World Bankspeak – how to hide the failure of a mission!

As the title of my 2015 book – Eurozone Dystopia: Groupthink and Denial on a Grand Scale – indicates, I am interested in both economics and patterned behaviour within groups and the way groups erect edifices (such as, denial) to defend positions. I am also interested in the way groups use language. In an upcoming edition of the Journal of Post Keynesian Economics, I have an article written with Dr Louisa Connors entitled – Framing Modern Monetary Theory, which discusses this topic. Framing and language is a tool that reinforces Groupthink and allows group (organisations) to engage in denial even though the facts convey a different message. A 2015 analysis of World Bank Annual Reports from 1946 to 2012 is illustrative of the way in which framing, grammar and word usage can be used to clothe reality. The analysis published by the Stanford Literary Lab – Bankspeak: The Language of World Bank Reports, 1946-2012 – documents the shift in language by the World Bank between the first two decades of Annual Reports to the second two decades. They show how the Bank shifts from a language that is readily understood and considers a concrete world and offers very little prescriptive input to a narrative that becomes so opaque and filled with financial buzz words that comprehension is lost. They document the emergence of what they refer to as “Bankspeak”. Groupthink requires a certain language to reinforce the increasingly unsustainable reality that the group lives within. That is the role of the World Bankspeak! The Literary Lab analysis is worth reading because it provides a coherent analysis of the way words and sentence structures (grammar) are manipulated to shift focus, allay concern and basically, undermine accountability mechanisms that were established to ensure an institutional mission was being faithfully pursued.

My upcoming JPKE article is based on work we first released in 2013 and described in these blogs – Framing Modern Monetary Theory and Framing Modern Monetary Theory – Presentation.

I also touched on it in this recent blog – British labour lost in a neo-liberal haze.

I was working on this topic again today – as I sketch out the structure of a book we are hoping to complete for late 2018.

As part of that work, I was reading a document published in March 2015 by the
Stanford Literary Lab – Bankspeak: The Language of World Bank Reports, 1946-2012 – and written by Franco Moretti, a literary historian and Dominique Pestre, a historian of sciences.

It is a wonderful piece of analysis.

I first became interested in this topic in the 1990s as the neo-liberal infestation of government agencies had become so entrenched that official documents and public statements of key policy departments became so opaque and full of ‘free market’ type words.

For example, an unemployed person is somebody without a job. Plain and simple.

It is a precarious state.

The individual suddenly has much more limited choices as income sources dry up.

The problem becomes one of not only handling the contraction of one’s social networks and the personal feelings of failure but also staying afloat financially.

We know that a range of pathologies enter the picture as a result of this joblessness. Health issues (mental and physical) increase, not in the least part due to the increased stress. But rising alcohol and substance abuse also exacerbate an already bad situation.

Family breakdowns occur. Increased crime rates are observed in areas hit with mass unemployment. Necessity drives previously unthought of behaviour.

I could go on.

We also used to understand that the jobless state was the result of a systemic failure to produce enough jobs.

When vacancy rates outstrip the available idle workforce – principally when unemployment is only a matter of people moving between jobs in the survey period – then all manner of folk are employed.

Drunks, those with physical and mental ailments, those who want to come in an out of the workforce by choice or circumstance, those who have little formal education, those with little skill – all were able to secure jobs, training where required and income security.

I know all the arguments about changing technology etc and how it has biased employment towards high and more adaptable skills. But if vacancies were to outstrip unemployment then you would see firms scrambling for labour, offering skill development within the paid-work environment and making appropriate changes to job design to ensure they could attract labour.

A shortage of jobs is due to a lack of total spending in the economy. End of story. That is categorical.

In turn, it means that after all the spending and saving decisions of the non-government sector have been taken, if mass unemployment remains, then we know the net government spending position is too contractionary – either the fiscal surplus is too large or the fiscal deficit to small.

A currency-issuing government always chooses the unemployment rate. The government is always responsible for their being idle labour resources.

With that in mind, I then became interested in how government agencies started to reconstruct the unemployed not as people without jobs but as ‘customers’ then ‘clients’ with choices as if they were consumers walking into a shop and making decisions on what colour clothing item to purchase.

