tasks.
PIR-30086 - Researching and Dissertation Writing in Politics and International
Relations .
Student no. 0800 2751 01
Page | 10
In spite of this, Escott Ried considered the reorganisation of staff to be one of
McNamara’s main failures as World Bank president. According to Ried,
McNamara failed to increase representation in the senior ranks (1973, p.809).
Ried’s argument is fundamental because one of the major criticisms of Robert
McNamara’s presidency has been the nature of quality versus quantity of
bank projects. Shapley argues in Promise and Power: The Life and Times of
Robert McNamara (1990) that Robert McNamara used scientific management
to carry out each project.
It is worth mentioning at this stage that although ‘Taylorism’ depends very
much upon each simple task being broken down into segments that can then
be analysed, the lack of specialist staff to analyse each segment undermines
the quality of the work. The process was no longer about how effective bank
projects were but rather how many projects could be carried out within the
year. This was especially the case regarding the increase in complexity of the
Bank’s tasks, which reduced the president’s ability to directly supervise all the
activities within the organisation. Thus, this makes the need for informal
working relations among people with the right expertise very vital (Robins,
1990; p.150). It is for this reason only that the first and third consequences of
the reorganisation of the World Bank by McNamara were fundamental.
What McNamara fundamentally was trying to achieve with more bank staff
was to increase lending projects throughout the world. This has been
highlighted earlier with an explanation of the significance of McNamara’s
Tayloristic style of approaching the World Bank’s challenges. Kraske, et al.
(1996) argued that the 1972 reorganisation of the World Bank was based on
lengthy analysis and planning by McKinsy and Co., whereby the
reorganisation adopted a dualistic structure and placed the responsibility for
lending in different regions in the hands of regional vice presidents (Kraske, et
al., 1996; p.176). This firstly demonstrates the issue that the Bank’s staff were
concerned about the new organisational structure; the question of quality
versus quantity arose. Due to the rapidly increasing numbers of lending
operations, McNamara emphasised that poor quality investments could not be
PIR-30086 - Researching and Dissertation Writing in Politics and International
Relations .
Student no. 0800 2751 01
Page | 11
effective for development (Kraske, et al., 1996; p.191). Nevertheless, with a
managerial structure further removed from day-to-day activities, the likelihood
of poor quality development was actually high. In this case, operational staff
felt that in the short term there was a trade-off and the pressure to proceed
with lending was superseding all activities (Kraske, et al., 1996; p.193). This
highlights the dilemma of McNamara’s management style, whereby the
challenges of communication could not be completely fulfilled within the
hierarchical system. Whereas previously the quality of lending projects
outweighed the quantity, because the bank staff size was reduced the bank
staff were required to look at every detail meticulously, even though it took
months to make a decision. The nature of meticulously planning the details of
every transaction, according to McNamara, made the bank ineffective as an
institution due to the time it took; nevertheless, McNamara’s leadership and
the notion of results led bank staff to fabricate some statistical results. This
demonstrates that rules and regulations not only define unacceptable
behaviour but also define the minimum levels of acceptable performance
(Gouldner, 1954).
Hence, Pieter Lieftinck argued that the large increase in projects and staff
based on uncertain premises was unjustified (Kraske, et al., 1996; p.175).
Lieftinck’s justification for this is due to the fact that McNamara gave Rótberg
an almost biblical instruction when he began work at the bank: “find where the
wealth exists in the world and bring it to me, that is, to my bank” (Shapley,
1993; p.472). It seems Robert McNamara’s mentality on the nature of poverty
was fixated with increasing wealth within the Bank for it to later distribute to
development projects, although the nature of poverty is much more complex
than that. This is mainly because each nation has its own exogenous and
endogenous factors that contribute to the nature of poverty and inequality.
With this in mind, it was not surprising that in 1969 Robert McNamara said:
“the IBRD is a body that makes investments whose objective is development it
is neither a philanthropic institution nor a social welfare agency” (McNamara,
1973; p.155). For this reason alone it can be argued that McNamara reformed
the World Bank as an institution for the success of the people within the World
PIR-30086 - Researching and Dissertation Writing in Politics and International
Relations .
Student no. 0800 2751 01
Page | 12
Bank and therefore the consequences of McNamara’s actions were that he
did not fundamentally help the people within the nations he was trying to help,
as quality was overlooked for quantity. It has been argued by Karl Marx and
Friedrich Engles (2009) that the capitalist system is merely exploitive,
whereby the main concern is to increase personal capital for oneself, or, in
this case, the World Bank.
The effectiveness of an organisation depends upon the organisation’s
structure, which in turn stems from effective leadership on how the
organisation should operate. It seems that the reorganisation of the World
Bank by Robert McNamara highlighted the fundamental importance of good
organisational structure. This demonstrates that Robert McNamara was
effective in helping the World Bank become an organisation that could deal
with global challenges by financially increasing the amount of money that
entered the World Bank and the amount that the World Bank lent. Robert
McNamara stated that the World Bank is not a philanthropic organisation.
There is cause for concern because it seems that the reorganisation of the
World Bank made it more effective as an organisation for managing financial
matters but not for managing development projects at a micro-level. The
reason this is of concern is due to the main purposes of the World Bank being
to try to eradicate poverty, help development in agriculture, etc. Therefore to
achieve sound investments, the quantity should not override the quality.
PIR-30086 - Researching and Dissertation Writing in Politics and International
Relations .
Student no. 0800 2751 01
Page | 13
3 Case study one: Mexico and the PIDER programme
The Progamma de Invesiones para el Desarrollo Rural (PIDER) (Programme
for Development Investments) was the beginning of Robert McNamara's new
approach to development and tackling global poverty. In order to understand
why the World Bank lent money to Mexico in 1975, the history of Mexico’s
poverty will be explored first of all, including how it encouraged the World
Bank to lend towards the PIDER programme. Ayres (1983) argued that it was
the commitment to anti-poverty that caused the World Bank to lend in this
instance. Ayres argument will be further explored to understand the second
most important question; how did the World Bank go about helping the
Mexican government implement the PIDER programme? The importance of
the approach that the World Bank took in helping to implement PIDER
programme is fundamental, as authors (such as Shapley) have accused
McNamara of having a top-down approach to development. Lastly, it will be
concluded that the learning outcome from the PIDER programme was that
better monitoring and evaluation were needed to continue the new style of
lending practises.
The PIDER programme was initiated in 1973 as a development programme
for helping small scale local areas within Mexico, although project activities
did not commence until 1975. According to Bergsman in Income Distribution
and Poverty in Mexico (1980), Mexico has one of the most unequal
distributions of income within the less developed countries (p.4). A quarter of
its people (about 21 million) have incomes below the poverty threshold
(Cernea, 1992; p.13). Therefore, in May 1975 the World Bank approved a
loan at the cost of 110 million United States dollars to the Mexican
government for the PIDER 12
rural development programme (Cernea, 1979;
p.101). Ayres argued that a country's commitment to anti-poverty encourages
the World Bank to fund its projects (1983, p.213). The reason Ayres refers to
this is because of the leadership of Robert McNamara and his commitment to
tackling global poverty, which began with his Nairobi speech in 1973.
Therefore, the approved loan from the World Bank to the Mexican government
2
There were three PIDER programmes in total.
PIR-30086 - Researching and Dissertation Writing in Politics and International
Relations .
Student no. 0800 2751 01
Page | 14
was due to McNamara's belief that he could improve the conditions of the
world through his top-down, oriented approach to development; the PIDER
programme was no expectation to this (Shapley, 1991; p.499).
The significance of Shapley's argument depends upon the correlation
between the loans McNamara gave and the top-down bureaucratic model he
used to implement development within the countries he was trying to help.
Arguably, this top-down approach was exported to the different countries that
Robert McNamara gave loans to; the significance of this is that the same
profound consequences arguably arose, even though McNamara did not
change his approach from one to another. The model used for the PIDER
programme required programme co-ordination at the centre by a special office
to integrate all the rural development sector's efforts; at a local level, there
was decentralised control so interaction between projects and research could
happen (IBRD 1975:9).
Although the number of micro-regions increased from 54 in 1974 to 131 in
1989, the model brought about some shortcomings. The first problem was that
the top-down model did not pay attention to the beneficiaries involved. The
fundamental reason for this is because it was difficult to assess the nature of
the beneficiaries in the first PIDER project; approximately 75,700 out of
215,000 families in Mexico received some type of social and economic benefit
from PIDER (Ayres 1983: 134). The significance of this is that the monitoring
and evaluation process of the PIDER programme was not completely
adequate. The issue with this is that even though the World Bank under
McNamara carried out new administrative tasks across the world, simple
processes adapted from previous experience where not implemented for
tasks such as PIDER. These practises were carried out with other projects,
like the Northwest Region Development programme (POLONOROESTE).
Although with every project there is not a realistic chance of perfection,
nevertheless in projects like PIDER and POLONOROESTE, the basics must
be implemented (such as the socio-economic factors). Furthermore, the top-
down bureaucratic structure caused rigidity within the system, whereby
genuine field work was constrained. The constraints from the rigidity of the
PIR-30086 - Researching and Dissertation Writing in Politics and International
Relations .
Student no. 0800 2751 01
Page | 15
structure are significant as they affected the achievements of the PIDER
programme.
The PIDER programme meant to implement the creation of “bottom-up” jobs
through farming, agriculture and irrigation projects because McNamara had
rejected “trickle-down” economics. The majority of the implementations did not
give great cause for concern, as the physical construction of investments was
subsequently operational and reached its expected productivity (Cernea,
1983; p.80). Nevertheless, Goulet argued in Mexico: Development Strategies
for the Future (1983) that the real concern with the PIDER programme was
the inappropriate land tenure system, as this only benefited a small number of
“wealthier” inhabitants (p. 68). Therefore, the programme did not tackle the
development of rural poor communities but benefited “wealthy” elites. James
Cockcroft argued that programmes for “investing in the poor” like PIDER are a
way of tying the urban poor into the international credit system (1983, p.232).
The importance of this arguably gives the World Bank a chance to increase its
annual lending targets towards nations like Mexico so they can further
distribute the wealth. Therefore, the consequences of this caused the second
shortcoming, as there was a concentration on achieving annual spending
targets from the World Bank and not the development of the PIDER
programme. As stated by Kapur, Lewis and Webb (1997), the World Bank
later classified the programme as unsatisfactory because of cost overruns.
Robert McNamara's commitment to tackling poverty cannot be
underestimated; however, the way in which this was approached has been
raised as an issue. It seems McNamara's desire to achieve annual spending
targets manifested itself with projects like PIDER. Nevertheless, does it matter
if McNamara concentrated on annual spending targets? Arguably no in
relation to the PIDER programme, because the main concern was the top-
down model used for development within the PIDER programme. The
consequences of the PIDER programme highlighted that the nature of the
World Bank during the 1970s was moving away from conservative lending
towards social human concerns; however, it also showed that the World Bank
needed to have better monitoring and evaluation processes to continue the
PIR-30086 - Researching and Dissertation Writing in Politics and International
Relations .
Student no. 0800 2751 01
Page | 16
new style of lending.
4 Deforestation within Brazil
In order to understand the importance of the economic and environmental
consequences that arose from lending to Brazil for the Northwest
Development program in 1981, a history of the loan will be explored to argue it
also had a political intention as well. Afterwards our attention will focus upon
the economic consequences which were put forward by Felastre, Toussaint
and George, and Sabelli. The significance of their arguments demonstrates
firstly that the World Bank through McNamara was fundamentally too
concerned about statistical analysis to realise the mounting debt crisis which
was looming at a time, when the international markets were uncertain Brazil
could pay its loans. Secondly the environmental consequences that arose
