Regionalisation and regional integration have been the subject of debate in political science and political economy regarding its impact on development for some time but only recently have they gained sustained attention in mainstream economic analysis and development theory; this literature emphasises things like trade, foreign direct investment (FDI) and regional production networks. Equally, in donor circles a number of agencies are quite engaged with these issues – indeed, there is growing acknowledgement that many problems in the areas of transport, disease, pollution, forestry, agriculture and the environment need to be tackled through regional and global forums. Yet, the globe’s largest development organisation, the World Bank, has only very recently started to engage with the topic, and only in a quite limited form. This is an interesting puzzle around an organisation that has over the past two decades – if not longer – prided itself on being in the forefront of the development debate.
This paper starts by exploring the World Bank’s policy and practice in relation to regionalisation and regional integration, globally and in Southeast Asia, and drawing out the underlying commitments that shape the policies and practices. What it finds is a notable silence on the topic, which is the product of a combination of institutional and ideological commitments. Institutionally, the Bank is the product of a state-centred discourse and it reproduces this discourse through its organisation and management, which are structured around lending to individual nation-states. Ideologically, the domination of the post-Washington Consensus (PWC) in the Bank reinforces the Bank’s state-centric model of development – it promotes neoliberal states, structured in ways that serve Western-dominated, liberal capitalism. Further, the New Institutional Economic (NIE) analysis underpinning the PWC methodologically and philosophically largely ignores regional political economy.
NIE has been a major influence on the Bank’s approach to development since the late 1990s. Indeed, it is the source of large part of the so-called post-Washington Consensus (PWC) – which is how critical political economists have labelled the Bank’s new development policy approach. The ‘post’ in this case, is an indicator of the degree of continuity with the neoliberal Washington Consensus marked, in particular, by the continuation of a conservative/neoliberal approach to monetary and fiscal policy. The PWC does suggest that the Bank will pay greater attention to the specific situation of each borrower and this should manifest itself in better developed socio-economic analysis of local conditions as well as consideration of global and regional political economy.
The Bank’s analytical output has included a lot of work in areas connected to the PWC, for example on the topics of the social costs of adjustment and poverty, decentralisation as a policy prescription for increasing participation, ensuring local needs are met and improving governance and the role of social capital in development. However, its lending practices have not matched the changes in its analytical output. With regards to regionalism and regionalisation neither the Bank’s research output nor it lending program have kept pace with the broader interest in this topic.
