1 International Development Strategy for the Second United Nations Development Decade, G.A. Res. 2626, 25 U.N. GAOR Supp. (No. 88), U.N. Doc. A18028 (1970).

2 IMF, WORLD ECONOMIC OUTLOOK, 5 (1981) [hereinafter cited as 1981 World Econ Outlook].

3 L. HACKER, THE COURSE OF AMERICAN ECONOMIC GROWTH AND DEVELOPMENT 236 (1970); C. HESSION & H. SARDY, ASCENT TO AFFLUENCE: A HISTORY OF AMERICAN ECONOMIC DEVELOPMENT 159-60, 533 (1969).

4 U.S. DEP't OF THE TREASURY, UNITED STATES PARTICIPATION IN THE MULTILATERAL DEVELOPMENT BANKS IN THE 1980s 142 (1982) [hereinafter cited as MDB Report].

5 Poor Nations Manage Their Big Debt Loads Better Than Expected, Wall St. J., Jan. 7, 1982, at 1, col. 6.

6 1981 World Econ Outlook, supra note 2, at 59.

7 Id. at 134.

8 Algeria, Argentina, Brazil, Indonesia, Israel, Korea, Mexico, the Philippines, Spain and Yugoslavia. Id. at 166.

9 Poor Nations Manage Their Big Debt Loads Better Than Expected, Wall St. J., Jan. 7, 1982, at l , c o l 8 .

10 See, e.g., P. BAUER, EQUALITY, THE THIRD WORLD, AND ECONOMIC DELUSION 97,105,133 (1981); see also T. SCHULTZ, INVESTING IN PEOPLE: THE ECONOMICS OF POPULATION QUALITY 123 (1981).

11 MDB Report, supra note 4, at 160; see also id. at 54.

12 Id. at 77.

13 There has been some shift during the past decade in the percentages of MDB lending in different sectors and for different types of projects. For instance, the agricultural sector is now the largest target of World Bank and IDA lending, whereas transportation and power accounted for two-thirds or more of all Bank Group lending until the late 1960s. See MDB Report, supra note 4, at 14; E. MASON & R. ASHER, THE WORLD BANK SINCE BRETTON WOODS 200 (1973); 1981 WORLD BANK ANNUAL REPORT 12-13. Even the agricultural lending, however, includes a large dose of infrastructure development, such as irrigation and drainage. See 1981 id. at 186. Power and transportation continue to account for about one-third of all Bank Group lending.

14 MDB Report, supra note 4, at 67.

15 Id. This approach was also emphasized by Treasury Secretary Donald Regan in his address at the 1981 Bank/Fund Annual Meeting: The U.S. “comprehensive economic program … rests on the fundamental premise that market mechanisms and individual effort, operating with a minimum of governmental impediments, are the driving forces behind sustainable economic growth.“

16 MDB Report at 68 (emphasis not added).

17 E. MASON & R. ASHER, supra note 13, at 371-72; 378-79. See also the discussion of the World Bank-commissioned Pearson Report in A. SAMPSON, THE MONEY LENDERS 99 (1982).

18 A. SAMPSON, THE MONEY LENDERS, supra note 17, at 90.

19 See, e.g., the series of articles on Economic Development and the Private Sector, in the Bank/ Fund publication, 18 & 19 FINANCE & DEVELOPMENT (Sept., Dec. 1981; and Mar. 1982). See also the supplement to IDB NEWS (a publication of the Inter-American Development Bank), entitled Private Enterprise: Engine for Growth, IDB EXTRA (Mar. 1982).

20 See, e.g., Marsden, Supply-Side Policies Are in Vogue in Third World, Too, in WORLD BANK REPORT 5 (Sept.-Oct. 1981).

21 See testimony of M. Peter McPherson, AID Administrator, before the Subcommittee on Trade, Productivity and Economic Growth of the Joint Economic Committee, October 19, 1981, reprinted in STATE DEPARTMENT CURRENT POLICY, No. 329 (1981).

22 E. MASON & R. ASHER, supra note 13, a t 371-72.

23 See U.S. DEP't OF THE TREASURY, AN EXAMINATION OF THE WORLD BANK ENERGY LENDING PROGRAM, ii, 32-33 (July 28, 1981).

24 h. HACKER, supra note 3, at 184-85; A. SAMPSON, supra note 17, at 101.

25 IMF Survey 49, 58 (Feb. 22, 1982).

26 Schultz, Economic Effects of the Defense Budget, 18 THE BROOKINGS BULL. 4 (Fall 1981).

27 Novak, Why Latin America Is Poor, 249 ATL. MONTHLY 66, 68 (March 1982).

28 E. MASON & R. ASHER, supra note 13, at 468.

29 M. at 443-45.

30 Id. at 432.

31 Landell-Mills, Structural Adjustment Lending: Early Experience, 18 FINANCE & DEVELOPMENT 17 (Dec. 1981).

32 Id. at 18.

33 MDB Report, supra note 4, at 177.

34 E. MASON & R. ASHER, supra note 13, at 18.

35 Article I says: “The purposes of the Bank are: … (ii) To promote private foreign investment by means of guarantees or participations in loans and other investments made by private investors; and when private capital is not available on reasonable terms, to supplement private investment by providing, on suitable conditions, finance for productive purposes out of its own capital, funds raised by it and its other resources.“