further demonstrate that the World Bank was not adequately prepared for the
Northwest Development program. Lastly conclude that the gamble for
McNamara did not reap the benefits.
As mentioned in the Organisation of the World Bank under McNamara
chapter, the reorganisation of the World Bank began in 1972, which gave a
chance for Robert McNamara to lend to new nations which the World Bank
had not previously done before, or nations that had been previously isolated
internationally. Most of these nations were isolated from the international
community by the United States, and the United States being the biggest
contributor to the World Bank, had an indirect influence on who the World
Bank gave loans to. The consequence of this was that the World Bank upheld
the notion of not leading financial assistance towards the nations. Also the
World Bank explored in new areas of development due to the reorganisation
of its structure to include new departments, such as rural development. Rural
development was a strategy in 1973 for increasing the productivity of
smallholder agricultural production in the developing world by McNamara
(Rovani 1988, p.xi). The major implications for rural development policy were
not only to affect lending programmes and operational policy of the World
Bank, but for the Brazilian government who implemented this policy. The
PIR-30086 - Researching and Dissertation Writing in Politics and International
Relations .
Student no. 0800 2751 01
Page | 17
Bank’s lending programme for Brazil was to reduce its economic dependency
on its main exports such as coffee and reduce its public sector deficit, as well
as to alleviate the poverty within Northwest Brazil (Kapur, Lewis and Webb
1997, p. 274).
Due to the fact that there was a massive influx of migrants into Rondônia and
western Mato Grosso, the Brazilian government secured a loan from the
World Bank to partially finance the Northwest Regional Development
programme (POLONOROESTE) at a cost of 1.5 billion United States Dollars
(Browder, Pedlowski and Walker 2008, p.1474). The POLONOROESTE
programme was first proposed in 1979 and implemented in 1981; it consists of
three main phases. The first was the improvement of 1,500 kilometres
Cuiaba-Porto Velho highway and regional road networks (Lele 2000, p.99).
The second phase was rural development for small farmers in the north-
western Mato Gross region and the third phase was the new settlement
projects in Rondônia (Lele 2000, p.99).
The main contested issue was a highway infrastructure to penetrate the
immense region of the Amazon (Toussaint 2005, p.293). The immense
problem to which the bank staff and McNamara had about loaning Third World
governments for road building were, that Third World governments would let
roads become ruined over a period of time (Shapley 1993, p.567). For the
reason that Third World governments did not maintain the roads they build,
therefore the roads would not become economically beneficial to the people
(Shapley 1993, p.567). It was for the reason McNamara had made it a policy
not finance projects in Third World for road building. However this was later
revised to the Brazilian government, on that condition the government could
have a loan from the World Bank for road development if they made it
beneficial over the long term. To achieve optimal benefits from roads
development, road improvement and agriculture had to be integrated together
to achieve economic returns which they did with the POLONOROESTE
programme (Beenhakker 1979, p.1).
PIR-30086 - Researching and Dissertation Writing in Politics and International
Relations .
Student no. 0800 2751 01
Page | 18
The consequences of McNamara's actions when giving loans to the Brazilian
government for the POLONOROESTE programme highlights that the
hypocrisy within McNamara’s own leading practises. It was only when the
Brazilian military government came into power through a coup d’état in 1964
and changed the way the government operated, that McNamara gave a loan
to the government. Therefore the loan did not become about the justification
of implementing rural development, rather it had a political justification. The
Brazilian government of 1964 had a greater openness to imports between
1967 and 1974 and improved its relations with the International Monetary
Fund (IMF) and the World Bank (Coes 1995, p.139). Arguably the World Bank
must have a continuation of lending practises towards each nation and not
lending for the sake of making quick financial gains. Nevertheless counter-
argued by McNamara, the World Bank could lend to military governments and
dictators if they choose to because of what was stated in the World Bank
charter. On the other hand in relation to the POLONOROESTE programme
David Price, an anthropologist claimed that World Bank officials told him there
would be no point obstructing POLONOROESTE because the Bank would
find other means to fund projects in Brazil (Payer 1982, p.351). Therefore the
Brazilian government could use the funds to implement POLONOROESTE.
What this meant was that the justification for the programme was not for the,
benefit of Brazil which McNamara later argued but rather for the economic
benefit for the Bank itself. Is this argument valid? The validity of this
statement is due to the POLONOROESTE programme, every loan borrowed
has to be repaid with interest agreed by the Bank and the member nation
arguably it seems the economic benefit of the POLONOROESTE project
would far outweigh the environmental problems that occurred. The economic
benefit to the creditors from Brazil’s debt during the 1980s was an
approximately 100 billion United States dollars (USD) which Brazil’s owed
(Frelastre 1985, p.900). From the 100 billion USD itself, 434.4 million USD
originated from six World Bank loans for the POLONOROESTE programme
(Lele 2000, p.99).
Even though McNamara left office six months after the loans enacted by
Brazil, they were approved by McNamara. Robert McNamara's personal style
PIR-30086 - Researching and Dissertation Writing in Politics and International
Relations .
Student no. 0800 2751 01
Page | 19
of management when it came to business involved excessive risking taking if
there was a likelihood of profit to be made, to justify his actions. The
importance of this is argued by Payer, is that Brazil became one of the largest
borrowers from the International Bank for Reconstruction and Development
(IBRD) at a time when the financial markets were in confusion about Brazil’s
debt burden (1982, p.346). The cause of this was due to the net capital
inflows into the country against the debt owed. It seems that McNamara’s
judgement about the international financial consequences of the repayment of
loan were relaxed; due to his belief that if money was spent wisely it would be
repaid, therefore this would not cause instability to the international financial
system.
Toussaint argued that McNamara's underlying assumption was that
prices of exported goods would continue to increase on the world market and
debt obligations were a powerful incentive for nations to modernise (2005:
210-11). Nevertheless, McNamara's judgement was based on his experience
and statistical analysis, which he applied during his time at the Ford Motor
company and for the Vietnam War. He had come to rely on it for some crucial
decisions. It was his innate belief that his analysis of the consequences of
granting the loan would be beneficial to the Bank, and failed to forsee the
mounting Third World debt crisis looming. This became apparent in early in
1981 however, when there was inaccurate forecasting of export revenue
which was meant to aid developing countries in their financial projections
(George and Sabelli 1994, p.100-01).
The poor judgement by World Bank officials caused two problems for Brazil.
In the case of the POLONOROESTE programme, it meant that the Bank's
resources were disbursed long before the full extent of the distortion in the
programmes the government was trying to implement, was realised (Lele
2000:100). What was realised was that the non-physical components of the
project – environment and Amerindian protection, agricultural support services
and community facilities – did not reach the expected level of the
POLONOROESTE programme. It was argued by Yves Rovani in Rural
Development World Bank experience of 1965-86 that each project was
scheduled for completion within five years, however nine years later only two
PIR-30086 - Researching and Dissertation Writing in Politics and International
Relations .
Student no. 0800 2751 01
Page | 20
(out of five scheduled) have been completed (1988: 63). What this meant was
that the top-down approach of the leadership of the World Bank by McNamara
did not account for the social-economic dynamics of implementing this policy.
The significance of this has been argued before, it highlights the ability of the
World Bank to implement polices to the best ability of the bank and secondly it
highlights the administrative side of the World Bank as being weak to show
strong leadership. Which was emphasised in the Banks staff report,
Integrated Development of the Northwest Froniter (1979), that the successful
execution of the development programme for the Northwest will require
exceptionally strong central management (World Bank 1979, p.2).
The second problem caused by poor judgement by the World Bank was the
overestimation of the Brazilian government’s capability to handle the social
and environmental objectives. The environment was the second major
problem that arose from the POLONOROESTE programme; because the
POLONOROESTE programme caused the fastest rate of deforestation within
Brazilian Amazon (cultural survival 2011). The rate of deforestation in the
Amazon increased from 1.7 percent in 1978 to 16.1 in 1991 (Rich 1995, p.28).
Just like the Vietnam war previously, PIDER program and POLONOROESTE
McNamara simplified matters to believe that things could be easily achieved if
people followed the chain of command. However this only became apparent,
when the World Bank then realise the technicality of things were more
complex. Argued by Nelson in The World Bank and Non-governmental
Organisations, the policy making branch of the World Bank excludes many
political and social-cultural considerations that shape the realities of social and
economic change (1995: 146). The significance of this is, the rate of
deforestation within the Amazon would not have occurred according to the
Operations Evaluations Development (OED) had there been adequate checks
and balances; such as supervision, monitoring etc.
Although argued for by Mahar and Ducrot (1998), the World Bank had
to weigh the consequences of getting involved in an ongoing process which
the Brazilian government had no control over or letting the process run its
course (1998, p.2). This justification is very unlikely because the World Bank
PIR-30086 - Researching and Dissertation Writing in Politics and International
Relations .
Student no. 0800 2751 01
Page | 21
administration under McNamara was in no doubt concerned about the
environment but the effort taken did not reflect the reality.
It seems the World Bank under Robert McNamara took a gamble to try new
lending practises for the development of the environment. Sadly it did not reap
the benefits from this gamble. The importance point is that the World Bank
carried on lending for projects which did not benefit member nations, yet at
the very same time allowed the member nations to accept these loans.
Nevertheless maybe the turn of events would have been different had
McNamara stayed for a full fifth term in 1981. It seems that McNamara knew
the difficulty of this project, and only when it became apparent and harder to
management did McNamara abandon the task ahead. Maybe
POLONOROESTE, was becoming his Vietnam and just like Vietnam he did
not want to leave with his reputation tarnished. Nonetheless the McNamara’s
reputation was already stained prior to the crisis that arose for the
POLONOROESTE. All that can be said is that the World Bank is good at
doing what it knows, therefore it should perhaps have continued in those
policy fields of development.
PIR-30086 - Researching and Dissertation Writing in Politics and International
Relations .
Student no. 0800 2751 01
Page | 22
5 Discussion
In this chapter, the similarities and differences between the
POLONOROESTE and PIDER programmes will be discussed. Firstly, there
was a determination at all costs to loan to the Brazilian government, unlike the
Mexican government. This was due to McNamara's nature of wanting to
achieve annual lending targets. Firstly, the consequences of this help to
explain how the shortcomings arose. Secondly, the management style of the
POLONOROESTE and PIDER programmes highlighted complacency within
the World Bank because of the lack of preparation by McNamara and World
Bank staff. Thirdly, most of the main texts obtained for the case studies came
from World Bank Publications; therefore the question of the books’ biases will
be examined. Lastly, it will be concluded that the differences were initially
apparent but the similarities are now more apparent than before, and the
consequences of McNamara’s leadership style caused more money to be
given to both countries to fix the consequences that arose from lending money
to them in the first place.
In the POLONOROESTE programme, there was arguably determination (at all
costs) to loan to the Brazilian government, whereas with the Mexican
government there was not the same resolve. According to George and Sabelli
(1994), the reason for this is that, theoretically, the World Bank was supposed
to finance projects requested by a borrowing government (p.43). However,
when McNamara entered the World Bank in 1968 there was a pressure to
lend because there was a negative transfer of money into the World Bank
(Weaver, 2008; p.84). Hence, as argued in the chapter about the Mexican
PIDER programme, there was a concentration on annual lending targets.
Whereas, in the POLONOROESTE programme, the World Bank’s
concentration was on helping the Brazilian government implement the
programme.
The differences between the two programmes are the amount of money and
the technicalities involved. For the PIDER programme, the World Bank loaned
the Mexican government a total of 110 million United States dollars, in
comparison to 434 million United States dollars for POLONOROESTE;
PIR-30086 - Researching and Dissertation Writing in Politics and International
Relations .
Student no. 0800 2751 01
Page | 23
arguably this meant that the former loan did not help the World Bank reach its
