The World Bank and the origins of the Washington Consensus: negotiating the imperatives of American finance

Appleton, Samuel James (2015) The World Bank and the origins of the Washington Consensus: negotiating the imperatives of American finance. Doctoral thesis (PhD), University of Sussex.

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The literature on the World Bank in neoliberal governance tends to assume that its strategies are largely shaped by the objectives of the US. The hegemony of neoliberalism as a political paradigm in the US is conventionally considered to be expressed in the Bank as the ‘Washington Consensus’. The structural adjustment loan is the medium through which the Washington Consensus is extended to the realm of ‘development’. Yet structural adjustment lending was developed before the neoliberal paradigm became hegemonic in the US, in the service of Bank policy objectives which did not express the tenets of the Washington Consensus. The tendency of critical accounts to ignore this disjuncture and adopt the Washington Consensus narrative suggests that they take the Bank’s capacity to enact US objectives for granted. My central claim in response to this is that the Bank has never been a passive recipient of the American hegemonic agenda.

I articulate this argument at two levels of analysis. Firstly, I draw upon Constructivist accounts in arguing that the agency of management was crucial in creating an organisational structure which allowed the Bank to meet the imperatives associated with the development of its operations. The process of developing a viable organisational structure allowed management to carve out a proprietary terrain in which their agency is decisive in constructing the tools and strategies of governance. However, I move beyond the Constructivist tendency to de-contextualise managerial agency, by arguing that management’s strategic choices are socially anchored in the infrastructure of American financial capital.

Secondly, I argue that the social basis of the Bank in private American finance means its relationship with the US is defined by its imperative as an institution: is to secure access to the uniquely deeply capitalised US financial system. In pursuing this institutional imperative, the Bank’s agenda has become increasingly intertwined with US objectives. However, the parameters of its capacity to act are set by the basis of its operations in private US finance.

On this basis, I offer a revisionist history of development of Bank’s structure and lending practices at four critical moments from the 1930s to 1980s, which leads me to cast the turn to neoliberal governance in a new light. Firstly, I explore the enlistment of US financiers in support of the Bank at Bretton Woods. Secondly I illustrate how the Bank’s imperative of capitalisation crystallised as it began lending. Thirdly, I demonstrate how management’s pragmatic negotiation of the Bank’s institutional imperative shaped the technology of governance during the Bretton Woods era. Finally, I present the origins of structural adjustment lending in McNamara’s strategic renovation of the Bank’s institutional structure and lending practices in order to render pro-poor lending strategy legible to US financiers. Structural adjustment was not an artefact of American power, but was rooted in management’s pragmatic negotiation of the imperatives which followed from the social anchoring of the Bretton Woods order in the unique infrastructure of American finance.

Ultimately I will show that American hegemony cannot be understood without the agency of the Bank.

Item Type: Thesis (Doctoral)
Schools and Departments: School of Global Studies > International Relations
Subjects: H Social Sciences > HG Finance
H Social Sciences > HG Finance > HG1501 Banking
Depositing User: Library Cataloguing
Date Deposited: 18 Jun 2015 09:54
Last Modified: 22 Jun 2017 10:04

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