Congresswoman Gwen Moore, the Ranking Member of a key subcommittee of the House Financial Services Committee, used a hearing on the International Financial Institutions (IFIs) on Wednesday to raise concerns about how the U.S. is exercising leadership at the World Bank to strengthen its accountability system. In questions directed at David Malpass, Under Secretary for International Affairs, Moore expressed disappointment with the recent failure of the World Bank Board of Directors to approve three important new functions to the Inspection Panel’s toolkit—in particular a post-investigation monitoring function, the lack of which she described as a “key weakness.”
Malpass responded by agreeing with Moore on the importance of the Panel, and stating that the reforms under review—including adding a dispute resolution function and extending the time eligibility for complaints, as well as monitoring—should be adopted. However, he expressed frustration with Bank management’s opposition to the changes, as well as the difficulty in getting other influential donor countries on the Board to support them. Moore urged him to share his “concrete plans" to "break the deadlock” and reminded him that, “Without a major Bank shareholder like the U.S. backing reform proposals in a serious committed way, they are allowed to languish without resolution.” She added, "I want the U.S. to step up and take the role that a major shareholder ought to take...It's a leadership problem."
Moore also noted that the Bank’s Board has extended the deadline to consider the proposed reforms to April 2019. The new time frame is notable for its likelihood to overlap with the Committee’s consideration of a U.S. contribution to a $13 billion capital increase for IBRD, the middle-income lending arm of the World Bank, which will nearly double its annual lending capacity by 2030. Congress still has to sign off on the deal, and the House Financial Services Committee will have an important role to play through its authorizing authority of IBRD capital increases.
Accountability at the World Bank has been a priority for the House Financial Services Committee for over two decades. Since the early 1990s, the Committee has used its oversight and authorization authority to highlight the need for a stronger accountability system at the World Bank. Established with the help of the Committee in 1994, the Panel was the first of its kind among IFIs. Moore described the significance of the Panel’s creation at the hearing, saying, “the World Bank became the standard bearer for democratic accountability at the multilateral development institutions.”
Last year, the Committee held a hearing solely devoted to this issue entitled, “Examining Results and Accountability at the World Bank” where BIC's Executive Director, Elana Berger, testified to the impact of the Panel’s involvement in holding the Bank accountable for negative impacts of a road project in Uganda. At that hearing, Berger also pointed out the importance of U.S. leadership in supporting the accountability system, stating, “But for the U.S. government’s leadership, there is no guarantee that some of the most important reforms at the Bank, such as the creation of the Panel, would have ever happened.”
In the years since the Inspection Panel was created, other IFIs have adopted similar mechanisms with functions such as monitoring and dispute resolution with great success—offering more tools for people impacted by projects, and more effective oversight by the Boards of Directors. We hope that the U.S. and all member countries that aim to promote a robust accountability system at the Bank will agree that adopting these reforms is the way to ensure that it is once again at the forefront of accountability, as Congresswoman Moore rightfully pointed out.
"Without a major Bank shareholder like the U.S. backing reform proposals in a serious committed way, they are allowed to languish without resolution"