Patricia Adams, Odious Debts Online
September 25, 2007

The U.S. Senate is, once again, demanding more anti-corruption reforms at the World Bank before it hands over American tax dollars to keep the institution afloat.

The Bank has been put on notice through provisions in the Senate’s foreign operations appropriations bill, that 20% of U.S. funds to the Bank’s interest free arm (the International Development Agency) will be withheld until it is assured that: the Bank has adequately staffed and sufficiently funded the Department of Institutional Integrity, and that the Bank conducts, and discloses to the public, independent audits of internal management controls and procedures. The bill [PDF] [anotherPDF here] also demands that the Bank make publicly available “financial disclosure forms of all senior World Bank personnel.”

“Now, that will get the bureaucracy’s attention,” predicts a Wall Street Journal editorial.

The Journal points out that a Democrat – Evan Bayh of Indiana – has taken the lead on this issue. Senator Bayh’s amendment, ordering the Government Accountability Office (GAO) assessment of the effectiveness of International Development Association programs to alleviate world poverty in light of the susceptibility of international aid programs to corruption and graft by foreign governments, was adopted with a unanimous vote by the Senate on Sept. 6.

“The motto of the World Bank is ‘working for a world free of poverty,’ but there is a real question as to whether the Bank, as currently constituted, is an effective instrument for alleviating poverty,” said Senator Bayh in his press release. “Bank officials are too willing to accept corruption as just another cost of doing business in certain countries.”

As he told the Journal, “There’s a tendency [at the bank] to say ‘just give us the money and go away’… Until there are some tangible consequences, they won’t take us seriously. We shouldn’t let that happen.”