The World Bank's 2004 World Development Report (WDR), Making Services Work for Poor People, was released with relatively little fanfare, at the World Bank and International Monetary Fund (IMF) annual meetings in Dubai, United Arab Emirates. The WDR's authors pull their punches, eager to avoid being pinned down either as firm advocates of privatization or as believers in the potential of public ownership. It seems that actually advocating for public ownership is not an option at the World Bank just yet--this year's WDR is characterized by an indistinct tone and vague approach to the question of essential services.

This contrasts sharply with the United Nations Development Programme's Human Development Report (HDR), which was released in July of this year. According to the HDR, it is clear that policies imposed upon borrowing countries by international financial institutions like the World Bank and IMF as loan conditions can do more harm than good, often forcing spending cuts in essential services. In fact, 54 countries are poorer now than they were in 1990. With the Millennium Development Goals (MDGs) as the benchmark for the HDR, Mark Malloch Brown, UNDP Chief and former World Bank Vice President for External Affairs and United Nations Affairs, cautioned that at the rate things are going, it is conceivable that it will take sub-Saharan Africa until 2129 to achieve universal primary education targets, 2147 to halve extreme poverty, and 2165 to achieve MGD targets for the reduction of child mortality.

The HDR marked a striking departure from the neo-liberal doctrine established by the World Bank on the provision of essential services like water, healthcare and education. After the release of the HDR, Malloch Brown took the World Bank and the IMF to task in the press on the conditions imposed by the institutions on borrowing countries as part of their conventional structural adjustment programs (SAPs) including fiscal austerity, cuts in social spending, tax reform, trade liberalization and privatization. He urged the institutions to help countries provide more support for their citizens, and called for a "guerilla assault" on the Washington Consensus, a term synonymous with the neo-liberal development model pushed by the institutions for decades. It was a stunning denunciation, coming from someone who served as the World Bank's public relations guru until taking on the UNDP post a few years ago.

In a chapter titled "Private finance and provision of health, education and water," the UNDP report enters into highly contentious territory: the provision and financing of essential services. The chapter, like the rest of the report, is based on the premise that access to services like clean water, healthcare, and education, is a basic human right. Governments traditionally provide these essential services because they hold intrinsic value and benefit the greater good, and in some cases, they are able to make service distribution more equitable -- tenets that private, market-based providers alone cannot uphold. In fact, history has shown that the majority of developed countries have achieved superior levels of access to basic services not through private provision, but through state-owned delivery.

When the services sector is opened to private provision-the term private in this case encompassing non-profit providers alongside for-profit interests- class based "service apartheid" can ensue, with those best positioned (usually large corporations) able to appropriate the more lucrative franchises. Equity and human rights ordinarily play little role in the profit driven private sector's decisions about distribution. But the UNDP report does not maintain that public provision is always the best option for service provision, especially in cases where the government suffers from a marked lack of transparency, accountability, technical knowledge, or resources to publicly provide basic services in an equitable manner. In some cases, the UNDP says, private provision can help to bring services to a broader range of people.

The UNDP concludes that "sustained service provision is best achieved through the efforts of local communities and firms (private and public), and building this capacity is an important role for government." They retain emphasis on the role of the public sector as crucial to effective provision of essential services. They maintain that contracting services out to private firms is, in some cases, a better option, but only after taking into account the cultural, socioeconomic and political realities of the country in question, and remain firmly rooted in a rights-based development framework.

The WDR includes statements that express views parallel to those of UNDP -that the public sector has a unique role in service provision -- but does little to acknowledge successes in reform of public service delivery, or in strengthening weak regulatory bodies, and maintains that public provision is frequently problematic. As Tim Kessler of Citizens Network on Essential Services points out, the WDR does not balance its approach to putting forth alternatives, and suggests, through tone and discriminating examples-including some that place blame squarely on the shoulders of workers in the services sector- that decentralized provision, via private interests, is the best course for governments to take when state provision fails. As the World Bank's flagship publication, it is blurry at best, and refrains from making categorical statements or outlining policy recommendations.

The WDR reflects the World Bank's internal ideological confusion over its commitment to conceptualize every aspect of service provision in market terms, although overall it proposes that a larger share of service provision go to private interests. In the report, the World Bank favors private provision of infrastructure services like energy and waterworks, despite the high risk associated with these sectors. When it comes to a discussion of social services (healthcare, primary education, etc.), however, the World Bank is skeptical of the private sector's role in delivery. The authors attempt to provide a framework within which to analyze service provision options, based on a simplistic, overly technocratic matrix which includes three sets of criteria: whether the political climate is pro-poor or pro-rich, whether the client preferences are heterogeneous or homogenous, and whether the outputs are easy or hard to monitor -in short, attempting to place the rainbow-colored spectrum of the world's cultures into a "black or white" mold.