And, to put no small emphasis on it, with all the rights that a consumer might have within that transactional relationship.

So the government income support systems shifted from providing some income security to those without work to being service providers for clients under this new neo-liberal speak.

The shift from systemic failure to individual choice – from a lack of jobs to transactional choice – from responsibility to aid all citizens to governance and oversight of ‘taxpayer funds’ – from the responsibility of government under international treaties to provide enough jobs to contract brokering and surveillance – from full employment to full employability – reflected the neo-liberal dominance of public policy.

And the shift in language was an intrinsic part of this policy shift. Of this abandonment of full employment. Of this jettisoning of responsibility.

That is when I became interested in the way language and framing works.

The World Bank shifts from helper to hindrance and worse

Recall that the World Bank started life in 1944 as a result of decisions taken at the Bretton Woods Conference, which established the fixed exchange rate system that was designed to bring financial stability to the world.

The IMF and the World Bank were created as part of this new approach. The IMF was intended to provide funds to ensure nations could maintain currency stability.

The World Bank, originally known as the International Bank for Reconstruction and Development (IBRD), was established to assist in channelling funds in wartorn Europe as part of the Post-War reconstruction effort.

It morphed over time into an institution charged with reducing global poverty.

The location and structure of the World Bank reflected the dominance of the US. Indeed, its first loan was to France, and the US insisted that before the loan was granted all the Communist Party members of the ruling coalition government be expelled.

Initially, the World Bank concentrated on providing loans to build public infrastructure – transport, ports and social expenditure (education, etc).

It was resource enabler because we understood that poor nations lacked physical and social capital. We understand that enriching the educational and health infrastructure was crucial to development and improving material living standards.

We also understood that nations prospered when high quality public infrastructure was available to the non-government sector to leverage off.

In other words, the provision of public infrastructure crowded in private investment and further enhanced the productive capacity of the nation and its capacity to provide well-paid employment.

But as the neo-liberal dominance gained ground in the 1970s and 1980s, the World Bank shifted focus and started imposing so-called structural adjustment policies, while expanding its ‘export-led’ development bias.

It became less interested in the infrastructure emphasis and started to focus on governance, contract brokering and all the rest of the financial type obsessions that now define it.

The Bank pushed through an ‘Americanisation’ of agriculture in the less developed nations (building huge dams and irrigation systems) and pushing production towards export markets with reduced agricultural diversity (the ‘cash crop’ mania).

The consequences were devastating. Not only were subsistence cultures destroyed (and the diversity of agricultural production) but the nations were lumbered with massive external debt liabilities and diminished international market prospects due to the oversupply of agricultural products.

The enclosure of land to satisfy demands by American investors for ‘property rights’ also displaced millions of the poorest citizens in these nations.

The export-led bias was not the only reason for the collapse of prices in world markets. The US government oversaw the massive dumping of wheat onto third world markets, which ruined the commercial prospects of the local farmers.

The World Bank practices trapped poor nations into unpayable debt, which then precipitated renewed calls for diversion of government spending away from health, education and other ‘well-being’ outcomes towards debt servicing.

Under this new focus, the World Bank worked closely with the US to render it impossible for the poorer nations to escape the debt-poverty trap.

In his 1994 analysis of the impacts of ‘Americanisation’ on less-developed nation agriculture, J.W. Smith noted that (p.63):

Highly mechanized farms on large acreages can produce units of food cheaper than even the poorest paid farmers of the Third World. When this cheap food is sold, or given, to the Third World, the local farm economy is destroyed. If the poor and unemployed of the Third World were given access to land, access to industrial tools, and protection from cheap imports, they could plant high-protein/high calorie crops and become self-sufficient in food. Reclaiming their land and utilizing the unemployed would cost these societies almost nothing, feed them well, and save far more money than they now pay for the so-called “cheap” imported foods.

