March 2005

Nancy Alexander

Dear All,
I appreciate Kuni's thoughtful response to Angela's and my remarks on Broad's fine paper on the World Bank.

I agree with Kuni about the importance of exploring what can be done about holding IFIs accountable to their charters - including the possibility introducing some form of tort law on the multilateral level - has been unable to get more support. I've cc'd this note to an attorney, John Fitzgerald, who's done considerable work on the topic in hopes that he might weigh in.

On the matter of grants...I think that it is unfortunate that so little seems to be known about what the World Bank intends to do with the grants. Grant aid is used for several purposes, including output-based aid (OBA) schemes wherein the grants go (through the government) to corporations. For instance, in Chad, grant aid goes through the government to Vivendi and Dietsman to ensure that they obtain their guaranteed ROR under their electricity and water lease. Corporate welfare. It is also the case that such aid can directly compensate consumers (if they can ever obtain their targeted subsidies) for a set period of years when full cost-recovery is being phased in.

Regardless of whether, in the end, one supports or opposes grant aid, it would be helpful to have a higher level of awareness of the purpose of this aid. If anyone is interested, I can send out a paper we did on OBA. (I don't know whether this list accepts attachment.)

Thanks again, Kuni.
Nancy