The WDR is filled with contradictory advice, much of which rests on the premise of accountability, or lack thereof. The advice is delivered in a noncommittal manner, offering anecdotal evidence to support any number of conclusions. Most remarkable, however, is that the WDR ultimately fails to clear up a fundamental contradiction, pointed out by Kessler: that the same limitations of accountability that lead to public service failure will likely undermine attempts at private provision and decentralized services. That is, the problems that exist now are not problems that are fixed by privatization; instead the privatized services will encounter the same obstacles, but will be dedicated to making profits for outside interests.

One basic argument that the WDR makes for private provision of essential services is that "clients" will encourage providers to provide the highest-quality and most efficient service by interacting directly with them, demanding what they want and threatening to withdraw their patronage if they don't get it. This system is viewed as more efficient and effective than one that calls on "citizens" to influence public policy-makers in order to have an effect on the service they provide -- a process that is indirect and subject to distortion by use of inappropriate influence with government. In the WDR's estimation, a government cannot responsibly play the role of provider and regulator. There is a conflict of interest at the policy-making level if national governments, subject to influence by corporate interests, are left to regulate and deliver public services. The 'short-cut' approach-a client/provider relationship that the World Bank claims will increase "poor clients' choice and participation in service delivery," thus proposes separating the policy-maker and the provider.

This logic neatly sums up what is coming to be called market fundamentalism: the belief that the most efficient way of doing anything, and the way to achieve the greatest happiness, is to use market mechanisms -- the discipline of buyers and sellers negotiating exchanges. This tendency toward blind faith in the "invisible hand" of the "free market" tends to ignore details like the basic requirements of human survival and growth, or inequalities in power and resources. It also, as in this example, suggests that commercial exchange in open markets is more transparent, accountable, and efficient than political democracy can ever hope to be (?remember Enron?) It is the logically extreme expression of the approach the IMF and World Bank have been imposing on developing countries for over 20 years -- the core philosophy the IMF and World Bank have been proclaiming.

The World Bank ultimately documents several avenues by which the provision of services can be improved. As discussed above, by empowering the "client" with mechanisms such as user fees or vouchers, the World Bank feels that customers can play the market-based game, exercising freedom of choice and ultimately allowing the customer to demand a service she or he has paid for. Market-based mechanisms, however, incases where there is a lack of accountability by the provider or policy-maker, cannot replace the right of people to be represented and served by policy-makers, or to construct policies that are reflective of their needs and basic human rights, which will help ensure that the intrinsic value in equitable distribution of services is retained. The notion that transactions based on the exchange of money for services, or the "naked cash nexus," as one World Bank insider calls it, can empower poor people in the face of fundamental structural inequities, without strong backing by policy-makers, is improbable. It also presupposes that people will actually be able to afford to pay for essential services, which, when privatized, often see end costs to users skyrocket far beyond the reach of many.

The World Bank also proposes that, through public disclosure of information about the service provider, at the agency of the regulator, the citizens can exercise their voices to make their needs known. Given the actual nature of the World Bank's operations, which are marked by an acute lack of transparency, specifically in its Information Disclosure Policy, the assertion that the poor will have access to the information they need in order to be effectual participants in any discussion on regulation or provision is effectively undercut. As it stands, information about projects such as infrastructure development are frequently available to the public only after a project is approved, or its plans are finalized. The information disclosed, even documents purported to be "country owned," are often made available only in English or other European languages

The World Bank's World Development Report authors, in choosing to release a document that provides no clarity to the document's end-users, have, in effect, shown a lack of accountability, and take no ownership of their role in the fundamental problem of lack of access to basic services, a human right. The WDR's imprecise and scattered stance on the provision of essential services, an area of urgent concern for many of people in places like Cochabamba, Bolivia and the Soweto township in Johannesburg, South Africa who are subject to the World Bank's policies and practices, is bewildering, its policy recommendations ambiguous. The figures cited by the UNDP pointing to the failure of the World Bank and IMF to usher in a development characterized by justice and sustainability, and the well-documented movement of popular resistance to the institutions,1 however, are crystal clear.