The policy models of theWorld Bank
The story of the Bank’s activities on rule of law projects can be told by situating
them within the main development models of the Bank in three different
periods. The first period, that of “structural adjustment,” goes from 1980 to
1990. The second period, which witnesses the emergence of “governance”
runs from1990 to 1999. The last period, from1999 onward is one of “comprehensive
development.” These three periods attest to the changes in thinking
about economic development. Broadly speaking, they encompass the rise
and fall of neoliberal thinking, or the so-called Washington Consensus, and
the subsequent move to an “enlightened”Washington Consensus, mediated
by a decade of profound reforms and severe crisis. These periods provide
the framework of theWorld Bank’s engagement with the ROL, facilitating an
analysis of the ROL rhetoric in conjunction with changes in development
thinking and policy models.
“Structural adjustment” was a period of market shock and trade liberalization.
In the midst of the debt crisis in the beginning of the 1980s the Bank
started a lending practice that made disbursements conditional upon the
implementation of reform programs in macroeconomic and financial management.
44 The Bank’s involvement in reforming developing countries’ laws
and legal systems predates the introduction of the notion of the rule of law in
theBank’sprojects.Thenotion of the “rule of law”wasnot partof the development
strategy and was thus absent fromreformproposals.However, theBank
assisted borrowing countries in a wide variety of legal changesdeemednecessary
to implement the macroeconomic policies agreed to as part of structural
adjustment loans. Legal reformswere thus a condition for loan disbursement.
Theywere narrowly tailored to introduce fiscal reform, ending exchange-rate
controls, liberalizing trade, securing property rights, ending subsidies, and
privatizing state-owned enterprises.45