chapter  12
22 Pages

With friends like these: can multilateral development banks promote institutional development to strengthen the rule of law?

ByLINN HAMMERGREN

Although multilateral development banks (MDBs) entered late into judicial reform activities, they are frequently credited with initiating the movement and driving it toward a pro-business outlook. This chapter contests these arguments and goes on to question how effective the MDBs can be in leveraging the changes needed to improve the rule of law, however defined. The MDBs’ business model (loans to governments, designed and managed at long distance) severely constrains their ability to produce institutional change, forces them into an emphasis on infrastructure, equipment and the occasional new law, and makes it nearly impossible for them to monitor results and introduce mid-course corrections. However, the apparent innocuousness of their contributions may also be overstated. Financing buildings, equipment and training for a politicized, incompetent and possibly corrupt court or other sector institution may eliminate the incentives for more fundamental improvements to their operations.