annual lending targets for that year. Hence, as argued in the chapter
regarding Mexico, both McNamara and World Bank staff concentrated on the
objective of loaning the Mexican government more money3
, rather than
concentrating on the PIDER project. As argued by Bare (1998) and in most of
the literature, McNamara had an obsession with numerical targets. However,
authors such as Bare must realise that statistics have an essential role in
international finance; therefore to contend that McNamara had an obsession
with such statistics may not be justified as an argument of his nature.
Secondly, the management of the POLONOROESTE and PIDER
programmes highlighted that the leadership of McNamara of the World Bank
was a continuation of his leadership style from the Pentagon, due to both
programmes being managed through a top-down approach. The
consequence of a top-down managerial style is that the central authoritative
figure is further away from direct involvement; in the PIDER programme, this
arguably meant that the World Bank did not allow the flow of goods and
services until the structure was reformed. However, in the POLONOROESTE
programme the management style fundamentally emphasised complacency
within the World Bank. This arose due to the fact that when an organisation
becomes too large, it cannot function effectively without more standardisation
and formality. One arguable consequence of this complacency was that the
administration did not sufficiently emphasise the social importance of the
POLONOROESTE programme, hence causing much destruction (such as
bringing dangerous diseases to indigenous tribes in the rainforest).
In addition, the Morawetz study argued that the World Bank had some blind
spots (1977, p.46). The Morawetz study on the World Bank as a whole and
the Operations Evaluations Development’s (OED)4
conclusion of the
POLONOROESTE programme emphasised that the World Bank under
McNamara’s leadership was unprepared for the consequences that happened
in POLONOROESTE. Although the consequences of PIDER were better than
3
There were a total of three PIDER projects financed by the World Bank.
4
The Operations Evaluations Development is now called Improving Development Effectiveness.
PIR-30086 - Researching and Dissertation Writing in Politics and International
Relations .
Student no. 0800 2751 01
Page | 24
the POLONOROESTE programme, which caused significant environmental
disaster to the Brazilian Amazon, the problem of the PIDER programme was
the unequal distribution of resources. The reason for this was that the PIDER
programme received traditional lending from the World Bank, whereas the
POLONOROESTE programme undertook a new type of lending because the
World Bank had not previously lent money for environmental purposes.
The case studies highlight the difficulty of obtaining material for this research,
as most of the main texts for the case studies were published by the World
Bank. Therefore, even critical texts of the POLONOROESTE programme
were not critical enough because they did not fully explain the consequences
of the actions of the World Bank, unlike books not published by the World
Bank (such as Mortgaging the Earth by Brice Rich). The reasons for this stem
from the methodology; therefore in the future, even though newspapers might
not provide much analytical depth, they should be included.
The similarities and differences between the POLONOROESTE and PIDER
programmes highlighted the shortcomings of the World Bank under the
stewardship of Robert McNamara. However, is it fair to say that these
shortcomings may have happened anyway? Arguably not, as the personality
of the leader affects the structure of any organisation. When it came to
McNamara, this meant changing the way the World Bank ran. The effects of
the POLONOROESTE programme are of more concern than the PIDER
programme because it was the biggest environmental disaster to date for the
World Bank. Arguably, the differences were initially obvious but the similarities
are now more apparent than before; more money had to be given to both
countries to fix the consequences that arose from lending money to them in
the first place.
PIR-30086 - Researching and Dissertation Writing in Politics and International
Relations .
Student no. 0800 2751 01
Page | 25
6 Conclusion
This thesis has investigated whether or not the shortcomings of the World
Bank were due to the leadership style of McNamara or the organisational
structure of the World Bank. It is fair to conclude that the aims undertaken
were achieved, with evidence to justify the fact that it was the leadership style
of Robert Strange McNamara that caused the World Bank’s shortcomings.
Firstly, this dissertation began by exploring how McNamara changed the two
biggest institutions in the United States and set out to continue this trend with
the World Bank. However, were the changes within the World Bank due to
him or were they just a natural evolution of the World Bank? Current studies
indicate that it was a carefully orchestrated transformation by McNamara for
the survival of the World Bank; nevertheless, it compromised the World
Bank’s integrity.
McNamara’s changes within the World Bank began with increasing its number
of staff to help increase lending projects throughout the world. What can be
learnt from this is that the effectiveness of an organisation cannot necessarily
be enhanced by adding more people to the organisation. Rather, having
specific types of people to manage and an effective command structure
determine an effective organisation, not vice versa. However, it was
McNamara's leadership that affected the organisation because the Bank’s
staff felt that there was pressure to lend for any project, especially as
McNamara could justify lending for projects with statistics. This fundamental
change in the institution meant that it was no longer concerned with the quality
of the projects across the world and the millions of lives that the World Bank
affected; these original intentions were being undermined.
The strength of this argument is only emphasised in the two case studies.
Therefore, the weakness of this argument is: is it fair to fundamentally say that
the quality of projects was constantly overlooked throughout the whole
organisation during his presidency? Arguably it seems yes, according to
Ayres, because there was a running tension throughout McNamara’s
PIR-30086 - Researching and Dissertation Writing in Politics and International
Relations .
Student no. 0800 2751 01
Page | 26
presidency; how to move a lot of money throughout the Bank on the behalf of
poverty alleviation (1983, p.10). However, Ayres counters this by quoting from
interviews with officials in the World Bank; they stated that the World Bank is a
bank first and development agency second (1983, p.10). Nevertheless, one
can never test the validity of that statement. In the case of Robert McNamara,
it is fair to say that the troubles arose from him, which is reinforced by critical
evidence published by World Bank staff members. It is fair to say that projects
did have shortcomings because of his top-down leadership approach and not
because of the organisation itself. Shapley (1991) argued that McNamara
could have instructed the World Bank to do his will but he created so much
fear within the organisation that the problems with his projects never reached
him.
When it came to the PIDER programme, it was arguably not surprising that
this top-down model was transferred onto the development project. Whilst
conducting research for this dissertation, it has been difficult to completely
grasp all the problems that arose from the two programmes because of the
lack of information on some crucial aspects of this subject. As material
publication on these topics is not so widespread, it has been harder to
critically analyse it. Therefore, further research will be needed to determine
whether the causes of the weaknesses stemmed from the World Bank or from
the Mexican government. However, what is clear regarding the PIDER project
is that the Bank declared it unsatisfactory because of cost overruns.
POLONOROESTE was considered unsatisfactory by the World Bank due to
the environmental problems that occurred. Did that mean McNamara, who
was praised for his intellect, did not understand the effects that had lead to
these problems within the projects? McNamara, it seems, was very good at
counting the cost of human lives, yet he could not physically and emotionally
understand the lives he was trying to help. Hence, being detached from their
involvement, the World Bank implemented models in both the PIDER and
POLONOROESTE programmes that overall achieved the same outcome – of
not truly being successful.
PIR-30086 - Researching and Dissertation Writing in Politics and International
Relations .
Student no. 0800 2751 01
Page | 27
Yet, ironically, the organisation was too afraid to admit failure because
McNamara was afraid to admit failure himself; he was a man who wanted
perfection ever since his years at university. The conclusion of this thesis is
that Robert Strange McNamara was a man of great intellect and power, yet he
could not truly communicate his objectives throughout the World Bank.
Therefore, as leader, he fundamentally set the wrong objectives in trying to
achieve his aims and did not fully realise the consequences of his power.
PIR-30086 - Researching and Dissertation Writing in Politics and International
Relations .
Student no. 0800 2751 01
Page | 28
Bibliography
Ayres, R (1983) Banking on the poor; The World Bank and World Poverty.
Cambridge: MA.
Bare, J. (1998). Of loans and Results: Elements for a chronicle of Evaluation at
the World Bank. Human Organization , 319-25.
Beenhakker, H (1979). Identification and appraisal of rural roads projects.
Washington, DC: World Bank.
Bergsman, J (1980). Income Distribution and Poverty in Mexico. Washington,
D.C.: World Bank.
Browder, J., Pedlowski, M and Walker, R. (2008). Revisiting Theories of Frontier
Expansion in the Brazilian Amazon: A Survey of the Colonist Farming Population
in Rondonia’s Post-frontier, 1992–2002. World Development. 36 (8), 1469-1492.
Cernea, M.M (1979). measuring project impact : monitoring and evaluation in the
pider rural development project Mexico.. Washington, D.C: World Bank.
Cernea, M.M (1983). A social methodology for community participation in local
investments: The experience of Mexico's PIDER Program. Washington, D.C:
World Bank.
Cernea, M.M., (1992). The Building Blocks of Participation: Testing Bottom-Up
Planning, World Bank - Discussion Papers 166, World Bank.
Cockcroft,J., (1983). Mexico. New York: Monthly Review Press.
Coes, D. (1995). Macroeconomic crises, policies, and growth in Brazil, 1964-90.
Washington, D.C: World Bank Publications.
Cultural Survival (2011) World Bank Holds Funds for Development Project in
Brazil. Available:http://www.culturalsurvival.org/publications/cultural-survival-
quarterly/brazil/world-bank-holds-funds-development-project-brazil. Last
accessed 25 Dec 2010.
Fox, J., (1994). The Difficult Transition from Clientelism to Citizenship: Lessons
from Mexico. World Politics. 46 (2), 151-184.
Frelastre, G. (1985). Tiers Monde. Successes and failures of the Polonoroeste
Integrated Development Program in Brazil. 26 (104), 900-20.
George, S and Sabelli, F (1994). Faith And Credit: The World Bank's Secular
Empire. Boulder, Colorado: Westview Press.
PIR-30086 - Researching and Dissertation Writing in Politics and International
Relations .
Student no. 0800 2751 01
Page | 29
Gilbert, C and Vines, D (2000). The World Bank Structure and Policies.
Cambridge: Cambridge University Press.
Gouldner, A (1954) Patterns of Industrial Bureaucracy New York: Free Press.
Goulet, D., (1983). Mexico Development Strategies for the future. Indiana, USA:
University of Notre Dame Press.
Halberstam, D (1974). The Best and The Brightest. London: Pan Books LTD.
IBRD (1975) Rural Development Sector Policy Paper. Washington D.C: The
World Bank.
Kapur, D., Lewis, J., & Webb, R. (1997). The World Bank its First Half Century
volume 2: Perspectives. Washington, D.C: The Brookings Institution.
Kapur, D., Lewis, J., and Webb, R., (1997). The World Bank: History. Washington,
D.C: Brookings Institution Press.
Kraske et al (1996) Bankers with a mission: the presidents of the world bank,
1946-91. Oxford: Oxford university press.
Laar, A (1980). The World Bank and the poor. London: Martins Nijhoff
Publishing.
Lele, U., (2000). Brazil: forests in the balance : challenges of conservation with
development. World Bank Publications.
Lewis, J and Kapur, I (1973). The World Bank Group, Multilateral Aid, and the
1970s. London: Lexington Books.
Mahar, D.J. and C.E.H. Ducrot (1998) Land-use zoning on tropical frontiers:
emerging lessons from the Brazilian Amazon. World Bank.
Marx, K and E, Friedrich (2009). The Communist Manifesto. Middlesex: The
Echo Library.
Mason, E.S and Asher, E (1973): The World Bank Since Bretton Woods.
Washington: The Brookings Institution.
McNamara Robert, (1973). One hundred countries, two billion people. London:
Pall Mall Press.
Morawetz, D. (1977). Twenty-Five Years of Economic Development 1950-1975.
Baltimire: Johns Hopkins University Press.
Nelson, P. (1995). The World Bank and Non-governmental Organisations. New
York: St. Martin's Press.
Payer, C. 1982 The World Bank A Critical Analysis. New York: Monthly Review
Press.
PIR-30086 - Researching and Dissertation Writing in Politics and International
Relations .
Student no. 0800 2751 01
Page | 30
Reid, E. (1973). McNamara's World Bank. Foreign Affairs. 51 (1), 794-811.
Rich, B., (1995). Mortgaging the Earth: The World Bank, Environmental
Impoverishment, and the Crisis of Development. Boston: Beacon.
Robbins, S (1990). Organisation theory, structure, design and applications. 3rd
ed. New Jersey: Prentice Hall.
Rovani, Y. 1988 Rural development World Bank experience 1965-86 Washington,
D.C: The World Bank.
Shapley, D (1993). Promise and Power The Life and Times of Robert McNamara.
London: Little, Brown and Company.
Toussaint, E (2008). The World Bank A Critical Primer. London: Pluto Press.
Toussaint, E. (2005). Your Money [or] Your Life The Tyranny of Global Finance.
Chicago, Illinois: Haymarket Books.
Weaver, C. (2008). Hyprocrisy Trap: The World Bank and the Poverty of
Reforms. Princeton, New Jersey: Princeton University Press.
Weber, M., Gerth, H and Mills, C (1946). From Max Weber: Essays in sociology..
New York: Oxford University Press.
World Bank (1979) Integrated Development of Northwest Frontier. Washington,
DC: World Bank Publications.
Word count: 8 725

