ABSTRACT
During the first two decades of its existence, the World Bank had a very narrow focus within Third World development, with most of its funding directed toward transportation and public utility projects, especially electricity. By the late 1960s, however, in response to internal and external forces, the Bank’s development programs became more socially oriented. The aim of this chapter is to identify the trends and transitions in the Bank’s development philosophy in order to understand how and why the institution embraced urban lending in the 1970s. This chapter is divided into three parts. The first section discusses the development philosophy behind the World Bank’s early loan programs. The second part examines how multilateral and bilateral development institutions, and eventually the World Bank, came to recognize social concerns in developing countries. This reorientation influenced the Bank to re-examine its hands-off attitude toward funding urban development programs. Finally, Robert McNamara’s presidency (1968-81) is discussed in some detail, as those years deeply influenced the Bank’s thought and action pertaining to urban issues; the Bank’s urban programs emerged from the initiatives undertaken during the McNamara presidency.
