What does the World Bank do and how does it impact on education?

The origin of the World Bank goes back to the creation of the International Bank for Reconstruction and Development (IBRD), a product of the July 1944 Bretton Woods conference, when it was also decided to create the International Monetary Fund (IMF). In the following decades, there emerged around and linked to IBRD: the Institute of Economic Development in 1955 (renamed the World Bank Institute in 2000); the International Financial Corporation in 1956; the International Development Association in 1960; the International Centre for Settlement of Investment Disputes in 1966; and the Multilateral Investment Guarantee Agency in 1988. This set of institutions forms the World Bank Group, based in Washington DC (US). The so-called “World Bank” corresponds to IBRD and the International Development Association (IDA).

Fundamentally, the World Bank carries out four types of activity: a) loans and credits for projects and policies; b) advisory services, technical assistance, and advocacy in favor of a determined policy agenda; c) specialized economic research in all areas of development; d) mobilization and connecting of public and private agents to multilateral global initiatives.

Financial activity is vital for the reproduction and expansion of the World Bank. It is through money that the Bank transmits and disseminates its political prescriptions to governments in developing countries. Loans and credit have conditionalities (requirements) built in, which can be specific (restricted to the scope of projects), or quite broad (when linked to adjustment loans) and affect the configuration of public policies and public administration itself. Although the conditionalities can have a greater or lesser coercive nature, depending on the country and the economic situation, in general they are more effective when there are domestic interlocuters committed to them and who can implement them. In cases like this, local politicians often use these conditionalities as political imperatives against their immediate adversaries, in order to implement unpopular reforms. In general, this occurs when “first generation” structural reforms are in question, aimed at macroeconomic adjustments and fiscal austerity. Relatively simple, rapid, and drastic to implement, these reforms have a high public visibility and immediate effects, but the political costs are widely diluted among the population.

In these situations, normally contexts of crisis, decision making could be led by an insulated elite at the top of the Executive. On the other hand, when decision making is opened to a large number of interlocutors from the political system, the effectiveness of conditionalities tends to be much more difficult. This is the case of the wide-ranging “second generational” institutional reforms, aimed at redesigning specific public policies (such as education, health, environment) and the reconfiguration of the actual political and administrative structure of the state, such as, for example, the de-constitutionalization of public expenditure, the independence of the Central Bank, wide-ranging regulatory changes, the more difficult political privatizations, etc. These reforms have a slow and complex process, and affect the interests of specific social groups, and tend to have a greater capacity for vocalization and resistance (^{NAÍM, 1994}; WORLD BANK, 1997).

These processes involve greater political consultation and the World Bank may have to more openly exercise advocacy for these reforms. It is worth emphasizing that the Bank lends not only to the Federal Union, but also to states and municipalities, which in federative countries (such as Brazil), can lead to the capillarization of their operations throughout the national territory. Loans normally induce changes in the composition, degree of priority, and the use of public expenditure, since governments have to disburse a financial counterpart, and afterwards have to reimburse the World Bank, taken to be a preferential creditor, and in a strong currency.

The second activity consists of providing technical assistance and advisory services to governments of developing countries. Historically, the Bank always negotiated with very select groups of national interlocutors (in general from the economic or planning area), at times trained and socialized in international circuits for training technocrats, in which the Bank itself plays a part as an educator. Since the 1980s, thanks to increased pressure for transparency and accountability, the Bank has been obliged to open processes of public consultation and allow the participation of varied groups (^{GWIN, 1997}; ^{BABB, 2009}). At the same time, to the extent that the Bank’s policy agenda expanded and diversified, coming to cover all areas of development, and it became impossible to implement this from top down, for which reason the Bank had to assume an increased advocacy role, in order to mobilize political support in favor of determined agendas. This means that in client countries, the World Bank not only deals with niches of the bureaucracy, but also with actors of civil society.

