The World Bank is a multilateral institution, based in Washington DC. It lends money to the nations through their central governments as well as to the government agencies so as to fuel all the necessary development projects in the respective countries. For over several years, there has been several stringent conditions called “Structural Adjustment Programs” that the World Bank has imposed on the recipient countries (Bernard, 2012, p 17). This policies force such recipient countries to adopt some of the reforms for example deregulations of the capital markets, downsizing of the public programs for social welfare as well as privatization of the state companies. These are some of the new institutional economics that have been selectively and strategically used by the World Bank not to re-think or to re-evaluate its agenda but to buttress existing policy priorities. This has had an effect to the borrowing countries as these policies might not be applicable in all forms of government systems of all the member countries (Vittas, 1986, p 283). Some of the countries are capitalists while others are socialists and such cases, such policies institutionalized by the World Bank may not be favorable.
Some of the existing policy priorities looks forward in implementing several reforms such as privatization of public institution. This looks forward as competent delivery of public services since some of the governments are always reluctant when it comes to provision of public services such as health care services, educations among others (Abel, 2007, p 32). Furthermore, the World Bank also looks forward as fighting poverty in all the member state by implementing some of the policies that will enable the respective governments to fight the problem of poverty in their countries to ensure that there general improvement in global standards of living more so in the developing counties that are still affected by absolute poverty.
One of the key agenda of World Bank is to prioritize in the economic growth of all the member countries. Since the World Bank is an international lender, it needs to be at a strong financial position so as to meet all the loan demands from all the emerging markets in case there is deteriorating in the global economy (Hone, 1973, p 105). By focusing on global economic expansion, the World Bank therefore looks forwards at coming up with strategies as well as policies that will ensure that there is economic growth in all the economies of the world by lending money to the governments so as to come up with development projects that will contribute to global economic growth.
While using this new institutionalized economics, the World Bank utilized them selectively and strategically as not to interfere with some of the prioritized policies that includes global economic growth and poverty eradication among the member states especially the developing countries. This is also done so as to ensure that they do not evaluate or re-think on the already institutionalized policies while using the new institutional economics (Green, 1983, p 35). World Bank also comes up with reforms that are imposed on all the lending governments. This reforms might pose an impact to the recipient country in one way or the other. Such reforms such as privatization of some of the public sectors to ensure efficient delivery of such services may have an impact to the country (Stamm, 2004, p 674).
To conclude, it is true that the World Bank has used New Institutional Economics very selectively as well as strategically not to re-think or even re-evaluate its agenda which is global economic growth and poverty eradication in all of the member states but to buttress its existing policy priorities.