Contenu connexe

En vedette

Ice c-21 to 41 fundamentals
Ice c-21 to 41 fundamentalsIce c-21 to 41 fundamentals
Ice c-21 to 41 fundamentalsjahanzaibkhawja
 
Why is There a Palm Tree on that Building?
Why is There a Palm Tree on that Building?Why is There a Palm Tree on that Building?
Why is There a Palm Tree on that Building?Coastal Construction
 
Eco by hemmawan
Eco by hemmawanEco by hemmawan
Eco by hemmawanEim Jung
 

En vedette (6)

Nutrition
NutritionNutrition
Nutrition
 
Ice c-21 to 41 fundamentals
Ice c-21 to 41 fundamentalsIce c-21 to 41 fundamentals
Ice c-21 to 41 fundamentals
 
Why is There a Palm Tree on that Building?
Why is There a Palm Tree on that Building?Why is There a Palm Tree on that Building?
Why is There a Palm Tree on that Building?
 
Eco by hemmawan
Eco by hemmawanEco by hemmawan
Eco by hemmawan
 
Certificación ángel azul
Certificación ángel azulCertificación ángel azul
Certificación ángel azul
 
JM-Portfolio-2015
JM-Portfolio-2015JM-Portfolio-2015
JM-Portfolio-2015
 

Similaire à finished dissertation

Williams Essay.pdf
Williams Essay.pdfWilliams Essay.pdf
Williams Essay.pdfSusan Ramos
 
Analytical Essay Example Outline
Analytical Essay Example OutlineAnalytical Essay Example Outline
Analytical Essay Example OutlineJulie Songy
 
English As A Global Language Essay. English as a global language - good or ba...
English As A Global Language Essay. English as a global language - good or ba...English As A Global Language Essay. English as a global language - good or ba...
English As A Global Language Essay. English as a global language - good or ba...Chelsea Cote
 
Example Of A Thesis In A Persuasive Essay
Example Of A Thesis In A Persuasive EssayExample Of A Thesis In A Persuasive Essay
Example Of A Thesis In A Persuasive EssayAnna May
 
Essay On Traffic In Hindi Language. Online assignment writing service.
Essay On Traffic In Hindi Language. Online assignment writing service.Essay On Traffic In Hindi Language. Online assignment writing service.
Essay On Traffic In Hindi Language. Online assignment writing service.Mimi Young
 
Summer Reading List
Summer Reading ListSummer Reading List
Summer Reading Listiamaguest
 
Essay On Indian Army. Short Essay On Indian Army With Written Speech - Our Pr...
Essay On Indian Army. Short Essay On Indian Army With Written Speech - Our Pr...Essay On Indian Army. Short Essay On Indian Army With Written Speech - Our Pr...
Essay On Indian Army. Short Essay On Indian Army With Written Speech - Our Pr...Susan Neal
 
Singular How To Write A Narrati. Online assignment writing service.
Singular How To Write A Narrati. Online assignment writing service.Singular How To Write A Narrati. Online assignment writing service.
Singular How To Write A Narrati. Online assignment writing service.Amelia Richardson
 
Trade Book Review, Cluetrain Manifesto
Trade Book Review, Cluetrain ManifestoTrade Book Review, Cluetrain Manifesto
Trade Book Review, Cluetrain Manifestoswatrub1
 
Useful Information On Writing A Cause And Effect Essay A
Useful Information On Writing A Cause And Effect Essay AUseful Information On Writing A Cause And Effect Essay A
Useful Information On Writing A Cause And Effect Essay ACrystal Sanchez
 
Mba Essay Service. MBA Essay Writing Service Australia from the Academic Experts
Mba Essay Service. MBA Essay Writing Service Australia from the Academic ExpertsMba Essay Service. MBA Essay Writing Service Australia from the Academic Experts
Mba Essay Service. MBA Essay Writing Service Australia from the Academic ExpertsAshley Matulevich
 
Step By Step Paragraph Writing. Writing A Cause And Effect Essa
Step By Step Paragraph Writing. Writing A Cause And Effect EssaStep By Step Paragraph Writing. Writing A Cause And Effect Essa
Step By Step Paragraph Writing. Writing A Cause And Effect EssaTraci Webb
 
Book review : thank you for being late
Book review : thank you for being late Book review : thank you for being late
Book review : thank you for being late Sahil Yadav
 
PAY FOR SOMEONE TO WRITE YOUR ESSAY UK Peugramak1987
PAY FOR SOMEONE TO WRITE YOUR ESSAY UK Peugramak1987PAY FOR SOMEONE TO WRITE YOUR ESSAY UK Peugramak1987
PAY FOR SOMEONE TO WRITE YOUR ESSAY UK Peugramak1987Veronica Garcia
 
Compare And Contrast Essay For Middle School
Compare And Contrast Essay For Middle SchoolCompare And Contrast Essay For Middle School
Compare And Contrast Essay For Middle SchoolMonique Carter
 
Famous Essay.pdfFamous Essay. Essay Written By Famous Writers - 40 Best Essay...
Famous Essay.pdfFamous Essay. Essay Written By Famous Writers - 40 Best Essay...Famous Essay.pdfFamous Essay. Essay Written By Famous Writers - 40 Best Essay...
Famous Essay.pdfFamous Essay. Essay Written By Famous Writers - 40 Best Essay...Frances Armijo
 
6715, 1232 PMThe Psychology of Barack ObamaPage 1 of 3h.docx
6715, 1232 PMThe Psychology of Barack ObamaPage 1 of 3h.docx6715, 1232 PMThe Psychology of Barack ObamaPage 1 of 3h.docx
6715, 1232 PMThe Psychology of Barack ObamaPage 1 of 3h.docxevonnehoggarth79783
 
Can You Write A 10 Page Paper In One Day The Be
Can You Write A 10 Page Paper In One Day The BeCan You Write A 10 Page Paper In One Day The Be
Can You Write A 10 Page Paper In One Day The BeDonna Kuhns
 

Similaire à finished dissertation (20)

Williams Essay.pdf
Williams Essay.pdfWilliams Essay.pdf
Williams Essay.pdf
 
Wwi Essay.pdf
Wwi Essay.pdfWwi Essay.pdf
Wwi Essay.pdf
 
Analytical Essay Example Outline
Analytical Essay Example OutlineAnalytical Essay Example Outline
Analytical Essay Example Outline
 
English As A Global Language Essay. English as a global language - good or ba...
English As A Global Language Essay. English as a global language - good or ba...English As A Global Language Essay. English as a global language - good or ba...
English As A Global Language Essay. English as a global language - good or ba...
 
Example Of A Thesis In A Persuasive Essay
Example Of A Thesis In A Persuasive EssayExample Of A Thesis In A Persuasive Essay
Example Of A Thesis In A Persuasive Essay
 
Essay On Traffic In Hindi Language. Online assignment writing service.
Essay On Traffic In Hindi Language. Online assignment writing service.Essay On Traffic In Hindi Language. Online assignment writing service.
Essay On Traffic In Hindi Language. Online assignment writing service.
 
Summer Reading List
Summer Reading ListSummer Reading List
Summer Reading List
 
Essay On Indian Army. Short Essay On Indian Army With Written Speech - Our Pr...
Essay On Indian Army. Short Essay On Indian Army With Written Speech - Our Pr...Essay On Indian Army. Short Essay On Indian Army With Written Speech - Our Pr...
Essay On Indian Army. Short Essay On Indian Army With Written Speech - Our Pr...
 
Singular How To Write A Narrati. Online assignment writing service.
Singular How To Write A Narrati. Online assignment writing service.Singular How To Write A Narrati. Online assignment writing service.
Singular How To Write A Narrati. Online assignment writing service.
 
Trade Book Review, Cluetrain Manifesto
Trade Book Review, Cluetrain ManifestoTrade Book Review, Cluetrain Manifesto
Trade Book Review, Cluetrain Manifesto
 
Useful Information On Writing A Cause And Effect Essay A
Useful Information On Writing A Cause And Effect Essay AUseful Information On Writing A Cause And Effect Essay A
Useful Information On Writing A Cause And Effect Essay A
 
Mba Essay Service. MBA Essay Writing Service Australia from the Academic Experts
Mba Essay Service. MBA Essay Writing Service Australia from the Academic ExpertsMba Essay Service. MBA Essay Writing Service Australia from the Academic Experts
Mba Essay Service. MBA Essay Writing Service Australia from the Academic Experts
 
Step By Step Paragraph Writing. Writing A Cause And Effect Essa
Step By Step Paragraph Writing. Writing A Cause And Effect EssaStep By Step Paragraph Writing. Writing A Cause And Effect Essa
Step By Step Paragraph Writing. Writing A Cause And Effect Essa
 
Book review : thank you for being late
Book review : thank you for being late Book review : thank you for being late
Book review : thank you for being late
 
PAY FOR SOMEONE TO WRITE YOUR ESSAY UK Peugramak1987
PAY FOR SOMEONE TO WRITE YOUR ESSAY UK Peugramak1987PAY FOR SOMEONE TO WRITE YOUR ESSAY UK Peugramak1987
PAY FOR SOMEONE TO WRITE YOUR ESSAY UK Peugramak1987
 
Compare And Contrast Essay For Middle School
Compare And Contrast Essay For Middle SchoolCompare And Contrast Essay For Middle School
Compare And Contrast Essay For Middle School
 
Wpe Sample Essays
Wpe Sample EssaysWpe Sample Essays
Wpe Sample Essays
 
Famous Essay.pdfFamous Essay. Essay Written By Famous Writers - 40 Best Essay...
Famous Essay.pdfFamous Essay. Essay Written By Famous Writers - 40 Best Essay...Famous Essay.pdfFamous Essay. Essay Written By Famous Writers - 40 Best Essay...
Famous Essay.pdfFamous Essay. Essay Written By Famous Writers - 40 Best Essay...
 
6715, 1232 PMThe Psychology of Barack ObamaPage 1 of 3h.docx
6715, 1232 PMThe Psychology of Barack ObamaPage 1 of 3h.docx6715, 1232 PMThe Psychology of Barack ObamaPage 1 of 3h.docx
6715, 1232 PMThe Psychology of Barack ObamaPage 1 of 3h.docx
 
Can You Write A 10 Page Paper In One Day The Be
Can You Write A 10 Page Paper In One Day The BeCan You Write A 10 Page Paper In One Day The Be
Can You Write A 10 Page Paper In One Day The Be
 

