These include:
- conditions attached to loans, programs and projects
- undemocratic decision-making structures and processes
- bureaucratic structures
- social and environmental impacts of projects
Conditionality
A long-standing issue surrounding aid from multilateral development banks (MDBs) is what is known as conditionality. Conditionality refers to the conditions attached to aid money dispersed from MDBs like the World Bank and the Asian Development Bank.
While the conditions imposed on aid-recipient countries vary, common examples of the types of conditions in loans provided by MDBs include:
• Cutting back on public spending and reducing the size of government departments and services. This is often concentrated in areas such as health and education where costs are high. This has major impact on people’s access to health care and schooling, particularly among the poorest.
• Privatising key sectors of government and public services. Countries have been required to privatise key sectors such as water provision, essential infrastructure, hospitals, electricity, and transport. This puts control of key sectors into private (and often foreign) hands, which may not have the best interests of the country in mind. This has often resulted in the inequitable provision of key services as private providers tend to prioritise servicing of areas that are profitable.
• Lifting essential subsidies. In many poor countries governments subsidise essential items such as rice, grain, oil, and even petrol. They do this so that the prices of essential items do not prohibit people from meeting their daily needs. Sometimes governments are required to lift these subsidies which can lead to increases in prices of essential items, making them unaffordable for many people.
Last updated 12 November 2010