ABSTRACT
Reconstruction had some priority over development, although the Bank’s contribution to reconstruction in Europe was minor compared to the Marshall Plan. The lending criteria,2 however, did not change: they were based on rather conservative market-economy and growth-oriented principles like sound financial returns on invested capital, the creditworthiness and economic performance of the borrower countries, their absorptive capacity, and the fact that no other sources of external finance were available to the borrower on reasonable terms. Many developing countries experienced a nonlinear growth path, leaving out one or another of Rostow’s stages; others simply had not reached “self-sustained growth.” On an international level, the Green Revolution was one of the most striking examples of the failure of the trickle-down theory: while agricultural output was actually increased and already privileged farmers were able to take full advantage of the external support offered, tenants were evicted, landless laborers lost their jobs, and farmers on nonirrigated land suffered greater hardship.
