Friday, October 23, 2009

The World Bank funds many types of projects, especially after its expansion, which allowed The Bank to take a more comprehensive approach to development outside of physical infrastructure and economic restructuring. With strong roots based in economic development projects and basic infrastructure it could be easily assumed that World Bank projects tends to favor these types of projects. The table below provides a breakdown of the all the projects listed in the World Bank project database, available on their website.



* Project types are defined as follows:
1: Transportation Infrastructure (Roads, Rail, Maintenance)
2: Other Infrastructure (Electricity, Telecommunications, Oil, Gas)
3: Social Infrastructure (Education, Health, Judicial Reform, Land and Social Reform)
4: Economic (Development Projects, Agriculture Projects, Privatization Policies)
5: Other (Environmental Problems, Structural Readjustment Funding, Misc.)

What is clear from the World Bank data is that transportation infrastructure projects are typically under proposed in comparison to the other active and completed projects in the CIS. With only 5.6% of projects being in the transportation infrastructure column and 19.1% of projects being related to social infrastructure it is clear where the World Bank stands on project preferences. Although there is still a large support for economic and infrastructure projects when grouped together, transit infrastructure is clearly taking up a smaller portion of project budgets. While the financial obligation to transportation infrastructure projects could be assumed to be higher, many of the economic and social programs are equally costly and have less measurable success rates. The World Bank project database lists project dates back to the early 1990s and has many projects in the database that do not have an attached date. The table above is representative of all the projects that are recorded in the database, as well as the main funding mechanism as allocated by the World Bank. The difference between the IBRD and the IDA in terms of the types of projects they fund is hard to see, and the distinction is usually made by the GDP of the nations borrowing as opposed to the original purpose of the agencies.

Although all projects approved by the World Bank seem to have to fall under one of the eight United Nations Millennium Development Goals (UNMDG), the amount of environmental projects, specifically related to reintroducing or sustaining biodiversity seems an odd match for an organization trying to combat poverty and promote development first. A large majority of the category five projects full under forestry, biodiversity, or other environmental programs. If transportation is really as successful in creating new markets, lowering transaction costs, and creating development that will trickle-up into GDP, it is curious why more projects are not geared toward transportation infrastructure.

What is not taken into consideration in the World Bank project list is bilateral (government to government) loans and private investment. Although this type of funding is also critical to development it is outside the initial scope of this paper which is to provide some background on World Bank funding of the projects that it was originally mandated to do. Since the World Bank and IMF both tend to represent international sentiments of development and lending due to their large nation membership and weighted voting scheme, it could be assumed that the World Bank is more representative of the climate for international lending for governments and other international organizations.

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