From the TUC

World Bank edges away from neoliberalism on jobless growth, deregulation

02 Oct 2012, by in International

This month’s annual meetings of the World Bank and the IMF in Tokyo will see renewed lobbying by global unions for decent work and against austerity. So the publication on Monday night of the World Bank’s flagship annual publication, the 2013 World Development Review, was a major event – and one that the International Trade Union Confederation (ITUC) was able, for once, to welcome.

Entitled simply “Jobs“, it marks a significant shift away from the old Washington consensus that said growth was good regardless of who benefitted, and that workers’ protections were bad for growth. There’s still a distinctly anti-public sector bias, and the ITUC is worried that the Bank’s new concept, ‘good jobs for development’, consciously sidesteps the work of the ILO on ‘decent work’ (although others disagree). But there is much to welcome, not least new World Bank Director Jim Kim’s introductory remark that:

“The problem for most poor people in (developing) countries is not the lack of a job or too few hours of work; many hold more than one job and work long hours. Yet, too often, they are not earning enough to secure a better future for themselves and their children, and at times they are working in unsafe conditions and without the protection of their basic rights.”

The report stresses that growth needs to provide good jobs at decent wages; that labour market regulation (except at the extremes) does not prevent job creation (as unions have long argued was borne out by the available evidence); and that compliance with the ILO’s core labour standards is needed. If those policies determined what the World Bank actually does, it would be a major step forward (although both the IMF and World Bank have a track record of good policy and bad practice.)

For a start, the World Bank would need to consign the ’employing workers indicator’ of its best-selling guide (Doing Business) to the dustbin of history. That indicator means that countries which flout the core labour standards and other worker protections such as minimum wages and health and safety score highly in the Doing Business rankings. And Bank officials in developing and emerging countries often advise governments to act accordingly. Belarus scored quite high on the rankings, ‘despite’ being a dictatorship with an appalling record of worker and human rights abuses. That sort of example did at least get the ’employing workers indicator’ suspended and it is now the subject of a review – but the 2013 WDR surely now suggests that the indicator be laid to rest permanently.

Opinion is divided on how positive the WDR 2013 is, with the ITUC being more cautious than others. But it is clearly a step forward, and the TUC will be urging International Development Secretary Justine Greening to take its lessons on board when she travels to Tokyo, just as we have urged George Osborne to learn the lesson of the labour market across the developed world that austerity isn’t working.

4 Responses to World Bank edges away from neoliberalism on jobless growth, deregulation

  1. Jayarava
    Oct 2nd 2012, 7:59 pm

    Amidst all the hype, and Labour talking up the cult of Ed Miliband despite very little in the way of policy to chew over, here is some concrete good news. Is neo-liberalism finally losing it’s grip on the minds of economists? It’s too soon for that, but perhaps the disaster that is the global economic crisis, and the increasing economic inequality neo-liberalism has created since the 1970s are finally beginning to register in the minds of economic thinkers and policy makers.

    Despite the cynicism the author expresses, it was interesting to read this on the same day as this: “Stephen Hester renounces Milton Friedman’s doctrine of greed”

    Thanks for a bright spot in my day.

  2. Owen Tudor

    Owen Tudor
    Oct 2nd 2012, 9:14 pm

    Many thanks for your comments and that link (Stephen was in my PPE class at university when he was a left-wing Tory: not an easy thing to be in 1979!) In both his and the World Bank’s case, let’s hope the words are now matched by the deeds. Thanks also for your support for the Robin Hood Tax. If I can return the favour, people should have a look at

  3. World Bank discovers jobs are good | STRONGER UNIONS
    Oct 3rd 2012, 8:12 am

    […] blogged more comprehensively on Touchstone about the World Bank’s latest report on jobs, but just had to share this (thanks to @UNI_PM). […]

  4. World Bank urged to back Robin Hood Tax | ToUChstone blog: A public policy blog from the TUC
    Oct 10th 2012, 12:30 am

    […] Leading unions, AIDS charities and development NGOs have urged the new head of the World Bank, Dr Jim Kim, to back a Robin Hood Tax as an innovative way to raise funds for international development. The health expert who was appointed by President Obama (the US usually gets to choose who heads the global development bank) is expected to be more progressive than previous incumbents, as his recent introduction to the 2013 World Development Review on Jobs showed. […]