Further, Smith noted (1994: 66) that:

The United States lent governments money to buy this food, and then enforced upon them the extraction and export of their natural resources to pay back the debt …

Not only is much U.S. food exported unnecessary, but it results in great harm to the very people they profess to be helping. The United States exported over sixty million tons of grain in 1974. Only 3.3 million tons were for aid, and most of that did not reach the starving. For example, during the mid-1980s, 84 percent of U.S. agricultural exports to Latin America were given to the local governments to sell to the people. This undersold local producers, destroyed their markets, and reduced their production.

[Reference: Smith, J.W. (1994) The World’s Wasted Wealth II, Institute for Economic Democracy.]

And nations that were once self-sufficient in food became dependent on food imports from the rich nations, which further worsened their balance of payments issues. Increasingly, more of their export income was devoted to paying debts and importing food rather than economic development.

As Michael Goldman noted (2008: 88):

… poverty grew as a result of the Bank’s development industry …

Although highly profitable for foreign investors, the new development regime was too costly for borrowers who did not have the resources to repay the large Bank loans.

[Reference: Goldman, M. (2008) Imperial Nature: The World Bank and Struggles for Social Justice in the Age of Globalization, New Haven, Yale University Press.]

This approach shifted more attention on raising revenue to service the external debts to first-world nations and the Bank, itself, as well as pushing through harsh cuts to public services, including basic education and health.

Goldman (2008: 89) writes that:

By 1986, third world debt had risen to $1 trillion and countries were borrowing large amounts from the Bank and the IMF just to service the interest on their old loans. Many African countries were forced to use all their export earnings to service their ballooning debts …

As private lending dried up, governments succumbed to these pressures … [IMF and World Bank demands] … and dramatically cut their spending on health, education, and welfare in order to comply with the new conditions placed on World Bank and IMF loans.

While they masqueraded as development programs, these structural adjustment programs were, in reality, giant vacuum cleaners sucking out the remaining real resource wealth these nations had and pumping it into the pockets of the rich elites in the US, Europe and elsewhere.

They required large-scale privatisations – largely focused on utilities, followed by ‘capital market liberalisation’, the buzz phrase of the 1980s, which made it easier for resources to flow out of the poor nations and provided them with no defense against speculative attacks on their currencies.

User-pays policies followed which meant that poor citizens were forced to pay ‘market prices’ for essentials such as water, power, housing, and food.

The World Bank became inured to the humanitarian damage these programs were inflicting. Goldman (2008: 90) says the World Bank “shock therapy became a never-ending cycle of large debt-servicing loans and additional policy requirements that further destabilized borrowers”.

A study by UNICEF authors (Cornia et al.,, 1987) was extremely critical of the World Bank’s approach and called for an increased humanitarian focus in designing economic policies. Their people-oriented approach resonated strongly with those who had been increasingly critical of the austerity that was being forced onto poor nations, enslaved by external debt.

They conclude that the the World Bank policies had “reduced health, nutritional, and educational levels for tens of millions of children in Asia, Latin America, and Africa”.

[Reference: Cornia, G.A., Jolly, R. and Stewart, F. (1987) Adjustment with a Human Face: Protecting the vulnerable and promoting growth, Volume 1, Oxford, Clarendon Press.]

The neo-liberal Groupthink infested the World Bank as time passed and significantly influenced the decisions it made.

I document some notable resignations or sackings of senior World Bank officials in relation to the Bank’s failings in this blog – Reforming the international institutional framework – Part 2.

One such sacking came in 1999 when Joseph Stiglitz was fired as the Bank’s chief economist (Source) as a result of his emerging criticism of the Bank’s lack of humanitarian awareness.

In an interview with the Observer (October 10, 2001) – The Globalizer Who Came In From the Cold – Joseph Stiglitz didn’t hold back in his criticism of the World Bank and the IMF.

He told Greg Palast that when Bank officials conducted an “in-country investigation” as a precursor to loading it up with more debt, the reality was that “the Bank’s staff ‘investigation’ consists of close inspection of a nation’s 5-star hotels.”

