False Prophecies

The Bank’s culture weighs on and inhibits its capacity to change. Yet change is crucial if the Bank is to avoid continual false prophecies with increasingly grievous consequences for the countries under its tutelage. If the Bank is not obliged to quit the unassailable, non-market, self-legitimated terrain for a secular, legally regulated, market-sanctioned and political one, and if past experience is any guide, it will continue to make false prophecies. The Bank’s advice to its borrowers is different for several reasons. Developing countries are captive subscribers to its ‘newsletter’ of economic predictions. In 1992, the Bank’s then Chief Economist, Lawrence Summers, in an article written jointly with the Chief of the Debt and International Finance Division in the Bank’s International Economics Department, listed in a ‘spirit of humility’ ten key lessons of the debt crisis. The Bank’s International Economics Department regularly prepares commodity price projections.