Social and environmental impacts of projects
The ability of MDBs to mobilise sufficient funds for large-scale ‘development’ projects is often cited as one of their key advantages. However, their involvement in promoting, funding and implementing large-scale projects has also been a source of controversy.
Firstly, the technical expertise necessary to manage and build large-scale infrastructure has meant that much of the aid money has been channelled to companies, consultants and technical experts that oversee the projects.
Secondly, while these projects may generate revenue and contribute to economic growth, they can also have detrimental social and environmental impacts. For example, the World Bank and ADB have been heavily criticised for funding large dams that have degraded rivers and destroyed local livelihoods.
Whether some of the projects funded by the banks ‘alleviate poverty’ (as the banks claim) or further impoverish populations (as critics claim) is a matter of much debate. For an example from the Mekong Region in Southeast Asia, see Hidden Costs: The underside of economic transformation in the Greater Mekong Subregion