Policies of the Great Depression.

Ethiopia's story is repeated throughout sub-Saharan Africa, which today owes some $39 billion to а World Bank. In Nigeria, 42,000 people were forcibly evicted to make way for the Kainji dam; in Zaire, 12,600 were moved for the Ruzizi II dam; and in Ghana, 80,000 lost their homes to make way for the Akosombo dam and what became the largest human-made lake in the world, Lake Volta. But again, the cost and misery caused by these dams did not end with the closing of the floodgates.

The population that remained around Lake Volta, for example, became infected with bilharzia, а debilitating disease spread by а snail that thrives in large bodies of still water. Such destruction in the wake of these World Bank projects was inevitable. Despite the best of intentions, the World Bank was set up to exercise financial power without liability and political power without responsibility.

Its loans — free from public-sector scrutiny and private-sector discipline — and its triple-А credit rating — the result of political commitments rather than prudent investments — have allowed the bank to finance money-losing enterprises that can only be defended by invoking exaggerated and un-provable macroeconomic claims. The bank's unaccountability to а citizens of its member states, а consequence of its legal and financial structure, has undermined the development of democratic institutions, healthy economies and well-managed environments throughout sub-Saharan Africa.

With roughly one in five dollars of the region's foreign debt owed to this one bank, it is sub-Saharan Africa's single largest creditor. Yet far from relieving the region of its social, economic and environmental malaise, the World Bank and its sister Bretton Woods’s institution, the International Monetary Fund (International Monetary Fund), have often spawned policies and projects that have reduced, rather than enhanced, their clients' development potential.

Their actions are sometimes subtle, sometimes blunt, but always profound and stem directly from their institutional structure. That structure bears analysis. (Thomas 1996 30-51) In contrast to other forms of political instability, illegitimate executive transfers-which are а form of polity or regime change-show, no significant relationship to а presence of International Monetary Fund conditionality, even in а straight bivariate correlation that makes no attempt to control for economic factors.

Sidell states that "even the most vociferous critics of the International Monetary Fund would be most likely to acknowledge that there probably is no statistically significant positive relationship between International Monetary Fund-supported stabilization programs and the more malignant political events of internal war and coups d'etat. " Several other authors support this conclusion. In the studies noted above, Haggard and Remmer dismiss any relationship between either Stand-by or EFF relationships or а decline in democracy.

The results are therefore divided into two groups: those that examine the impact of International Monetary Fund conditionality relationships on polity structures and those that examine the impact of polity structure on International Monetary Fund conditionality relationships. In the first group the independent variables are the World Bank's Rank and the international monetary fund high conditionality agreements: IMFD, IMF52 or IMF76. The dependent variables are the polity structure variables AUTOC, DEMOC, CONCEN, and TYPE. Each of these equations was estimated using OLSQ techniques (i. e.

, cross-sectional across space) and pooled-time series techniques (i. e. , across both space and time). We have been able to find only one sophisticated quantitative study of the relationship between International Monetary Fund conditionality and Third World political instability. It examines the causal relationship between International Monetary Fund Stand-by Arrangements-their presence or absence and their frequency-and three forms of political instability-collective protest, internal war and illegitimate executive transfers-in up to ninety-nine countries between 1969 and 1977, utilizing both cross-sectional and time series analysis.

It does not analyze Extended Fund Facilities (EFFs) because they were not established until 1974. Sidell recognizes that stand-by arrangements are "very likely to be preceded by а number of disruptive economic problems" and he presents some statistical evidence to show that this is the case. (Zygmut 1998 121-42) Conclusion Another Keynesian inspiration, the International Monetary Fund, was designed to foster free trade and global prosperity by ridding the world of the protectionist, beggar-thy-neighbour policies of the Great Depression.

Keynes saw the International Monetary Fund as an international credit union, owned by countries instead of people that would regulate exchange rates to prevent unfair competition and ensure the smooth settling of international accounts. А country experiencing а balance-of-payments problem could borrow from the International Monetary Fund within its quota subscription and was expected to pay the International Monetary Fund back promptly. Ironically, the development model based on persistent government deficits, which institutions like the World Bank exist to finance, would render the International Monetary Fund's original mandate impossible.