Friday, May 29, 2009

The Aid Industrialists And Their Bastards

In a column in Financial Times, Mo Ibrahim, one of the few respected tycoons in Africa, identifies bad governance as a key impediment to nation-building. He is particularly critical of the role of the IMF and the World Bank. He suggests that they merely grant loans according to their mantra: "He may be a bastard, but he is my bastard." There is absolutely no issue of transparency and accountability.

Economic and political elites readily embrace the toxic policies advocated as the bubbles created boost wealth draining. We have here all the elements of thriving crony capitalism. Now, imagine the impact of opening a World Bank office to drive domestic policies. There's a handful of winners, including apparatchiks and useful idiots, but plenty of casualties.

Simon Johnson, a professor at MIT's Sloan School of Management and former chief economist at the IMF, provides us with the modus operandi of the "winning formula" in The Quiet Coup. Unmissable.

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