The third activity consists of the production of specialized knowledge about international development. Widely diffused, the Bank’s research involved: a) the construction of concepts, definitions, and norms, with the objective of delimiting the legitimate terms of the debate on development; b) the preparation of indicators (metrics) and classifications, based on which international rankings are constructed which are increasingly comprehensive in relation to the “quality” of public policy and the “institutional environment” necessary to do business in client countries; c) explanations about the causes of development problems and the preaching of measures which government should or should not adopt, and in which manner, to overcome them. In addition to research based on its own staff of commissioned with external consultants, the Bank also acts as a sound box and transmission belt for determined models, concepts, and ideas produced by other organizations.

The intellectual legitimacy of the Bank is based on the premise of the neutrality of technical knowledge and the multilateral nature of the institution (perceived as less politicized than international aid bilateral organizations). Although the World Bank has cultivated the appearance of technical neutrality, the research it carried out is essentially normative. The idea of the neutrality of knowledge neglects any consideration of the economic, social, political, and ideological context in which all knowledge is produced, the interests in dispute, and the functions which knowledge can or should fulfill (^{VAN WAEYENBERGE; FINE, 2011}). Generally speaking, pressed by the need to make loans, the Bank carries out research that legitimate its policy agenda and its financial priorities (^{BROAD, 2006}). There are thus structural factors which frame and shape the research activity it carries out (^{STERN; FERREIRA, 1997}). In a loan oriented institution tied to political prescription, research has to be useful to these operations.

The World Bank’s fourth principal activity consists of measuring, distilling, and connecting interests, visions, and norms, and channeling them into global multilateral campaigns and initiatives which cover governments, companies, NGOs, philanthropic foundations, academic sectors, and other international organizations in questions of health, the environment, and education, amongst others. In fact, a considerable part of the influence of the World Bank is due to its capacity to establish material connections and agreements – whether more or less pragmatic – between public and private agents around determined development agendas.

General Lines of the World Bank’s Educational Agenda

The World Bank’s action in education began late compared to the United Nations. Only in 1962 did the institution make the first loan to the sector, in the following years, concentrating on funding the construction of school infrastructure (buildings, libraries, laboratories) and the training of workers in large development projects (dams, roads, etc.). In other words, initially education projects privileged more aspects of physical infrastructure and training for special tasks (^{PEREIRA, 2010}).

During the Robert McNamara administration (1968-81), education came to be considered a fundamental sector to push forward the “assault on poverty”, a slogan imprinted by McNamara as part of his broader strategy to promote capitalist development as a preventative measure against social revolutions in what was then called the Third World. According to him, “in a society which is modernizing, security signifies development [...]. Without internal development, at least at a minimum level, order and stability are impossible” (McNAMARA, 1968, p. 173). With this perspective, education projects funded by the World Bank were aimed at specific social groups, who lived in conditions of extreme poverty, in order to improve their “human capital” and their atomized insertion in lucrative mercantile activities – in general associated with agriculture. In other words, these projects combined the late incorporation of the concept of human capital with the adoption of the principle of focalization on specific population groups, immunizing “investment in individuals” against any redistributional consideration.

During the 1980s, the neoliberalization of international capitalism strengthened the role of the World Bank as the intellectual leader of the “structural adjustment” (^{STERN; FERREIRA, 1997}; ^{PEREIRA, 2010}). The expression was born out of a new type of loan from the institution which began in 1980, one that was rapidly disbursed and had the purpose of funding the adoption of policies (and not the implementation of projects). It thus involved a type of more politicized and intrusive action, based on more encompassing conditionalities. The external debt crisis in countries from the periphery of the system (principally Latin America and part of Africa) created the conditions for adjustment loans to be widely demanded, in exchange for implementing economic liberalization measures. In this period, the World Bank’s agenda was concentrated on the promotion of the macro-economic and fiscal adjustment in order to guarantee the payment of external private creditors (^{BABB, 2009}; ^{TOUSSAINT, 2006}). However, in addition to macroeconomic and fiscal policies, all social policies, including education, were also “adjusted”. Propelled by the institution, the hyper-marketized ideology – based on the opposition between state and market – sought to legitimate a vision of education as a market open to private investment. During this period, the fiscal adjustment strongly impacted on the budget for education and the other social policies, including the restoration of the entire social area aimed at focusing public expenditure on the poorest groups, on the one hand, on the recovery of costs (charging users) whenever possible.

