Introduction

Almost all commentators note the multiplicity of the World Bank's functions and objectives. Oliver's (1971, 1975) accounts of the Bretton Woods and subsequent negotiations demonstrate differences of opinion, both between the Americans and the British, and also within the US administration itself, about what the World Bank should do, going back to the very origins of the organisation. Gavin and Rodrik (1995: 329) state that the debate surrounding its creation was about what it should do, not just how it should do it. Naïm (1994) accuses the current structure of generating goal congestion. We argue that the World Bank's strength arises from complementarity among these functions, and that conditionality is the cement that generates this complementarity. We see the World Bank's objectives as being closely aligned with the interests of borrowing countries, and view Bank conditionality, which we interpret in a broad sense, as a mechanism for helping governments realise some of these objectives. We suggest that this view of conditionality meshes well with the ‘Comprehensive Development Framework’ or CDF approach to development assistance which the Bank is now promoting.

The World Bank: a functional analysis

The World Bank is a large and complex organisation comprising a set of imprecisely focused institutions with overlapping responsibilities. It may be analysed in terms of these institutions or alternatively in terms of the economic functions it fulfils. In this chapter, we focus on the Bank's functions and ignore the institutional embodiments of these functions that we have discussed in Gilbert et al. (1996).