Analysis of Transparency Issues at the World Bank

1 September 2002

Despite changes made in the World Bank’s disclosure policies, more transparency is still possible. Below is a summary of current transparency issues. To read more about the Bank’s changes made in August 2002, see the policy itself made in 2002. Or read the summary from the Bank Information Center. Areas where improvements could be made are described below.

Board Minutes

Near total secrecy surrounds Board meetings, which are held regularly. The meetings are not open to the public or the press. Transcripts of the meetings are kept, but are available in the Board Resource Center only to senior Bank officials. Nor are minutes available to the public, and access to them within the Bank is closely controlled.

For some decisions, Chairman’s Concluding Remarks may be made available. These summaries will be made available for discussions related to Country Assistance Strategies, Transitional Support Strategies, Sector Strategy Papers, and "other select policy, strategy and topical issues." Also, Chairman’s Concluding Remarks for these discussions will not be disclosed if the document under discussion is itself not disclosed, or if "the board decides otherwise."

These short accounts lack detail and are not available for discussions pertaining to individual loans.

Under the new policy, the Board will now disclose the Biannual Strategic Overview of the Executive Directors’ Work Program as well as Monthly Updates of the Board Schedule. However, documents that are themselves confidential will not appear on the schedule.

Timing: Project Documents

Perhaps the most troublesome thing for those seeking to follow and affect Bank decisionmaking is the limited availability of documents in advance of Board meetings. This is particularly true for projects, such as a decision about a dam, and for structural adjustment lending, the broader category of Bank assistance.

The preliminary document about a project that is released, the Project Implementation Document (PID), is often short and general. For example, the PID for a project in Brazil. The Bank has indicated a desire to update PIDs in advance of Board consideration, but this appears to occur infrequently.

So projects are described in general terms during their formative stages. But as the time for Board decision nears, critical information is kept confidential.

The key document that goes to the Board is the Project Appraisal Document (the PAD), a staff-prepared assessment of the proposed project. For example, a PAD for the same project in Brazil.

The PAD is only released after a decision is announced.

Timing: Structural Adjustment Lending

For structural adjustment lending in its various forms, the picture is somewhat complicated, but the Bank has resisted proposals to disclose more information about pending loans before the Board makes its decision.

As with projects, for structural adjustment lending, the first notice is public. A first notice that appears in the Monthly Operational Summary, followed shortly thereafter by a Project Information Document, the PID, a description prepared by the Bank staff.

However, the PID is the only document to see the light of day until a decision is made by the Board. At that point other documents involved, except the Memorandum of the President (see separate discussion), are released. However, some documents are releasable at the discretion of the government involved.

Free the CAS

The Country Assistance Strategy is a broad but important document usually developed every three years to describe the Bank’s basic approach to a country’s problems. It is developed over many months with the government involved. Once finalized, most, but not all, are released.

However, the Bank continues to be unwilling to release drafts of CASs as a way to facilitate more public participation. There are some instances in which draft CASs are released, and feedback solicited, as occurred in the preparation of the Belarus CAS.

Once a CAS is completed, its release depends on the wealth of the nation.

If a borrower is a middle-income country that borrows through the International Bank for Reconstruction and Development (IBRD) then disclosure of the CAS is up the country after the CAS is finalized. Since August of 1998 when this policy was instituted, 11 of 24 eligible IBRD-CAS documents have not been disclosed.

However, a more transparent policy is applied to less developed countries that borrow from the International Development Association (IDA). For the poorer countries, the CAS is disclosed after they are finalized "unless in exceptional circumstances, the country concerned objects to such disclosure and the Executive Directors agree that it may not be disclosed." CAS modifications have made at the country’s request in eight instances since July 1, 1999, when the policy went into effect. The changes have included such things as rewording sentences "on the degree and impact of corruption in the country," according to an internal Bank report.

The Bank’s policy is the most restrictive of the multilateral development banks in this area.

Beginning Jan. 1, 2002, the Bank began issuing Chairman’s Concluding Remarks except when the CAS itself is not disclosed. For example, the Chairman’s Concluding remarks for the Sierra Leone CAS.

The Sierra Leone CAS is also available. The full list of available CASs can be viewed here.

Mystery Document

The Memorandum of the President was recreated by the Bank in 2001 as part of its new disclosure policy, and is not disclosed.

The Memo is one of four documents that describe Bank policies relating to a particular structural adjustment lending effort. Bank policy calls for disclosure of these documents only after Executive Board action.

The three other documents are: the Program Document, the Letter of Development Policy, and the Tranche Release Memorandum.

Under the new Bank policy, the standards for releasing the Program Document vary depending on the type of structural adjustment loan involved.

However, the Memo of the President will remain secret in all cases.

"It puts all the juiciest information in one place," commented one activist.