finished dissertation

  • 1. [PIR-30086 - Researching and Dissertation Writing in Politics and International Relations . Student no. 0800 2751 01] Dissertation The World Bank under the stewardship of Robert Strange McNamara “A critical analysis of Robert McNamara’s stewardship of the World Bank. Can the World Bank’s shortcomings be explained in his leadership style rather than the organisational structure?” Kofi Tetebo Student Number: 0800 2751 01 4/5/2011 Dissertation submitted in partial fulfillment of the requirements for the BA Degree in International Relations.
  • 2. PIR-30086 - Researching and Dissertation Writing in Politics and International Relations . Student no. 0800 2751 01 Abstract Robert Strange McNamara was the fifth World Bank president and the second longest serving president to date. The position of president is one of the most fundamental positions within the World Bank organisation, other than being on the executive board of directors. The reason this position is very important is due to the fact that World Bank Presidents must effectively coordinate policy and execute policy efficiently. Overall the structural organisation of the World Bank does not only affect the banks performance as an international organisation but the individual lives of peoples within the countries the Bank is trying implement its policy is deeply affected. In this dissertation the role of McNamara’s managerial style will be explored to determine how he influenced and shaped the role of the World Bank. Secondly to explain and understand why the nature of poverty cannot elevated through McNamara's lending practise, which was to increase more lending throughout the international system. Two case studies will focus on this approach of McNamara's lending practises towards two Latin American countries. Then conclude that that it was his leadership at the World Bank which led him down because he could not realise the consequences of his actions.
  • 3. PIR-30086 - Researching and Dissertation Writing in Politics and International Relations . Student no. 0800 2751 01 The World Bank under the stewardship of Robert Strange McNamara “A critical analysis of Robert McNamara stewardship of the World Bank. Can the World Bank’s shortcomings be explained in his leadership style rather than the organisational structure?”
  • 4. PIR-30086 - Researching and Dissertation Writing in Politics and International Relations . Student no. 0800 2751 01 Acknowledgements I am grateful for the support and advice by my tutor Professor John Vogler. I am indebted to his services as a student. Also Tim Doyle for making me very interested in the developments of the Global South. My parents, my brother and Joe Nyame for their support throughout the whole writing process.
  • 5. PIR-30086 - Researching and Dissertation Writing in Politics and International Relations . Student no. 0800 2751 01 Contents Acknowledgement 1. Introduction and Literature review 1 2. Organisation of the World Bank under McNamara. 7 3. Mexico and the PIDER Program 13 4. Deforestation within Brazil 16 5. Discussion 22 6. Conclusion 25 Bibliography 28 Appendix A Appendix B
  • 6. PIR-30086 - Researching and Dissertation Writing in Politics and International Relations . Student no. 0800 2751 01 Page | 2
  • 7. [PIR-30086 - Researching and Dissertation Writing in Politics and International Relations . Student no. 0800 2751 01] Page | 1 1 Introduction and Literature Review In order to understand that it was the continuation of leadership style by Robert Strange McNamara from the Pentagon onto the World Bank, it is important to comprehend the type of man he was. He was a man of great intelligence, once described as “an IBM machine with legs” by Senator Barry Goldwater (Halberstam 1974, p. 112-113).Is this perception of Robert McNamara accurate? Arguably it seems to linger upon some truth about Robert McNamara because, as man of great intelligence he could not fully comprehend the nature of his actions and misjudgements. This can be seen during the Vietnam War whereby by McNamara and President John Kennedy thought it would be better to escalate the war in Vietnam rather than to surrender. Yet even with the disasters that arose from the Vietnam War it seems the propensity within McNamara was to reform organisations like the Pentagon and believe it could succeed, yet in practise they failed to carry out they main objectives efficiently; thus this continued into the World Bank. Literature on McNamara This literature review will consist of five main books, one of which is a bibliographical account of McNamara and one is a historical account of McNamara’s time in the Pentagon. By contrast, the other three are specifically about the World Bank. This literature review will firstly began with a summary of all the books to give an overall understanding of the two key topics: Robert McNamara and his leadership of the World Bank. The second part of the literature review will try to evaluate how the authors would answer the dissertation question. Only then would the differences and similarities between the authors’ perceptions of Robert McNamara and how he actually ran the World Bank be understandable. The final conclusion from the literature review is that, depending on the literature read, McNamara was admired by those around him and those within the World Bank core and disliked a lot by of his critics. However, there is no doubt that McNamara transformed an institution, although even books published by World Bank Publications have some criticism of his leadership style, like Bankers with a Mission: the Presidents of World Banks 1946-91 (1996).
  • 8. PIR-30086 - Researching and Dissertation Writing in Politics and International Relations . Student no. 0800 2751 01 Page | 2 David Halberstam’s book (The Best And The Brightest, 1974). This book provides an account of the ‘whiz kids’ hired by President John Kennedy during the 1960s, who were mostly from business management backgrounds. Halberstam’s account of Robert McNamara describes a man who is very intellectual but has limited social interaction skills and strives for perfection. This can be seen on many occasions, such as when he changed official documents to match the President’s stance on policy, and when he asked people to write everything down because he could read faster than people could talk to him. Halberstam would argue that the leadership of McNamara alienated some people within the World Bank because of his perfectionist nature and his lack of time to care about people’s feelings. Promise and Power: The Life and Times of Robert McNamara is a biographical account by Deborah Shapley published in 1991. Shapley’s account of McNamara as a leader of the World Bank is overall of the same stance as Halberstam. However, the difference between Halberstam and Shapley’s accounts of Robert McNamara is that Halberstam’s book reflects the anger during the period in which it was published (during the Vietnam War), unlike Shapley’s book. Secondly, when it comes to writing style, Shapley writing is much more fluid than Halberstam and slightly less biased. Overall, it seems Shapley would answer the dissertation question in the same way as Halberstam but would say it was a lack of trust that caused McNamara’s shortcomings within the World Bank. Robert Ayres wrote Banking on the Poor: the World Bank and World Poverty in 1983. In this book, Ayres argued that McNamara drastically changed the World Bank like no-one had before. Unlike many other scholars, Ayres argued for and against McNamara’s presidency within the World Bank, highlighting that it is a matter of perspective. Ayres argued both causes because although McNamara had a lot of money to move around within the World Bank for the purposes of poverty alleviation (1981, p.10), his bank staff did not fully agree
  • 9. PIR-30086 - Researching and Dissertation Writing in Politics and International Relations . Student no. 0800 2751 01 Page | 3 with McNamara’s lending policy of loaning to Third World countries regardless of their creditworthiness. Bankers with a Mission: the Presidents of World Banks 1946-91 by Jochen Kraske, et al. depicted the World Bank as an institution willing to help the people of developing countries, yet within the book itself it does not fully criticize the former World Bank presidents for any disasters that have arisen from their lending policies. It cannot be said to be fully biased in nature, although it is slightly because the book was published by World Bank Publications. Within this book, Robert McNamara was depicted as a champion who put poverty alleviation at the heart of international development, whereby development loans were no longer about loaning to first world nations. Also, because of McNamara, new types of loans meant that the World Bank could help many people in many different ways, such as loans for educational programmes and eradication of eye diseases. It seems the author would not argue strongly either way for the president or for the organisational structure as, being published by the World Bank itself, it must justify the usefulness of the World Bank as an institution. Although the difference between Ayres and Kraske is that Ayres said the debate could continue forever, it is in Kraske’s personal interest to represent the World Bank in the best way. Lastly, The World Bank: A Critical Analysis by Cheryl Payer (1982) provides a robust critical analysis of the World Bank, unlike Bankers with a Mission or Banking on the Poor. Throughout the section on Robert McNamara, Payer questions the integrity of his operations, especially the loans to Brazil for environmental development. There is no doubt that Robert McNamara transformed the institution. However the literature on McNamara seems biased either for or against him, however it does seem to realise the shortcomings within his institution.
  • 10. PIR-30086 - Researching and Dissertation Writing in Politics and International Relations . Student no. 0800 2751 01 Page | 4 Literature on Methodology In order to approach answering this thesis, the sources chosen will mostly be from books with some internet websites and journal articles. Although newspapers will be included, the problem that arises is the lack of detailed information, especially in the two case studies from newspapers. The reason for most of the work stemming from books is because there have been many books written on Robert McNamara and the World Bank as an institution. Therefore, this thesis would be a continuation of those works but from a different perspective. Hence, the first the question to be asked and answered is: who is Robert McNamara? To begin answering this question, a bibliographical book search would help to understand the mentality of Robert McNamara. Only then would it be possible to evaluate the nature of Robert McNamara. The design of the question comes down to firstly looking analytically at the structure of the World Bank. The difficulty that then arises is finding literature on how the structure changed under his presidency and also how to present the change in language form, when a diagram might be best. Nevertheless, exploring the policies that McNamara implemented throughout his time as president will be easier because this will available be in the core text books. Therefore, books, just like online sources or journals, have different weighted opinions. For this reason alone, it is a matter of weighing the arguments, although the worry is that the argument of this thesis could be undermined by counter-arguments; hence why literature from both sides must be found and included. Structure of the Remainder of the Dissertation The structure of this thesis will begin (not including the introduction and literature review above) with the chapter titled Organisation of the World Bank under Robert McNamara. McNamara changed the complete structure of the World Bank when he entered office in 1968 and it is important to fully comprehend how his “Ford leadership style” of management had an effect on the Bank. This thesis will equally focus on a brief history of the structure of the World Bank before McNamara. Following this, the thesis will focus on the consequences of Robert McNamara’s reorganisation of the World Bank. At the heart of understanding this are Max Weber (1946) and his theories of
  • 11. PIR-30086 - Researching and Dissertation Writing in Politics and International Relations . Student no. 0800 2751 01 Page | 5 organisational structure and Stephen Robins (1990). Robins highlighted the three components an organisation needs; the importance of these three components relate to how effectively Robert McNamara was able to use the components to run the World Bank. To conclude, the effects caused by the reorganisation of the World Bank through an increase in the number of staff will be explored, as will the consequences of the proliferation of lending through International Development Associations (IDA). This lending influenced the success of the World Bank, but in the long term it was devastating to the nations it tried to help (this has been emphasised in the two case studies). The next chapter will look at the first case study, titled Mexico and the PIDER Programme. Within this chapter, the fundamental questions that will be asked and answered are: why did Robert McNamara loan money to the Mexican government? Was it to achieve his annual lending targets, to make a profit from the loans due to the interest rate that Mexico had to pay back or was it because he just wanted to help people? Secondly, how did McNamara approach implementing a structure to tackle poverty within Mexico? Lastly, did the program fail? If so, why did it fail and what does this tell us about the World Bank under his leadership? The following chapter (Deforestation in Brazil) will be an analysis of the consequences of McNamara’s approach to alleviating poverty that have been further highlighted in Mexico and the PIDER Programme. The reason for this chapter following the chapter on Mexico and the PIDER programme is because of the chronological order the loans were given out by the World Bank. The consequence of this is that it becomes easier to evaluate whether or not there have been different approaches towards development by the World Bank. Therefore, the same questions asked regarding the PIDER programme can be asked again for this case study and the similarities and differences can be explained. The discussion chapter will focus on two main themes; firstly, the differences and similarities between the two case studies will highlight that both approaches brought about similar consequences. Therefore, the likelihood
  • 12. PIR-30086 - Researching and Dissertation Writing in Politics and International Relations . Student no. 0800 2751 01 Page | 6 cannot be a coincidence and only through the reorganisation of the World Bank under McNamara did this happen. Secondly, the fact that most of the main textbooks were published by World Bank Publications explains why some books lack a critical analysis. Finally, the concluding chapter evaluates everything that has been explored in this thesis. In summary, the aims undertaken for this thesis have led me to conclude that it was the leadership style of Robert McNamara that caused the World Banks’ shortcomings. How this came about will be explored by re- evaluating the main arguments throughout this thesis and reviewing the weaknesses and case studies. It is ultimately concluded that while Robert Strange McNamara was a man of great intellect and power, he did not realise the consequences of his power.
