A recent report by the World Bank confirms that privatization has failed to address the needs of the poor worldwide. The report describes the Bank’s privatization policy over the past two decades as “oversimplified, oversold and ultimately disappointing”.
The World Bank and other financial institutions have pushed developing countries to sell off public infrastructure in the 1990’s in exchange for loan guarantees. Privatization has since caused spiraling debts and other structural economic problems.
Acknowledging a disapproval rate of over 80 per cent in countries such as Argentina and Peru, the report admits the mistake of believing “even poorly designed privatization is better than continued state ownership”.
But while the report calls for a larger public role with “more subsidies and targeted safety nets to ensure that the poor benefit”, the Bank hasn’t abandoned its love affair with privatization.