The operational policies of the World Bank and the International Finance Corporation

Abstract

International financial institutions (IFIs), such as the World Bank and the International Finance Corporation (IFC), have progressively refined their own operational policies and established institutional accountability mechanisms, such as the Inspection Panel and Compliance Advisory Ombudsman, in response to external and internal demands for their enhanced accountability. This article argues that these two developments are instrumental in transforming IFIs such as the World Bank and the IFC into law-making and law-governed institutions. We argue that the operational policies, as well as the institutional processes surrounding these policies (that is, rulemaking, rule-application and rule-enforcement processes), should be assessed in legal terms - even though the legal nature of the operational policies are contested, and the policies are only applicable to IFI staff and their borrowers. The main objective of this article is to provide an analysis in support of this contention.