  • 13. PIR-30086 - Researching and Dissertation Writing in Politics and International Relations . Student no. 0800 2751 01 Page | 7 2 Organisation of the World Bank under McNamara Robert McNamara completely changed the structure of the World Bank from when he entered office in 1968 until he left office in 19811 . His objective, throughout his tenure as president, was to eliminate global challenges. He set about achieving this goal through a five year lending programme in order to enable him to understand the importance of restructuring the World Bank and the consequences it had on international development policy. This paper shall explore the importance of an organisational structure for an institution and also determine the models that are best suited to run an organisation, such as the World Bank, by examining Stephen Robins’ analysis in Organisation Theory (1990). Robins’ argument highlights the three components an organisation needs; the importance of these three components relate to how effectively Robert McNamara was able to use them to run the World Bank. It is worthy of note that Robert McNamara used his ‘Ford leadership’ style of management to run the organisation. This paper will equally focus on a brief history of the structure of the World Bank in order to fully appreciate why and how Robert McNamara decided to reorganise it. The conclusion of this paper shall highlight the effects of the reorganisation of the World Bank through an increase in staff numbers and more lending through the International Development Association (IDA) in the short-term and how this influenced the success of the bank. It is worth noting, however, that in the long term it caused Third World debt to increase out of control; this will be explored later in two case study scenarios. An organisational structure defines how tasks are allocated and formally co- ordinated within an organisation (Robins, 1990 p.5). According to Robins, there are three components of an organisation: complexity, formalisation and centralisation (1990, p.5). These ideas stem from Max Weber’s notion of ‘bureaucracy’. Weber argued that the most efficient means by which an organisation can achieve its targets are through having: a clear division of labour, a clear authority hierarchy, formal selection procedures and detailed 1 See Appendices A and B. Appendix A: IBRD Organisation Chart February, 1960. Appendix B: Organisation of the World Bank under Robert McNamara
  • 14. PIR-30086 - Researching and Dissertation Writing in Politics and International Relations . Student no. 0800 2751 01 Page | 8 rules and regulations (Robins 1990, p.37). Models of organisational structures are significant because to have an efficient organisation, it must have an effective structure. The organisational structure of the World Bank is ‘bureaucratic’ as described by Max Weber, although throughout the presidency of Robert McNamara, it was enhanced with a ‘Tayloristic’ style of approaching development. The organisational structure of the World Bank originally began with the International Bank of Reconstruction and Development (IBRD) in 1944 and, throughout the history of the World Bank, it has evolved to meet the needs and challenges of the world. Some of these successes include the creation of the International Financial Cooperation (IFC) and the International Development Associations (IDAs) in 1956. Robert McNamara joined the World Bank in 1968 and before he had decided what to do with such a large organisation as the World Bank, he had some instinctive ideas that he felt would help a large organisation to thrive (Shapley, 1993; p.471). Shapley’s analysis of the reason why it was instinctive for Robert McNamara to want to lead a bigger organisation is due to the fact that Robert McNamara practised a certain business style, which he learnt from Harvard Business School during the 1930s. This consisted of different aspects of control: financial, management and statistical (Shapley, 1990; p.21). As a result of this, Robert McNamara instinctively carried out this style of leadership within two very large institutions before he joined the World Bank; these institutions were the Ford Motor Company during the 1940s and the Pentagon from 1961 until 1968. Arguably, with the continuation of the management style that had brought him financial success at the Ford Motor Company and statistical success at the Pentagon (although not with the Vietnam War), McNamara began to reorganise the World Bank in the same way as he had handled the two aforementioned organisations. Aart van de Laar in The World Bank and the Poor (1980) argued negatively against the continuation of Robert McNamara’s leadership of the World Bank with the same people he had earlier worked with at the Pentagon: “several Pentagon hands came to the [World] Bank with McNamara and introduced their techniques as though the output of the organisation was comparable”
  • 15. PIR-30086 - Researching and Dissertation Writing in Politics and International Relations . Student no. 0800 2751 01 Page | 9 (1980; pp.225-227). The justification of Aart van de Laar’s argument is due to the running battle between those who believed that the World Bank should concentrate on doing what it had learned to do and those who wanted it to exercise some leadership across a wide spectrum (Mason and Asher, 1973; p.102). Robert McNamara justified his continued leadership to the same people who had previously worked with him in the Pentagon, with the claim that he needed to achieve the development goals of the World Bank as had happened to the Pentagon. McNamara’s view was that the World Bank had to modernise and not be restricted by its biggest lenders, especially the IDA, which was not being replenished by the United States Congress (Shapley, 1990; p.467). Thus, the bank’s evolution may be viewed as a development that qualified it to assist in the financing of an important but limited range of projects (Mason and Asher, 1973; p.102). In order for the World Bank to be qualified to assist in meeting these global challenges, there was an increase of bank staff members. The number of professional staff increased by 125% between 1963 and 1973 and the staff as a whole grew from 1,600 at the beginning of McNamara’s presidency to 5,700 when he left office in 1981 (Kraske, et al., 1996; p.175). The expansion of the Bank’s staff had three consequences that affected the organisational structure of the World Bank: firstly, there was a lack of representation by the Bank’s professional staff; secondly, the rapid increase in staff meant that the organisation became too large to establish and maintain informal working- level contacts and lastly, quantity was favoured over quality (Laar, 1980; p.222). The distribution of Bank staff is important because of the knowledge each member staff could bring to the World Bank. For the reason that different specialist bank staff can have greater informed knowledge on a wide range of different countries than just a few staff members, who may be deficient in certain banking principles, the bank staff could further contribute in diverse ways to enhance the organisation’s understanding of the factors that help and/or hinder the nature of poverty. The significance of this in relation to the argument for increased staff strength, as postulated by McNamara, is that if there was better representation of members, especially high skilled staff, there would be less likelihood of a reduction in the performance of complex tasks.
  • 16. PIR-30086 - Researching and Dissertation Writing in Politics and International Relations . Student no. 0800 2751 01 Page | 10 In spite of this, Escott Ried considered the reorganisation of staff to be one of McNamara’s main failures as World Bank president. According to Ried, McNamara failed to increase representation in the senior ranks (1973, p.809). Ried’s argument is fundamental because one of the major criticisms of Robert McNamara’s presidency has been the nature of quality versus quantity of bank projects. Shapley argues in Promise and Power: The Life and Times of Robert McNamara (1990) that Robert McNamara used scientific management to carry out each project. It is worth mentioning at this stage that although ‘Taylorism’ depends very much upon each simple task being broken down into segments that can then be analysed, the lack of specialist staff to analyse each segment undermines the quality of the work. The process was no longer about how effective bank projects were but rather how many projects could be carried out within the year. This was especially the case regarding the increase in complexity of the Bank’s tasks, which reduced the president’s ability to directly supervise all the activities within the organisation. Thus, this makes the need for informal working relations among people with the right expertise very vital (Robins, 1990; p.150). It is for this reason only that the first and third consequences of the reorganisation of the World Bank by McNamara were fundamental. What McNamara fundamentally was trying to achieve with more bank staff was to increase lending projects throughout the world. This has been highlighted earlier with an explanation of the significance of McNamara’s Tayloristic style of approaching the World Bank’s challenges. Kraske, et al. (1996) argued that the 1972 reorganisation of the World Bank was based on lengthy analysis and planning by McKinsy and Co., whereby the reorganisation adopted a dualistic structure and placed the responsibility for lending in different regions in the hands of regional vice presidents (Kraske, et al., 1996; p.176). This firstly demonstrates the issue that the Bank’s staff were concerned about the new organisational structure; the question of quality versus quantity arose. Due to the rapidly increasing numbers of lending operations, McNamara emphasised that poor quality investments could not be
  • 17. PIR-30086 - Researching and Dissertation Writing in Politics and International Relations . Student no. 0800 2751 01 Page | 11 effective for development (Kraske, et al., 1996; p.191). Nevertheless, with a managerial structure further removed from day-to-day activities, the likelihood of poor quality development was actually high. In this case, operational staff felt that in the short term there was a trade-off and the pressure to proceed with lending was superseding all activities (Kraske, et al., 1996; p.193). This highlights the dilemma of McNamara’s management style, whereby the challenges of communication could not be completely fulfilled within the hierarchical system. Whereas previously the quality of lending projects outweighed the quantity, because the bank staff size was reduced the bank staff were required to look at every detail meticulously, even though it took months to make a decision. The nature of meticulously planning the details of every transaction, according to McNamara, made the bank ineffective as an institution due to the time it took; nevertheless, McNamara’s leadership and the notion of results led bank staff to fabricate some statistical results. This demonstrates that rules and regulations not only define unacceptable behaviour but also define the minimum levels of acceptable performance (Gouldner, 1954). Hence, Pieter Lieftinck argued that the large increase in projects and staff based on uncertain premises was unjustified (Kraske, et al., 1996; p.175). Lieftinck’s justification for this is due to the fact that McNamara gave Rótberg an almost biblical instruction when he began work at the bank: “find where the wealth exists in the world and bring it to me, that is, to my bank” (Shapley, 1993; p.472). It seems Robert McNamara’s mentality on the nature of poverty was fixated with increasing wealth within the Bank for it to later distribute to development projects, although the nature of poverty is much more complex than that. This is mainly because each nation has its own exogenous and endogenous factors that contribute to the nature of poverty and inequality. With this in mind, it was not surprising that in 1969 Robert McNamara said: “the IBRD is a body that makes investments whose objective is development it is neither a philanthropic institution nor a social welfare agency” (McNamara, 1973; p.155). For this reason alone it can be argued that McNamara reformed the World Bank as an institution for the success of the people within the World
  • 18. PIR-30086 - Researching and Dissertation Writing in Politics and International Relations . Student no. 0800 2751 01 Page | 12 Bank and therefore the consequences of McNamara’s actions were that he did not fundamentally help the people within the nations he was trying to help, as quality was overlooked for quantity. It has been argued by Karl Marx and Friedrich Engles (2009) that the capitalist system is merely exploitive, whereby the main concern is to increase personal capital for oneself, or, in this case, the World Bank. The effectiveness of an organisation depends upon the organisation’s structure, which in turn stems from effective leadership on how the organisation should operate. It seems that the reorganisation of the World Bank by Robert McNamara highlighted the fundamental importance of good organisational structure. This demonstrates that Robert McNamara was effective in helping the World Bank become an organisation that could deal with global challenges by financially increasing the amount of money that entered the World Bank and the amount that the World Bank lent. Robert McNamara stated that the World Bank is not a philanthropic organisation. There is cause for concern because it seems that the reorganisation of the World Bank made it more effective as an organisation for managing financial matters but not for managing development projects at a micro-level. The reason this is of concern is due to the main purposes of the World Bank being to try to eradicate poverty, help development in agriculture, etc. Therefore to achieve sound investments, the quantity should not override the quality.
  • 19. PIR-30086 - Researching and Dissertation Writing in Politics and International Relations . Student no. 0800 2751 01 Page | 13 3 Case study one: Mexico and the PIDER programme The Progamma de Invesiones para el Desarrollo Rural (PIDER) (Programme for Development Investments) was the beginning of Robert McNamara's new approach to development and tackling global poverty. In order to understand why the World Bank lent money to Mexico in 1975, the history of Mexico’s poverty will be explored first of all, including how it encouraged the World Bank to lend towards the PIDER programme. Ayres (1983) argued that it was the commitment to anti-poverty that caused the World Bank to lend in this instance. Ayres argument will be further explored to understand the second most important question; how did the World Bank go about helping the Mexican government implement the PIDER programme? The importance of the approach that the World Bank took in helping to implement PIDER programme is fundamental, as authors (such as Shapley) have accused McNamara of having a top-down approach to development. Lastly, it will be concluded that the learning outcome from the PIDER programme was that better monitoring and evaluation were needed to continue the new style of lending practises. The PIDER programme was initiated in 1973 as a development programme for helping small scale local areas within Mexico, although project activities did not commence until 1975. According to Bergsman in Income Distribution and Poverty in Mexico (1980), Mexico has one of the most unequal distributions of income within the less developed countries (p.4). A quarter of its people (about 21 million) have incomes below the poverty threshold (Cernea, 1992; p.13). Therefore, in May 1975 the World Bank approved a loan at the cost of 110 million United States dollars to the Mexican government for the PIDER 12 rural development programme (Cernea, 1979; p.101). Ayres argued that a country's commitment to anti-poverty encourages the World Bank to fund its projects (1983, p.213). The reason Ayres refers to this is because of the leadership of Robert McNamara and his commitment to tackling global poverty, which began with his Nairobi speech in 1973. Therefore, the approved loan from the World Bank to the Mexican government 2 There were three PIDER programmes in total.
  • 20. PIR-30086 - Researching and Dissertation Writing in Politics and International Relations . Student no. 0800 2751 01 Page | 14 was due to McNamara's belief that he could improve the conditions of the world through his top-down, oriented approach to development; the PIDER programme was no expectation to this (Shapley, 1991; p.499). The significance of Shapley's argument depends upon the correlation between the loans McNamara gave and the top-down bureaucratic model he used to implement development within the countries he was trying to help. Arguably, this top-down approach was exported to the different countries that Robert McNamara gave loans to; the significance of this is that the same profound consequences arguably arose, even though McNamara did not change his approach from one to another. The model used for the PIDER programme required programme co-ordination at the centre by a special office to integrate all the rural development sector's efforts; at a local level, there was decentralised control so interaction between projects and research could happen (IBRD 1975:9). Although the number of micro-regions increased from 54 in 1974 to 131 in 1989, the model brought about some shortcomings. The first problem was that the top-down model did not pay attention to the beneficiaries involved. The fundamental reason for this is because it was difficult to assess the nature of the beneficiaries in the first PIDER project; approximately 75,700 out of 215,000 families in Mexico received some type of social and economic benefit from PIDER (Ayres 1983: 134). The significance of this is that the monitoring and evaluation process of the PIDER programme was not completely adequate. The issue with this is that even though the World Bank under McNamara carried out new administrative tasks across the world, simple processes adapted from previous experience where not implemented for tasks such as PIDER. These practises were carried out with other projects, like the Northwest Region Development programme (POLONOROESTE). Although with every project there is not a realistic chance of perfection, nevertheless in projects like PIDER and POLONOROESTE, the basics must be implemented (such as the socio-economic factors). Furthermore, the top- down bureaucratic structure caused rigidity within the system, whereby genuine field work was constrained. The constraints from the rigidity of the
