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The World Bank should work with the private sector

April 5, 2011

I have yet to see any evidence in the Middle East disturbances of the emergence of any regimes that are either committed to the free market or fully democratic. In addition, many of the region’s countries, such as Libya, have massive oil revenues and hence no need for outside financing. Hence the World Bank’s first priority should be to do no harm, not to discriminate between existing imperfect regimes and mob-fueled changes that have no certainty of producing better outcomes.

As new regimes emerge after reasonably free elections, the Bank should be open to expanding its operations, working as far as possible with the emerging private sector rather than the government authorities, to avoid corruption, political favoritism and politically backed make-work schemes. However it should not attempt to influence political outcomes, which it lacks the expertise to do and will generally get wrong.

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