The World Bank and its private sector arm, the International Finance Institution, and the Multilateral Investment Guarantee Agency are not willing to take harm-remediating action, arguing that this will increase their legal liability risk, and therefore attract less private sector investment. This argument is unfounded and counterproductive: anticipating negative project outcomes better and taking a more active role in remediation will enhance development impact and is likely to reduce the risk of legal liability.
The new World Bank Group President Ajay Banga is taking the helm at a time when the institution is being called on to increase its risk-taking appetite and channel more funding to low- and middle-income countries, to assist in the transition to a low-carbon economy, and, importantly, to mobilize private sector investments to achieve all this.
At the same time, the World Bank, IFC, and MIGA are facing unhappiness with their practices in the countries they support, and frustration about the lack of robust remedies when projects do not go as planned.
About the authors
Angelina Fisher
Angelina Fisher is an adjunct professor of law at the New York University School of Law, and policy and practice director at the Guarini Global Law & Tech program.
Gráinne de Búrca
Gráinne de Búrca is a Florence Ellinwood Allen professor of law at New York University and co-director of NYU’s Jean Monnet Center on International and Regional Economic Law and Justice.