Bank officials would swan into a nation over some weekend, hole up in a ritzy hotel, live it up on the expense account, and leave on Monday for the next place, pronouncing expertise, and imposing, what Stiglitz called the “one-size-fits-all rescue-your-economy plan”, which, in reality, was just more scorched earth.

These plans follow the familiar pattern, which according to Stiglitz means that “There are lots of losers in this system but one clear winner: the Western banks and US Treasury, making the big bucks off this crazy new international capital churn”

As Greg Palast wrote following his interview with Joseph Stiglitz (Source):

… don’t be confused by the mix in this discussion of the IMF, World Bank and WTO. They are interchangeable masks of a single governance system …

Every time their free market solutions failed, the IMF simply demanded more free market policies.

The World Bankspeak!

The Literary Lab study of World Bank Reports from 1946-2012 captures this shift in ideology within the World Bank by tracing its changing use of language.

A similar study of the IMF Reports and the Bank of International Settlements Reports would render the same conclusions.

The Literary Lab study was mentioned in the UK Guardian article (May 26, 2017) – World Bank economist sidelined after demanding shorter emails and reports.

It is worth reading because it provides a coherent analysis of the way words and sentence structures (grammar) are manipulated to shift focus, allay concern and basically, undermine accountability mechanisms that were established to ensure an institutional mission was being faithfully pursued.

They start by juxtaposing a section from the 1958 World Bank Report with a tract from the 2008 Report:

1958:

The Congo’s present transport system is geared mainly to the export trade, and is based on river navigation and on railroads which lead from river ports into regions producing minerals and agricultural commodities. Most of the roads radiate short distances from cities, providing farm-to-market communications. In recent years road traffic has increased rapidly with the growth of the internal market and the improvement of farming methods.

2008:

Leveling the playing field on global issues

Countries in the region are emerging as key players on issues of global concern, and the Bank’s role has been to support their efforts by partnering through innovative platforms for an enlightened dialogue and action on the ground, as well as by supporting South-South cooperation.

As they note, the 2008 segment is “almost another language, in both semantics and grammar”.

They identify a “key discontinuity” between the “first two decades and the last two” (in their sample 1946-2012):

… when the style of the Reports becomes much more codified, self-referential, and detached from everyday language …

That is, they document the emergence of what they refer to as “Bankspeak”. Groupthink requires a certain language to reinforce the increasingly unsustainable reality that the group lives within. That is the role of the World Bankspeak!

The two passages are highly illustrative.

The Literary Lab analysis notes that in the first two decades of operation, the World Bank was concerned with the “creation of material infrastructure” and the ‘nouns’ used in the Annual Reports reflected this.

Their stylistic analysis (word frequency) show that infrastructure was at the forefront of the Bank’s focus with a “financial” reference limited to one noun “loans”.

They identified two “clusters” of nouns used frequently: the first, “encompasses the economic activities of the Bank”; the second, “much smaller (just a dozen words) … describes how the Bank actu- ally operates”.

So the most frequent nouns in the first cluster found in these early Annual Reports describe:

… a world of loan/s, development, power (in the sense of electric power), program, project/s, investment, equipment, production, construction, plant; further down the list are companies, facilities, industry, and machineries, followed by a string of concrete terms like port, road, steel, irrigation, kwh, river, highway, railway and then timber, pulp, coal, iron, steam, steel, locomotives, diesel, freight, dams, bridges, cement, chemical, acres, hectares, drainage, crop, cattle, livestock.

In the second cluster we find:

its experts analyze numbers … pay visits, realize surveys, and conduct missions to the field

Which are all “classical ingredients of a scientific approach to a complex situation”.

After collecting and analysing data, the Bank then:

… proceeds to advise countries, suggest solutions, assist local governments and allocate its loans. Rhetorically, investment programs are defined by the needs of the local economy, according to the basic idea that investment in infrastructure will lead to economic development and social well-being.

The Reports articulate a clear link “between empirical knowledge, money flows, and industrial constructions”.

They also found that “three types of social actors appear in the texts: states and government; companies, banks and industry; and engineers, technicians and experts” which conforms with “the standard account of post-WWII reconstruction as industrial, Fordist, and Keynesian”.

