Patrick Sharma's book on Robert McNamara's tenure as head of the World Bank during the 1970s makes a timely contribution to the study of an important topic. Sharma, a trained historian who now practices law, uses McNamara's World Bank presidency as a window on how efforts to promote economic development changed during that decade. In so doing, Sharma's book illuminates larger shifts in international political economy and the difficulties faced by policymakers trying to alleviate global poverty.
Sharma's overall take on McNamara's work at the World Bank is that it mirrored in many ways his earlier tenure as U.S. Secretary of Defense from 1961 to 1968. Enamored of quantitative methods as a way to improve agency efficiency, McNamara brought that approach to the Department of Defense (DOD) and then the World Bank, both times with very mixed results. In each case, Sharma makes clear, McNamara tended to ignore quantification's limits. In the case of his time at DOD, that led to inflated estimates of enemy casualties based on exaggerated data from the field. At the World Bank, the problems with quantification proved to be similar, in the sense that obtaining truly accurate estimates of rates of return on proposed development projects was often difficult if not impossible. Reliable statistics on project success were also sometimes hard to get from government officials eager to put the best face on what they were doing.
Making those problems worse at the World Bank in the 1970s were McNamara's grandiose ambitions for its role in development. Prior to his accession to the Bank's presidency on April 1, 1968, the World Bank had lent money mostly for infrastructure development projects such as dams and highways. Those kinds of loans did tend to increase economic growth in Third World countries, but the biggest beneficiaries of that growth were often better-off peasants and workers—the Third World's version of the middle class. What such projects did not do was change much for the poorest people there, a situation McNamara was determined to address. As Sharma makes very clear, the result was a drastic expansion in World Bank lending aimed at helping small-scale farmers and other poor people, but often with disappointing consequences. In part, that stemmed from the lack of political power possessed by the poor, which left them ill equipped to win contests for the fruits of development projects. Another weakness in McNamara's approach was a frequent lack of effective local administration of small-scale projects aimed at helping the Third World poor, which contributed to waste and corruption. Even his determination to do a lot more created serious problems, by driving up the workload among World Bank staffers so much as to undermine the quality of their oversight of development proposals and projects. That same process of rapid lending expansion also helped produce the Third World debt crisis of the 1980s.
Sharma's fair-minded account makes clear that even without those mistakes, McNamara's laudable quest to make development work better for poor people would likely have been frustrated during the 1970s by larger forces beyond his control. One of these forces was persistent price inflation, of oil especially, which weakened economic development in much of the Third World and tended to increase poverty there. Another was the rising influence of free-market ideas, of both the neoliberal and New Right varieties, which increasingly inclined participants in the process of promoting economic development to view government agencies, the World Bank included, as part of the problem rather than the solution. The easing of East-West tensions in the 1970s also contributed, by reducing Cold War–related pressures on the United States and its allies to promote Third World development via foreign aid and contributions to the World Bank.
McNamara accommodated that changing reality by tying World Bank lending to reforms in Third World public policies, in effect requiring governments there to implement neoliberal approaches such as lower trade barriers and leaner public sectors in order to qualify for World Bank aid. With that step, the Bank became more like the International Monetary Fund, which made McNamara and the World Bank less popular in much of the Third World. An effort to be more “bottom up” in terms of intended beneficiaries became linked to a more “top down” approach to development at the World Bank. The emergence of that pattern was, as McNamara's Other War argues persuasively, his most significant legacy as World Bank president.
There are a few weaknesses in this otherwise fine book. One is that it does not do more to compare and contrast McNamara's model of promoting economic development with the more moderate path pursued by the Bank over the twenty years prior to his appointment as its president in 1968. With the passage of time, the Bank's more cautious approach then looks somewhat better. Another is the lack of sustained attention to whether other, better options were available to McNamara and the World Bank during the 1970s. More discussion of that issue might have made McNamara's role look more positive, in the sense that the overall result of his efforts was to countervail somewhat against growing poverty and inequality. Sharma's account seems to suggest at times that if the Bank had simply stayed with its traditional model during the 1970s, the plight of the Third World poor might have become even worse, but he doesn't fully develop this thesis.
Robert McNamara's Other War is, despite these faults, a very clear, useful book on an understudied subject: how the World Bank's approach to promoting economic development in the Third World has changed over time, and what the consequences of that shift have been. Sharma's book is also a timely reminder of just how much changed with respect to international political economy in the 1970s even before the arrival of the New Right revolution. Scholars interested in those issues will find reading this book well worth their time.
