Bank failures...but not the kind you think

The world's international financial institutions have had a rough day. A new study linked the rise in tuberculosis in Eastern Europe and Russia with IMF loans to post-Soviet countries. The study comes on the heels of an internal review by the World Bank found that the Group has done a lackluster job of enforcing environmental standards in developing countries.

The first study does not imply causation, regardless of how much the NY Times wants it to, but merely an association. Though disturbing, it should not be surprising that IMF loans, which advocate government thrift (often by cutting social programs), result in a rise in disease. Government doctors lose jobs when socialized medicine is cut and disease rates go up - especially TB, which requires short term care and intensive medical supervision. But ideally, as economic growth spreads through the private sector, health care should become a social privilege available to most, if not all. Just don't tell the US government that the Washington Consensus might apply at home. 

More troubling than an obvious, though somewhat scary, epidemiological correlation is the World Bank's apparent disregard for environmental protection. Environmental safeguards may be a vanguard luxury of the US left but for developing nations nature cannot be divorced from responsible development. Water scarcity due to Bank sponsored agricultural expansion and recent food scares prove that attention must be paid to the environment to create sustainable development. Without proper institutional protection, the environment suffers, citizens of the developing world suffer, and the world suffers as climate change grows more ubiquitous.

The IFIs may be growing less relevant in a globalized world but that does not excuse such behavior. Shape up.