Donovan, House Strengthen World Bank Accountability Mechanisms
Washington, DC – January 17, 2018….Congressman Dan Donovan (NY-11), a member of the House Foreign Affairs Committee, today voted to support the World Bank Accountability Act. The legislation, which passed the House by a 237-184 margin, institutes necessary reforms at the World Bank to ensure proper use of U.S. tax dollars, fight corruption, strengthen institutional management accountability, and combat violent extremism.
Congressman Donovan said, “The United States understands that ‘America first’ doesn’t mean ‘America alone,’ which is why we remain a leader in development assistance. However, it would be irresponsible if we didn’t evaluate whether our investments are being properly used and leading to demonstrable results. Today’s legislation will increase accountability and fight corruption at the World Bank, helping to ensure that funding goes towards critical development and anti-poverty missions.”
The bill makes clear that future funds for the World Bank’s International Development Association (IDA) will be withheld until the Treasury Department reports that the institution has:
- Implemented staff evaluation standards that prioritize anti-poverty results;
- Required that economic freedom be emphasized in Bank policies, directives, and country strategies;
- Strengthened the quality and quantity of forensic audits to identify project corruption;
- Bolstered efforts to combat extremism through projects;
- Denied aid to state sponsors of terrorism; and
- Banned assistance to countries that fail to enforce UN security Council sanctions against North Korea.
Additionally, the bill funds the World Bank’s IDA at levels requested by the Trump Administration. The IDA helps the world’s poorest countries by providing loans and grants for anti-poverty and economic growth programs.
Oversight of the World Bank conducted by the House Committee on Financial Services found that the organization has fallen short in its anti-poverty priorities for several reasons, including institutional incentives that prioritize generating high loan volume, lending to corrupt regimes, and insufficient attention to free enterprise in IDA supported countries.