Visiting Scholar Adam  Lerrick

When the World Bank convenes 185 member nations for its annual meeting in Washington this weekend, it will face a wider audience grown weary of a monologue that is all process and no performance.

At the top of the agenda is the big check the industrialized world will write next year to fund the International Development Association (IDA), the arm of the bank that focuses on 80 of the globe's most underprivileged countries. The $30 billion price tag for the 2008-2011 cycle has almost doubled, as the first $10 billion installment comes due on a G-7 government promise to pick up the tab for the bank's long concealed bad loans.

The rubber stamp from rich donor nations that the bank considers its birthright should not be forthcoming without conditions that dismantle a cover-up culture and prevent more multi-billion dollar failures in the same poor places.

As globalization transforms the world economy, the bank's comparative advantage is gone and its role diminished. There are new competitors without the bank's social wish list. Private capital now channels three hundred times bank funding to the emerging world. Sovereign wealth funds from Singapore to Abu Dhabi are searching for profit in remote places. A groundswell of private giving is taking on the task of aid basics.

Nations moving up the economic ladder are weakening the bank's hold. China, Brazil, India and Russia are funding infrastructure and industry for even the poorest countries, to lock in access to raw materials and export markets. China alone will send $25 billion to Africa over the next three years, 50% more than the funds coming from the bank. Bank staffers label these latest lenders "rogue creditors."

But is the world instead dealing with a rogue institution? While presidents come and go, a bureaucracy, hostile to change and clever at manipulating an unwieldy multinational board, is flouting the bank's founding articles, distorting the facts, concealing losses, lowering standards and now planning to take on new risks. The bank is desperate to "remain relevant" to middle-income countries that no longer need its money and do not want its advice.

The bank does not, as it claims, lend where the poor live. More than half of loans since 2000 flowed to six upper-middle-income nations which tally less than 5% of the developing world's hard-core needy. For the creditworthy countries the bank courts, the private sector will underwrite any pro-poor project the bank would consider. Far from generating a surplus for the poorest, fees and interest on middle-income lending now fall $500 million a year short of the bank's cost of doing business. The $2 billion return on the bank's $40 billion of zero-cost capital masks the loss.

What do we know about bank lending to the poor and what doesn't it want us to know?

We know that after 60 years and $600 billion, almost all of the 500 million people who have risen above the poverty line in the past 25 years can be found in China, India and Indonesia, whose impressive economic gains have little to do with bank aid.

We know that, for two decades, the bank poured money into poor countries clearly unable to repay. Worthless loans were repeatedly rolled over until a public outcry for debt relief forced G-7 governments to make the bank whole in 2005.

We know lending to the neediest has been hijacked by corrupt regimes as the bank looked on.

We know that, by its own numbers over the 1990-99 decade, 59% of investment programs world-wide and 80% in Africa failed to achieve satisfactory long-term results.

Before handing over, for the 15th time, still another IDA replenishment, we need to know more, and should not be deterred by claims of confidentiality or cries about the cost and complexity of documentation. The bank's internal Independent Evaluation Group is captive and its findings suspect. Calls for an external performance audit have been stonewalled. Governments that borrow are equally content to leave failure and its causes in the shadows.

Transparency and accountability are close at hand on the Internet. For every one of the 300 projects undertaken each year, there exist detailed reports in electronic form ready to be delivered for Web-based publication. Project objectives, technical specifications and costs are all laid out in loan approvals. Progress and completion reports follow the lives of programs.

Ghanaian parents will see if schools are really built and their children learn to read. Zambian farmers will measure the miles of roads ready to carry their produce to market. Political watchdogs will know if funds and equipment have been spirited away. The world will become the independent evaluator of the World Bank, as a universe of activist shareholders keeps count every step of the way.

Adam Lerrick is a visiting scholar at AEI.