  • 21. PIR-30086 - Researching and Dissertation Writing in Politics and International Relations . Student no. 0800 2751 01 Page | 15 structure are significant as they affected the achievements of the PIDER programme. The PIDER programme meant to implement the creation of “bottom-up” jobs through farming, agriculture and irrigation projects because McNamara had rejected “trickle-down” economics. The majority of the implementations did not give great cause for concern, as the physical construction of investments was subsequently operational and reached its expected productivity (Cernea, 1983; p.80). Nevertheless, Goulet argued in Mexico: Development Strategies for the Future (1983) that the real concern with the PIDER programme was the inappropriate land tenure system, as this only benefited a small number of “wealthier” inhabitants (p. 68). Therefore, the programme did not tackle the development of rural poor communities but benefited “wealthy” elites. James Cockcroft argued that programmes for “investing in the poor” like PIDER are a way of tying the urban poor into the international credit system (1983, p.232). The importance of this arguably gives the World Bank a chance to increase its annual lending targets towards nations like Mexico so they can further distribute the wealth. Therefore, the consequences of this caused the second shortcoming, as there was a concentration on achieving annual spending targets from the World Bank and not the development of the PIDER programme. As stated by Kapur, Lewis and Webb (1997), the World Bank later classified the programme as unsatisfactory because of cost overruns. Robert McNamara's commitment to tackling poverty cannot be underestimated; however, the way in which this was approached has been raised as an issue. It seems McNamara's desire to achieve annual spending targets manifested itself with projects like PIDER. Nevertheless, does it matter if McNamara concentrated on annual spending targets? Arguably no in relation to the PIDER programme, because the main concern was the top- down model used for development within the PIDER programme. The consequences of the PIDER programme highlighted that the nature of the World Bank during the 1970s was moving away from conservative lending towards social human concerns; however, it also showed that the World Bank needed to have better monitoring and evaluation processes to continue the
  • 22. PIR-30086 - Researching and Dissertation Writing in Politics and International Relations . Student no. 0800 2751 01 Page | 16 new style of lending. 4 Deforestation within Brazil In order to understand the importance of the economic and environmental consequences that arose from lending to Brazil for the Northwest Development program in 1981, a history of the loan will be explored to argue it also had a political intention as well. Afterwards our attention will focus upon the economic consequences which were put forward by Felastre, Toussaint and George, and Sabelli. The significance of their arguments demonstrates firstly that the World Bank through McNamara was fundamentally too concerned about statistical analysis to realise the mounting debt crisis which was looming at a time, when the international markets were uncertain Brazil could pay its loans. Secondly the environmental consequences that arose further demonstrate that the World Bank was not adequately prepared for the Northwest Development program. Lastly conclude that the gamble for McNamara did not reap the benefits. As mentioned in the Organisation of the World Bank under McNamara chapter, the reorganisation of the World Bank began in 1972, which gave a chance for Robert McNamara to lend to new nations which the World Bank had not previously done before, or nations that had been previously isolated internationally. Most of these nations were isolated from the international community by the United States, and the United States being the biggest contributor to the World Bank, had an indirect influence on who the World Bank gave loans to. The consequence of this was that the World Bank upheld the notion of not leading financial assistance towards the nations. Also the World Bank explored in new areas of development due to the reorganisation of its structure to include new departments, such as rural development. Rural development was a strategy in 1973 for increasing the productivity of smallholder agricultural production in the developing world by McNamara (Rovani 1988, p.xi). The major implications for rural development policy were not only to affect lending programmes and operational policy of the World Bank, but for the Brazilian government who implemented this policy. The
  • 23. PIR-30086 - Researching and Dissertation Writing in Politics and International Relations . Student no. 0800 2751 01 Page | 17 Bank’s lending programme for Brazil was to reduce its economic dependency on its main exports such as coffee and reduce its public sector deficit, as well as to alleviate the poverty within Northwest Brazil (Kapur, Lewis and Webb 1997, p. 274). Due to the fact that there was a massive influx of migrants into Rondônia and western Mato Grosso, the Brazilian government secured a loan from the World Bank to partially finance the Northwest Regional Development programme (POLONOROESTE) at a cost of 1.5 billion United States Dollars (Browder, Pedlowski and Walker 2008, p.1474). The POLONOROESTE programme was first proposed in 1979 and implemented in 1981; it consists of three main phases. The first was the improvement of 1,500 kilometres Cuiaba-Porto Velho highway and regional road networks (Lele 2000, p.99). The second phase was rural development for small farmers in the north- western Mato Gross region and the third phase was the new settlement projects in Rondônia (Lele 2000, p.99). The main contested issue was a highway infrastructure to penetrate the immense region of the Amazon (Toussaint 2005, p.293). The immense problem to which the bank staff and McNamara had about loaning Third World governments for road building were, that Third World governments would let roads become ruined over a period of time (Shapley 1993, p.567). For the reason that Third World governments did not maintain the roads they build, therefore the roads would not become economically beneficial to the people (Shapley 1993, p.567). It was for the reason McNamara had made it a policy not finance projects in Third World for road building. However this was later revised to the Brazilian government, on that condition the government could have a loan from the World Bank for road development if they made it beneficial over the long term. To achieve optimal benefits from roads development, road improvement and agriculture had to be integrated together to achieve economic returns which they did with the POLONOROESTE programme (Beenhakker 1979, p.1).
  • 24. PIR-30086 - Researching and Dissertation Writing in Politics and International Relations . Student no. 0800 2751 01 Page | 18 The consequences of McNamara's actions when giving loans to the Brazilian government for the POLONOROESTE programme highlights that the hypocrisy within McNamara’s own leading practises. It was only when the Brazilian military government came into power through a coup d’état in 1964 and changed the way the government operated, that McNamara gave a loan to the government. Therefore the loan did not become about the justification of implementing rural development, rather it had a political justification. The Brazilian government of 1964 had a greater openness to imports between 1967 and 1974 and improved its relations with the International Monetary Fund (IMF) and the World Bank (Coes 1995, p.139). Arguably the World Bank must have a continuation of lending practises towards each nation and not lending for the sake of making quick financial gains. Nevertheless counter- argued by McNamara, the World Bank could lend to military governments and dictators if they choose to because of what was stated in the World Bank charter. On the other hand in relation to the POLONOROESTE programme David Price, an anthropologist claimed that World Bank officials told him there would be no point obstructing POLONOROESTE because the Bank would find other means to fund projects in Brazil (Payer 1982, p.351). Therefore the Brazilian government could use the funds to implement POLONOROESTE. What this meant was that the justification for the programme was not for the, benefit of Brazil which McNamara later argued but rather for the economic benefit for the Bank itself. Is this argument valid? The validity of this statement is due to the POLONOROESTE programme, every loan borrowed has to be repaid with interest agreed by the Bank and the member nation arguably it seems the economic benefit of the POLONOROESTE project would far outweigh the environmental problems that occurred. The economic benefit to the creditors from Brazil’s debt during the 1980s was an approximately 100 billion United States dollars (USD) which Brazil’s owed (Frelastre 1985, p.900). From the 100 billion USD itself, 434.4 million USD originated from six World Bank loans for the POLONOROESTE programme (Lele 2000, p.99). Even though McNamara left office six months after the loans enacted by Brazil, they were approved by McNamara. Robert McNamara's personal style
  • 25. PIR-30086 - Researching and Dissertation Writing in Politics and International Relations . Student no. 0800 2751 01 Page | 19 of management when it came to business involved excessive risking taking if there was a likelihood of profit to be made, to justify his actions. The importance of this is argued by Payer, is that Brazil became one of the largest borrowers from the International Bank for Reconstruction and Development (IBRD) at a time when the financial markets were in confusion about Brazil’s debt burden (1982, p.346). The cause of this was due to the net capital inflows into the country against the debt owed. It seems that McNamara’s judgement about the international financial consequences of the repayment of loan were relaxed; due to his belief that if money was spent wisely it would be repaid, therefore this would not cause instability to the international financial system. Toussaint argued that McNamara's underlying assumption was that prices of exported goods would continue to increase on the world market and debt obligations were a powerful incentive for nations to modernise (2005: 210-11). Nevertheless, McNamara's judgement was based on his experience and statistical analysis, which he applied during his time at the Ford Motor company and for the Vietnam War. He had come to rely on it for some crucial decisions. It was his innate belief that his analysis of the consequences of granting the loan would be beneficial to the Bank, and failed to forsee the mounting Third World debt crisis looming. This became apparent in early in 1981 however, when there was inaccurate forecasting of export revenue which was meant to aid developing countries in their financial projections (George and Sabelli 1994, p.100-01). The poor judgement by World Bank officials caused two problems for Brazil. In the case of the POLONOROESTE programme, it meant that the Bank's resources were disbursed long before the full extent of the distortion in the programmes the government was trying to implement, was realised (Lele 2000:100). What was realised was that the non-physical components of the project – environment and Amerindian protection, agricultural support services and community facilities – did not reach the expected level of the POLONOROESTE programme. It was argued by Yves Rovani in Rural Development World Bank experience of 1965-86 that each project was scheduled for completion within five years, however nine years later only two
  • 26. PIR-30086 - Researching and Dissertation Writing in Politics and International Relations . Student no. 0800 2751 01 Page | 20 (out of five scheduled) have been completed (1988: 63). What this meant was that the top-down approach of the leadership of the World Bank by McNamara did not account for the social-economic dynamics of implementing this policy. The significance of this has been argued before, it highlights the ability of the World Bank to implement polices to the best ability of the bank and secondly it highlights the administrative side of the World Bank as being weak to show strong leadership. Which was emphasised in the Banks staff report, Integrated Development of the Northwest Froniter (1979), that the successful execution of the development programme for the Northwest will require exceptionally strong central management (World Bank 1979, p.2). The second problem caused by poor judgement by the World Bank was the overestimation of the Brazilian government’s capability to handle the social and environmental objectives. The environment was the second major problem that arose from the POLONOROESTE programme; because the POLONOROESTE programme caused the fastest rate of deforestation within Brazilian Amazon (cultural survival 2011). The rate of deforestation in the Amazon increased from 1.7 percent in 1978 to 16.1 in 1991 (Rich 1995, p.28). Just like the Vietnam war previously, PIDER program and POLONOROESTE McNamara simplified matters to believe that things could be easily achieved if people followed the chain of command. However this only became apparent, when the World Bank then realise the technicality of things were more complex. Argued by Nelson in The World Bank and Non-governmental Organisations, the policy making branch of the World Bank excludes many political and social-cultural considerations that shape the realities of social and economic change (1995: 146). The significance of this is, the rate of deforestation within the Amazon would not have occurred according to the Operations Evaluations Development (OED) had there been adequate checks and balances; such as supervision, monitoring etc. Although argued for by Mahar and Ducrot (1998), the World Bank had to weigh the consequences of getting involved in an ongoing process which the Brazilian government had no control over or letting the process run its course (1998, p.2). This justification is very unlikely because the World Bank
  • 27. PIR-30086 - Researching and Dissertation Writing in Politics and International Relations . Student no. 0800 2751 01 Page | 21 administration under McNamara was in no doubt concerned about the environment but the effort taken did not reflect the reality. It seems the World Bank under Robert McNamara took a gamble to try new lending practises for the development of the environment. Sadly it did not reap the benefits from this gamble. The importance point is that the World Bank carried on lending for projects which did not benefit member nations, yet at the very same time allowed the member nations to accept these loans. Nevertheless maybe the turn of events would have been different had McNamara stayed for a full fifth term in 1981. It seems that McNamara knew the difficulty of this project, and only when it became apparent and harder to management did McNamara abandon the task ahead. Maybe POLONOROESTE, was becoming his Vietnam and just like Vietnam he did not want to leave with his reputation tarnished. Nonetheless the McNamara’s reputation was already stained prior to the crisis that arose for the POLONOROESTE. All that can be said is that the World Bank is good at doing what it knows, therefore it should perhaps have continued in those policy fields of development.