36 MDB Report, supra note 4, at 4 (Table 1.2), citing OECD, 1980 DEVELOPMENT ASSISTANCE COMMITTEE REPORT.

37 Nowzad & Williams, External Indebtedness of Developing Countries, IMF OCCASIONAL PAPER No. 3 at II (May 1981)

38 Id. at 8.

39 Remarks of R.T. McNamar on The Future Role of the World Bank, a conference sponsored by The Brookings Institution 8-9 (Jan. 7, 1982). In 1981, 18 out of 79 cofinanced projects involved commercial banks, with the amount of private cofinancing reaching SI.7 billion. This compares with 5 projects out of 73 in 1976 ($272 million) in private cofinancing. Id. at 8.

40 Anthony Sampson goes farther, alleging that private bank loans involve “wastage on a far greater scale than the most incompetent aid agency could have dreamt of.” A. SAMPSON, supra note 18, at 313.

41 MDB Report, supra note 4, at 84,130. See also the Brandt Commission Report, NORTH-SOUTH: A PROGRAM FOR SURVIVAL 247 (1980).

42 Article III, Section 4. Guarantees would count the same as a loan insofar as determining the limit on Bank lending operations set forth in Article III, Section 3 (100 percent of unimpaired subscribed capital, reserves and surplus). This is one reason for lack of use of the guarantee power. For others, see E. MASON & R. ASHER, supra note 13, at 107.

43 T. SCHULTZ, supra note 10, at 142.

44 See, e.g, the address by Robert D. Hormats, Assistant Secretary of State for Economic and Business Affairs, before the Economic Policy Council of the United Nations Association in Washington, D.C., September 18, 1981, U.S. DEPT. OF STATE, CURRENT POLICY No. 316.

45 See note 7 supra.

46 These suggestions were made in a speech by Mr. Clausen to the Brookings Institution Conference on “The Future Role of the World Bank.” They echo earlier suggestions made in Mr. Clausen's speech to the Bank/Fund Annual Meeting.

47 E. MASON & R. ASHER, supra note 13, at 342-44.

48 Id. at 339.

49 See, e.g., D. WALLACE, INTERNATIONAL REGULATION OF MULTINATIONAL CORPORATIONS (1976).

50 E. MASON & R. ASHER, supra note 13, at 345.

51 MDB Report, supra note 4, at 79.

52 IMF SURVEY 105 (Apr. 5, 1982). Under Bank/IDA guidelines, GNP of $;1,000 at 1970 prices ($2650 in 1980 dollars) triggers ineligibility for Bank lending; graduation takes place normally five years after this level has been reached. Id. In the past the Bank's guidelines have been only loosely applied, according to the MDB Report, supra note 4, at 73.

53 Brandt Commission Report, supra note 41, a t 291. The average contribution of industrialized countries was 0.35 percent of GNP in 1978; the United States contributed 0.27 percent. Id. at 224- 25.

54 U.S. contributions to IDA VI have been spread out over four years, with smaller contributions forthcoming in the first years. As a result, IDA resources have been reduced, from $ 4.1 billion available in FY 1981 to $ 2.6 billion in FY 1982. IMF SURVEY 105 (Apr. 5, 1982).

55 MDB Report, supra note 4, at 85.

56 /d. at 89.

57 See remarks in Future Financing of the World Bank: Some Issues, 19 FINANCE & DEVELOPMENT 7-8 (Mar. 1982).

58 MDB Report, supra note 4, at 86.

59 MDBs provided 6.9 percent of the total net receipts of LDCs in 1979. See id. at 4.

60 Nowzad, Debt in Developing Countries: Some Issues for the 1980s, 19 FINANCE & DEVELOPMENT 13, 15 (Mar. 1982).

61 These policies are discussed at length in a series of articles on conditionality by Manuel Guitian, in the December 1980, March 1981 and June 1981 issues of 17 & 18 FINANCE & DEVELOPMENT. See also Gold, Conditionality, IMF PAMPHLET SERIES No. 31 (1979).

62 See, e.g, his remarks to the International Institute, Washington, D.C., on December 17, 1981 (U.S. Treasury press release).

63 Id. at 15.

64 See, e.g. the speech by Jacques de la Rosiere, Managing Director of the Fund, in IMF SURVEY 101 (Apr. 5, 1982); 1981 World Econ. Outlook supra note 2, at 17; Nowzad, supra note 60, at 15.

65 See Gold, supra note 61, at 22.

66 Pringle, Reaganomics Enters the Fund, 131 THE BANKER, 89, 90 (Sept. 1981)argues that SDRs are overemphasized, and that the Fund cannot control international liquidity, since any country with access to capital markets can “create” liquidity by issuing liabilities in dollars or other convertible currencies.

67 See, e.g., Bird, Developing Country Finances, Present and Future, FUTURES 191, 202 (June 1981). This approach to development finance was criticized by E BAUER, supra note 10, at 151.

68 Pringle, supra note 66, at 90.