“MDBs [multilateral development banks] must improve the tools and methods they use to analyze additionality, guard against crowding-out, and maximize development impact,” Malpass said. “We should set as a goal that every project and intervention an MDB undertakes moves a borrower along a continuum toward the ability to finance their own development without donor support. In seeking this transformation, we need to challenge the multilateral organizations to rethink their methods and operations.”
Lawmakers said the IMF and World Bank should not try to do too much, but rather focus on the basics. For example, speakers at the hearing said that the practice of extending loans to middle- and high-income countries has undermined their core missions.
“I thank Under Secretary Malpass for his testimony today and I look forward to continuing to work with him to reform international financial institutions including the World Bank, the IMF, and other regional development banks supported by the United States,” Subcommittee on Monetary Policy and Trade Chairman Andy Barr (R-KY).
“Exerting U.S. leadership in the world, and ensuring international financial institutions preserve their legitimacy, means advocating that they concentrate on clearly defined objectives, and are held accountable for results,” Barr said. “Leadership at these institutions doesn’t boil down to who can open their checkbook the fastest. Leadership means demanding economic growth, institutional transparency, and responsible project management that puts beneficiaries first.”