  • 28. PIR-30086 - Researching and Dissertation Writing in Politics and International Relations . Student no. 0800 2751 01 Page | 22 5 Discussion In this chapter, the similarities and differences between the POLONOROESTE and PIDER programmes will be discussed. Firstly, there was a determination at all costs to loan to the Brazilian government, unlike the Mexican government. This was due to McNamara's nature of wanting to achieve annual lending targets. Firstly, the consequences of this help to explain how the shortcomings arose. Secondly, the management style of the POLONOROESTE and PIDER programmes highlighted complacency within the World Bank because of the lack of preparation by McNamara and World Bank staff. Thirdly, most of the main texts obtained for the case studies came from World Bank Publications; therefore the question of the books’ biases will be examined. Lastly, it will be concluded that the differences were initially apparent but the similarities are now more apparent than before, and the consequences of McNamara’s leadership style caused more money to be given to both countries to fix the consequences that arose from lending money to them in the first place. In the POLONOROESTE programme, there was arguably determination (at all costs) to loan to the Brazilian government, whereas with the Mexican government there was not the same resolve. According to George and Sabelli (1994), the reason for this is that, theoretically, the World Bank was supposed to finance projects requested by a borrowing government (p.43). However, when McNamara entered the World Bank in 1968 there was a pressure to lend because there was a negative transfer of money into the World Bank (Weaver, 2008; p.84). Hence, as argued in the chapter about the Mexican PIDER programme, there was a concentration on annual lending targets. Whereas, in the POLONOROESTE programme, the World Bank’s concentration was on helping the Brazilian government implement the programme. The differences between the two programmes are the amount of money and the technicalities involved. For the PIDER programme, the World Bank loaned the Mexican government a total of 110 million United States dollars, in comparison to 434 million United States dollars for POLONOROESTE;
  • 29. PIR-30086 - Researching and Dissertation Writing in Politics and International Relations . Student no. 0800 2751 01 Page | 23 arguably this meant that the former loan did not help the World Bank reach its annual lending targets for that year. Hence, as argued in the chapter regarding Mexico, both McNamara and World Bank staff concentrated on the objective of loaning the Mexican government more money3 , rather than concentrating on the PIDER project. As argued by Bare (1998) and in most of the literature, McNamara had an obsession with numerical targets. However, authors such as Bare must realise that statistics have an essential role in international finance; therefore to contend that McNamara had an obsession with such statistics may not be justified as an argument of his nature. Secondly, the management of the POLONOROESTE and PIDER programmes highlighted that the leadership of McNamara of the World Bank was a continuation of his leadership style from the Pentagon, due to both programmes being managed through a top-down approach. The consequence of a top-down managerial style is that the central authoritative figure is further away from direct involvement; in the PIDER programme, this arguably meant that the World Bank did not allow the flow of goods and services until the structure was reformed. However, in the POLONOROESTE programme the management style fundamentally emphasised complacency within the World Bank. This arose due to the fact that when an organisation becomes too large, it cannot function effectively without more standardisation and formality. One arguable consequence of this complacency was that the administration did not sufficiently emphasise the social importance of the POLONOROESTE programme, hence causing much destruction (such as bringing dangerous diseases to indigenous tribes in the rainforest). In addition, the Morawetz study argued that the World Bank had some blind spots (1977, p.46). The Morawetz study on the World Bank as a whole and the Operations Evaluations Development’s (OED)4 conclusion of the POLONOROESTE programme emphasised that the World Bank under McNamara’s leadership was unprepared for the consequences that happened in POLONOROESTE. Although the consequences of PIDER were better than 3 There were a total of three PIDER projects financed by the World Bank. 4 The Operations Evaluations Development is now called Improving Development Effectiveness.
  • 30. PIR-30086 - Researching and Dissertation Writing in Politics and International Relations . Student no. 0800 2751 01 Page | 24 the POLONOROESTE programme, which caused significant environmental disaster to the Brazilian Amazon, the problem of the PIDER programme was the unequal distribution of resources. The reason for this was that the PIDER programme received traditional lending from the World Bank, whereas the POLONOROESTE programme undertook a new type of lending because the World Bank had not previously lent money for environmental purposes. The case studies highlight the difficulty of obtaining material for this research, as most of the main texts for the case studies were published by the World Bank. Therefore, even critical texts of the POLONOROESTE programme were not critical enough because they did not fully explain the consequences of the actions of the World Bank, unlike books not published by the World Bank (such as Mortgaging the Earth by Brice Rich). The reasons for this stem from the methodology; therefore in the future, even though newspapers might not provide much analytical depth, they should be included. The similarities and differences between the POLONOROESTE and PIDER programmes highlighted the shortcomings of the World Bank under the stewardship of Robert McNamara. However, is it fair to say that these shortcomings may have happened anyway? Arguably not, as the personality of the leader affects the structure of any organisation. When it came to McNamara, this meant changing the way the World Bank ran. The effects of the POLONOROESTE programme are of more concern than the PIDER programme because it was the biggest environmental disaster to date for the World Bank. Arguably, the differences were initially obvious but the similarities are now more apparent than before; more money had to be given to both countries to fix the consequences that arose from lending money to them in the first place.
  • 31. PIR-30086 - Researching and Dissertation Writing in Politics and International Relations . Student no. 0800 2751 01 Page | 25 6 Conclusion This thesis has investigated whether or not the shortcomings of the World Bank were due to the leadership style of McNamara or the organisational structure of the World Bank. It is fair to conclude that the aims undertaken were achieved, with evidence to justify the fact that it was the leadership style of Robert Strange McNamara that caused the World Bank’s shortcomings. Firstly, this dissertation began by exploring how McNamara changed the two biggest institutions in the United States and set out to continue this trend with the World Bank. However, were the changes within the World Bank due to him or were they just a natural evolution of the World Bank? Current studies indicate that it was a carefully orchestrated transformation by McNamara for the survival of the World Bank; nevertheless, it compromised the World Bank’s integrity. McNamara’s changes within the World Bank began with increasing its number of staff to help increase lending projects throughout the world. What can be learnt from this is that the effectiveness of an organisation cannot necessarily be enhanced by adding more people to the organisation. Rather, having specific types of people to manage and an effective command structure determine an effective organisation, not vice versa. However, it was McNamara's leadership that affected the organisation because the Bank’s staff felt that there was pressure to lend for any project, especially as McNamara could justify lending for projects with statistics. This fundamental change in the institution meant that it was no longer concerned with the quality of the projects across the world and the millions of lives that the World Bank affected; these original intentions were being undermined. The strength of this argument is only emphasised in the two case studies. Therefore, the weakness of this argument is: is it fair to fundamentally say that the quality of projects was constantly overlooked throughout the whole organisation during his presidency? Arguably it seems yes, according to Ayres, because there was a running tension throughout McNamara’s
  • 32. PIR-30086 - Researching and Dissertation Writing in Politics and International Relations . Student no. 0800 2751 01 Page | 26 presidency; how to move a lot of money throughout the Bank on the behalf of poverty alleviation (1983, p.10). However, Ayres counters this by quoting from interviews with officials in the World Bank; they stated that the World Bank is a bank first and development agency second (1983, p.10). Nevertheless, one can never test the validity of that statement. In the case of Robert McNamara, it is fair to say that the troubles arose from him, which is reinforced by critical evidence published by World Bank staff members. It is fair to say that projects did have shortcomings because of his top-down leadership approach and not because of the organisation itself. Shapley (1991) argued that McNamara could have instructed the World Bank to do his will but he created so much fear within the organisation that the problems with his projects never reached him. When it came to the PIDER programme, it was arguably not surprising that this top-down model was transferred onto the development project. Whilst conducting research for this dissertation, it has been difficult to completely grasp all the problems that arose from the two programmes because of the lack of information on some crucial aspects of this subject. As material publication on these topics is not so widespread, it has been harder to critically analyse it. Therefore, further research will be needed to determine whether the causes of the weaknesses stemmed from the World Bank or from the Mexican government. However, what is clear regarding the PIDER project is that the Bank declared it unsatisfactory because of cost overruns. POLONOROESTE was considered unsatisfactory by the World Bank due to the environmental problems that occurred. Did that mean McNamara, who was praised for his intellect, did not understand the effects that had lead to these problems within the projects? McNamara, it seems, was very good at counting the cost of human lives, yet he could not physically and emotionally understand the lives he was trying to help. Hence, being detached from their involvement, the World Bank implemented models in both the PIDER and POLONOROESTE programmes that overall achieved the same outcome – of not truly being successful.
  • 33. PIR-30086 - Researching and Dissertation Writing in Politics and International Relations . Student no. 0800 2751 01 Page | 27 Yet, ironically, the organisation was too afraid to admit failure because McNamara was afraid to admit failure himself; he was a man who wanted perfection ever since his years at university. The conclusion of this thesis is that Robert Strange McNamara was a man of great intellect and power, yet he could not truly communicate his objectives throughout the World Bank. Therefore, as leader, he fundamentally set the wrong objectives in trying to achieve his aims and did not fully realise the consequences of his power.
  • 34. PIR-30086 - Researching and Dissertation Writing in Politics and International Relations . Student no. 0800 2751 01 Page | 28 Bibliography Ayres, R (1983) Banking on the poor; The World Bank and World Poverty. Cambridge: MA. Bare, J. (1998). Of loans and Results: Elements for a chronicle of Evaluation at the World Bank. Human Organization , 319-25. Beenhakker, H (1979). Identification and appraisal of rural roads projects. Washington, DC: World Bank. Bergsman, J (1980). Income Distribution and Poverty in Mexico. Washington, D.C.: World Bank. Browder, J., Pedlowski, M and Walker, R. (2008). Revisiting Theories of Frontier Expansion in the Brazilian Amazon: A Survey of the Colonist Farming Population in Rondonia’s Post-frontier, 1992–2002. World Development. 36 (8), 1469-1492. Cernea, M.M (1979). measuring project impact : monitoring and evaluation in the pider rural development project Mexico.. Washington, D.C: World Bank. Cernea, M.M (1983). A social methodology for community participation in local investments: The experience of Mexico's PIDER Program. Washington, D.C: World Bank. Cernea, M.M., (1992). The Building Blocks of Participation: Testing Bottom-Up Planning, World Bank - Discussion Papers 166, World Bank. Cockcroft,J., (1983). Mexico. New York: Monthly Review Press. Coes, D. (1995). Macroeconomic crises, policies, and growth in Brazil, 1964-90. Washington, D.C: World Bank Publications. Cultural Survival (2011) World Bank Holds Funds for Development Project in Brazil. Available:http://www.culturalsurvival.org/publications/cultural-survival- quarterly/brazil/world-bank-holds-funds-development-project-brazil. Last accessed 25 Dec 2010. Fox, J., (1994). The Difficult Transition from Clientelism to Citizenship: Lessons from Mexico. World Politics. 46 (2), 151-184. Frelastre, G. (1985). Tiers Monde. Successes and failures of the Polonoroeste Integrated Development Program in Brazil. 26 (104), 900-20. George, S and Sabelli, F (1994). Faith And Credit: The World Bank's Secular Empire. Boulder, Colorado: Westview Press.
  • 35. PIR-30086 - Researching and Dissertation Writing in Politics and International Relations . Student no. 0800 2751 01 Page | 29 Gilbert, C and Vines, D (2000). The World Bank Structure and Policies. Cambridge: Cambridge University Press. Gouldner, A (1954) Patterns of Industrial Bureaucracy New York: Free Press. Goulet, D., (1983). Mexico Development Strategies for the future. Indiana, USA: University of Notre Dame Press. Halberstam, D (1974). The Best and The Brightest. London: Pan Books LTD. IBRD (1975) Rural Development Sector Policy Paper. Washington D.C: The World Bank. Kapur, D., Lewis, J., & Webb, R. (1997). The World Bank its First Half Century volume 2: Perspectives. Washington, D.C: The Brookings Institution. Kapur, D., Lewis, J., and Webb, R., (1997). The World Bank: History. Washington, D.C: Brookings Institution Press. Kraske et al (1996) Bankers with a mission: the presidents of the world bank, 1946-91. Oxford: Oxford university press. Laar, A (1980). The World Bank and the poor. London: Martins Nijhoff Publishing. Lele, U., (2000). Brazil: forests in the balance : challenges of conservation with development. World Bank Publications. Lewis, J and Kapur, I (1973). The World Bank Group, Multilateral Aid, and the 1970s. London: Lexington Books. Mahar, D.J. and C.E.H. Ducrot (1998) Land-use zoning on tropical frontiers: emerging lessons from the Brazilian Amazon. World Bank. Marx, K and E, Friedrich (2009). The Communist Manifesto. Middlesex: The Echo Library. Mason, E.S and Asher, E (1973): The World Bank Since Bretton Woods. Washington: The Brookings Institution. McNamara Robert, (1973). One hundred countries, two billion people. London: Pall Mall Press. Morawetz, D. (1977). Twenty-Five Years of Economic Development 1950-1975. Baltimire: Johns Hopkins University Press. Nelson, P. (1995). The World Bank and Non-governmental Organisations. New York: St. Martin's Press. Payer, C. 1982 The World Bank A Critical Analysis. New York: Monthly Review Press.
  • 36. PIR-30086 - Researching and Dissertation Writing in Politics and International Relations . Student no. 0800 2751 01 Page | 30 Reid, E. (1973). McNamara's World Bank. Foreign Affairs. 51 (1), 794-811. Rich, B., (1995). Mortgaging the Earth: The World Bank, Environmental Impoverishment, and the Crisis of Development. Boston: Beacon. Robbins, S (1990). Organisation theory, structure, design and applications. 3rd ed. New Jersey: Prentice Hall. Rovani, Y. 1988 Rural development World Bank experience 1965-86 Washington, D.C: The World Bank. Shapley, D (1993). Promise and Power The Life and Times of Robert McNamara. London: Little, Brown and Company. Toussaint, E (2008). The World Bank A Critical Primer. London: Pluto Press. Toussaint, E. (2005). Your Money [or] Your Life The Tyranny of Global Finance. Chicago, Illinois: Haymarket Books. Weaver, C. (2008). Hyprocrisy Trap: The World Bank and the Poverty of Reforms. Princeton, New Jersey: Princeton University Press. Weber, M., Gerth, H and Mills, C (1946). From Max Weber: Essays in sociology.. New York: Oxford University Press. World Bank (1979) Integrated Development of Northwest Frontier. Washington, DC: World Bank Publications. Word count: 8 725