There was very little prescriptive narrative within the predominantly “factual precision: amounts, countries, materials, productive activities, objectives of investment” in the early Annual Reports.

They then compare that construction with the keywords in the Annual Reports of the “last twenty years”.

They identify “three new semantic clusters … the most important – has to do with finance” and a “landslide of fair value, portfolio, derivative, accrual, guarantees, losses, accounting and assets … equity, hedging, liquidity, liabilities, accounting, creditworthiness, default, swaps, clients, deficit, replenishment, repurchase, cash”.

The emphasis on material infrastructures in the first two decades and of “work in agriculture and industry” has been replaced by “an overwhelming predominance of financial activities”.

They provide beautiful graphs to support this conclusion. For example (and I will only reproduce this one – there are many).

This shows the “rise of financial language”.

Their second cluster is about “management … a noun, that … is the second most frequent of the last decade”.

So the Bank shifted from “issues were studied by experts who surveyed and conducted missions, published reports, assisted, advised and suggested programs” in the 1950s, to managers who “monitor, control, audit, and rate”.

The Literary Lab analysis in this regard is very interesting. By analysing the “collocates … words that tend to occur most often in the proximity of one or the other” they find that reducing poverty no longer appears to be about the obvious things – incomes, services, production, work, employment, food, health, agriculture.

Rather, the World Bank now talks about “strategies, … management … goals .. priorities” when talking about its mission to reduce poverty.

Their third semantic cluster is about “governance and moral behaviour” and they pinpoint 1990 as the date “governance” enterd the World Bankspeak.

And of the poor? Well the Bank now sees the World in terms of:

a place full of “opportunities” that the poor may seize in order to change their condition … Within this scenario, its activity consists in establishing the legal and cultural framework necessary for a variety of initiatives to flourish …

We are back to the Bank servicing “clients” (the impoverished) who must choose between the opportunities available.

The second part of their analysis sketches “out the process” of language change. They also analyse changing “grammatical patterns”.

Their overall conclusion in this regard is that the Bank language displays (quoting Orwell):

the whole tendency of modern prose is away from concreteness … its words are hopelessly opaque. What is it really to say – or to hide?

They analysis this opacity through the use of grammatical patterns to show the shift to abstraction, to dehumanise the narrative, to shift our attention away from humanity towards “principles” (with a financial emphasis).

The narratives have become “so general” that “no one will ever be able to say what they really mean”.

There is also never a ‘debate’ presented. The “verb disagree never appears in the Reports”. They say this is the Margaret Thatcher formula – TINA:

World Bank policies change all the time, but singularization does not: each new policy, is the only possible one …

The Literary Lab analysis concludes that essentially:

… there is no point in looking for the meaning of these passages in what they say … It’s the message of the countless headlines that frame the text of the Reports: “Working with the poorest countries”, “Providing timely analysis”, “Sharing knowledge”, “Improving governance”, “Fostering private sector and financial sector development”, “Boosting growth and job creation”, “Bridging the social gap”, “Strengthening governance”, “Leveling the playing field on global issues”. Working, providing, sharing, strengthening, boosting … All extremely uplifting – and just as unfocused: because the function of gerunds consists in leaving an action’s completion undefined, thus depriving it of any definite contour. An infinitely expanding present emerges, where policies are always in progress, but also always only in progress. Many promises, and few facts … All change, and no achievement. All change, and no future.

Conclusion

I thought this was an excellent discussion of the way in which institutions manipulate language to maintain relevance in a changing world.

The neo-liberal era has required organisations like the World Bank, which was set up to ensure poverty was reduced through the provision of infrastructure (physical and social), to shift into becoming conduits for moving real resources from nations to advance the interests of First World capital.

Of course, their current role indicates they are failing their original mission. So to obfuscate and hide that reality, the language had to change.

Now we read their accountability documents (such as Annual Reports) and we haven’t a clue what they are up to and that means their wordsmiths are doing their job.

I have only given you a flavour of the Literary Lab analysis here.

That is enough for today!

(c) Copyright 2017 William Mitchell. All Rights Reserved.