mark hertsgaard

Independent Journalist & Author


Fighting poverty, from one point of view

Book Review by Mark Hertsgaard

The World's Banker: 
      A Story of Failed States, Financial Crises, 
      and the Wealth and Poverty of Nations.
   by Sebastian Mallaby. Penguin: 464 pp., $29.95

Within days of the Sept. 11 attacks, World Bank President James
Wolfensohn had seized upon the tragedy to argue that fighting poverty
was now more important than ever. There is no wall separating rich
nations from poor, Wolfensohn declared. We are linked by migration,
by environmental degradation, by drugs, by financial crisis and by
terror. In short, fighting poverty in poor nations — the World
Bank’s mission — was in rich nations’ self-interest.


The World’s Banker offers an informative but one-sided description
of how the institution has approached that fight during Wolfensohn’s
two terms as its president, from 1995 to now. Wolfensohn granted 20
hours of interviews for this book, and his gargantuan personality —
part bon vivant, part missionary, part tyrant — dominates from
start to finish. Author Sebastian Mallaby, a Washington Post
columnist, also seems to have spoken with scores of the bank’s staff
and reviewed many official documents.

This enviable journalistic access may account for the twin strengths
and weaknesses of the book. On the positive side, The World’s Banker
provides copious detail on the inside workings of the bank and its
president: how the major development strategies of the last 30 years
were chosen; how Wolfensohn analyzes poverty; what he did about Third
World debt relief; why he saw the bank’s sister institution, the
International Monetary Fund, as more foe than friend; and why the bank
took so long to awaken to the AIDS epidemic, which is projected to
kill more people than World Wars I and II, the Korean and Vietnam wars

Mallaby overstates when he calls the bank the rich world’s main
instrument for fighting poverty. Reforming the terms of trade for
agricultural goods — the province of the World Trade Organization —
would actually help poor nations most of all. But the bank does lend
poor nations $20 billion a year, and its practical leverage over them
is greater still. Without the bank’s stamp of approval, they cannot
hope to attract much corporate investment, which is where the real
money is. As the AIDS crisis illustrates, what the World Bank does or
doesn’t do can be a matter of life and death for millions. By
burrowing inside the bank and presenting his findings with clarity and
wit, Mallaby has produced what amounts to an unofficial history that
will be useful to anyone seeking to understand this powerful

Unfortunately, his insider sympathies lead him to shortchange key
aspects about the bank. He also misrepresents the views of critics
with whom he disagrees and does little firsthand reporting among poor
people who have been affected by its policies. He seems to have made
only two brief overseas trips, to Chad and Uganda, offering well-told
but too brief accounts. The World’s Banker ends up covering poverty
more through the prism of Washington power struggles than through the
eyes of the poor – strange, given that Mallaby faults the bank for
paying more attention to rich nations’ views than to those of poor

Nor are the elite policy disputes fairly portrayed. The bank’s
internal critics are given pages and pages to complain about, say,
Wolfensohn’s evidently chaotic management style. External critics, by
contrast, are disparaged with name-calling, and their more thorough
critiques are ignored.

Nobel Prize winner Joseph E. Stiglitz, who served as the bank’s chief
economist during part of Wolfensohn’s tenure, is absurdly caricatured
as a virtual street protester motivated solely by ego. Economics
scholar Susan George is called one of the bank’s leading critics, but
Mallaby gives no hint of what she actually thinks; her writings are
summarized in a single word: vociferous. He dismisses most
nongovernmental organizations with ridiculing one-liners —
parasites, rag-tag, screamers, the Berkeley mafia, the
Lilliputian menace — without fairly engaging the substance of their

In a typical passage, an activist in the International Rivers Network
confesses to having used his supposedly enormous leverage to keep
developing nation governments out of the deliberations of the World
Commission on Dams. In reality, that commission brought together
governments, industry and nongovernmental organizations under bank
sponsorship and was chaired by the South African government’s water
minister. What’s more, the activist’s supposed confession made a
different point: not that governments were excluded but that pro-dam
governments such as India and China didn’t organize themselves
effectively enough to control how the commission was structured and

In the end, the commission concluded that dams had produced benefits
for poor nations but these were outnumbered by their drawbacks,
including cost overruns, environmental damage and displacement of
indigenous people. Mallaby says nothing about these findings, instead
condemning the report as a virtual ban on dam building.

It’s fine for authors to have strong opinions, but ideological bias
should not trump checkable fact. Mallaby is a talented writer who
cares about the plight of the poor. Too bad he doesn’t care more about
fairly presenting a problem that, as Wolfensohn rightly insists,
matters urgently to rich and poor alike.



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About Mark

Independent journalist Mark Hertsgaard is the author of seven books that have been translated into sixteen languages, including Bravehearts: Whistle Blowing in the Age of Snowden; HOT: Living Through the Next Fifty Years on Earth; and A Day in the Life: The Music and Artistry of the Beatles. He has reported from twenty-five countries about politics, culture and the environment for leading outlets, including The Guardian, Der Spiegel, Vanity Fair, The New Yorker, Time, Mother Jones, NPR, the BBC and The Nation, where is the environment correspondent. He lives in San Francisco.