Of interest as the new policy matures will be the extent to which the Bank allows the Memorandum of the President to be used as a depository for any information a government wants to withhold. There are no written standards for what may go undisclosed by virtue of being moved into the memo. Some feel that more precise standards would be advisable. Also, the lack of a Bank policy allowing the release of materials with redactions made based on stated criteria will reduce the ability of requestors to test the policy.

As for the other three documents, the disclosure policies vary depending on the type of loan involved.

The Letter of Development Policy (LDP) is prepared by the borrowing country to outline the policy reforms that the government has agreed to as a condition of lending. For structural adjustment loans that involve a Poverty Reduction Support Credit (PRSC), the LDP, previously never released, is now "presumed disclosed by the government." For LDPs on non-PRSC loans, the policy says they will be disclosed by the Bank "with the consent of the borrower."

The same two-track release policy applies to the Program Document and the Tranche Release Memorandum.

The Program Document, prepared by the Bank staff, describes in detail the proposed loan and policy changes that the government has agreed to make. (Before the 2001 changes in Bank disclosure policy, it was called the President’s Report.) For PRSC loans, PDs will be disclosed by the Bank. For non-PRSC loans, release will be up to the government after Board approval of the operation. Bank policy states that during negotiations, the borrower would identify confidential or sensitive material in the PD, and such information would be included in the undisclosed Memorandum of the President.

The Tranche Release Memorandum is prepared during the course of the loan by the Bank staff to review the degree to which the government has implemented the agreed policy reforms and makes recommendations on whether sufficient reform has occurred to warrant moving forward with loan disbursal. Voluntary disclosure is also the standard for Tranche Release Memorandum.

In sum, disclosure of documents is a little more likely for PRSC-related loans, while for regular loans governments have more discretion. The extent to which this discretion is utilized is one issue for the near future.

Government Discretion

Governments have discretion over the release of some documents that get developed in conjunction with the World Bank.

Under the Bank’s 2001 disclosure policy, government discretion comes into play for several key documents associated with structural adjustment loans. These include: the Letter of Development Policy, the Program Document and the Tranche Release memo. Some countries also have discretion in the release of their Country Assistance Strategy.

The Letter of Development Policy (LDP) is prepared by the borrowing country to outline the policy reforms that the government has agreed to as a condition of lending. For structural adjustment loans that involve a Poverty Reduction Support Credit (PRSC), the LDP, previously never released, is now "presumed disclosed by the government." For LDPs on non-PRSC loans, the policy says they will be disclosed by the Bank "with the consent of the borrower."

The Tranche Release Memorandum is prepared during the course of the loan by the Bank staff to review the degree to which the government has implemented the agreed policy reforms and makes recommendations on whether sufficient reform has occurred to warrant moving forward with loan disbursal. Voluntary disclosure is also the standard for Tranche Release Memorandum.

The Bank Information Center, a Washington-based NGO, is attempted to monitor compliance with the Bank’s new disclosure policy. When such government disclosure of a document becomes an option, BIC is attempting to spread the news. BIC is e-mailing NGOs when a document could be released at the discretion of the government.

The basic hope is that groups in borrowing countries will bring pressure to bear on the government to make the material available. Also, information collected will allow for an assessment of just how much compliance there when release is discretionary with governments.

Those interested in received such notifications for their countries may contact Graham Saul, (202) 624-0626, or gsaul@bicusa.org.

No Formal Process

There is no formal process for requesting Bank documents, the Bank need not explain its reasons for nondisclosure, and there is no appeal process.

Cures for these procedural maladies were made during the Bank’s 2001 reconsideration of its policies by Article 19 and other groups, but not adopted.

Article 19 stressed "implementation of the right to know requires clear process guarantees, including requirements of time decision-making and that refusals be accompanied by substantive written reasons."

The right to access to information, Article 19 also wrote, "cannot be guaranteed unless individuals have a right to appeal any refusal to disclose information to an independent body." The Feb. 16, 2001, letter to the Bank continued, "Such a right of appeal is crucial to the success of any disclosure system because in the absence of a review body, there is no independent check on whether a refusal to disclose information is in accordance with the applicable law or policy." Article 19 further pointed out that the United Nations Development Programme has recommended in its Public Information Policy that an oversight panel for appeals should consist of three UNDP professional staff members and two members from the nonprofit sector. Among other things, Article 19 also noted that World Bank confidentiality provisions are not subjected to a "harm test" or a "public interest test" and that this runs counter to international law, including the United Nations Declaration of Human Rights.

A good guidance document for getting information from the World Bank is available on the Bank Information Center Web site.

By Toby McIntosh

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Filed under: IFTI Watch

ABOUT IFTI WATCH

In this column, Washington, D.C.-based journalist Toby J. McIntosh reports on the latest developments in information disclosure in International Financial and Trade Institutions (IFTI).
Contact: freeinfo@gwu.edu or
1-(703) 276-7748