From 1990 onwards, shaken by the accelerated transition of Eastern European societies to neoliberal capitalism – baptized then as “shock therapy” –, the World Bank expanded its political agenda beyond the emphasis on the macro-economic adjustment, looking at the restructuring not only of economies, but also of societies. In the field of education, the institution advanced the slogan of “education for all”, which in practice signified committing itself to the multilateral effort of universalization of access to basic education in a few years. In the Bank’s view, this target would only be reached if national states focused public expenditure on the poorest segments of the population, in order to improve the human capital of individuals and raise their productivity in market relations. In the name of the “inclusion of all” and the “reduction of poverty”, public expenditure on education should no longer follow universal criteria of distribution, but rather focused ones. In this way, while the state would provide basic education to the poorest, for those who could pay for it – according to poverty lines defined in a very controversial manner – the market would be the path. The normative primacy of the fiscal adjustment remained untouched. Gradually, the educational agenda of the institution became more ambitious, and it began to prescribe a systemic reform of the sector through the centralization of the definition of the curricular matrix, administrative decentralization (operational) and, above all, the adoption of assessment instruments based on quantifiable and nationally and internationally comparable learning indicators (metrics). The participation of the private sector (profit and non-profit) in education was praised as part of its conversion into a sector of competitive and globalized services (^{MUNDY; VERGER, 2016}; ^{BONAL, 2002}; VERGER; ^{JONES, 2007}; ^{HEYNEMAN, 2007}; WORLD BANK, 1996).

The hyper-marketized vision of the previous decade – the more state there was the less market – gave way to an idea of complementarity between state and market, according to which the “effective” state is the one which acts as a “partner” of capital, which should create and guarantee the optimal conditions for the maximization of private profit (WORLD BANK, 1991, 1997). This formulation was rapidly associated with the discourse that the success of economic liberalization depended on “good governance” among public and private actors in relation to tangible objectives, legitimating the direct intertwining of the private sector within public administration (WORLD BANK, 1992), in order to mold it from inside in its own image and likeness. Since then the Bank has made an increasing use of structural adjustment loans, using them as instruments to reform the policies of client countries. Governance became the general slogan which agglutinated the policies, techniques, and knowledge necessary to propel and direct social changes within states without direct political control (^{WILLIAMS; YOUNG, 1994}; ^{PEREIRA, 2016}).

Since 2011, the World Bank has emphasized that the principal education challenge no longer consists of the universalization of access to basic education (which is quite advanced, albeit incomplete), but rather the universalization of learning (WORLD BANK, 2018, 2011; ^{ROBERTSON, 2012}). Curiously, in the vast repertoire of the organization’s educational recommendations to achieve this, what appears most is not pedagogy, but rather administration. Actually, the Bank’s approach has sought to impact the design and dynamics of school administration and the educational system, conceiving “educational reform” through administrative principles and not pedagogical or political ones. The absence of any serious consideration of power and politics results in an administrative treatment of education, which excludes from the discussion economic, political, and social transformations caused by decades of economic liberalization.

Not by chance, the so-called New Public Management (NPM) is assumed and advocated by the World Bank as a reference for the global reform of the public sector. This applies knowledge and instruments of business administration to the public sector, with the aim of increasing efficiency, effectiveness, and accountability. In other words, good public administration is the one which mimics the practices and visions of the large private companies. NPM promotes as principles the radical separation of the provider, executor, and user, the fragmentation of public services into more autonomous administrative units (in order to compete for resources), and administration based on results measurable by metrics. In this logic, the state should not be the only (or even the main) provider of education, and public education should be provided by non-profit making private entities, through public private partnerships, or delegated to private schools funded with public money through vouchers (^{VERGER; NORMAND, 2015}; ^{ROBERTSON; VERGER, 2012}). In other words, when applied these principles rationalize the intertwining of the private sector directly in the public sector and establish generalized competitivity among public institutions, on the one hand, and between public and private sectors, on the other. The directives of NPM have pretensions for global application, but are translated into distinct policies in the different levels of government, assuming differentiated meanings and implications, according to local circumstances and the interests in dispute.

The World Bank in Brazilian education: between the fiscal adjustment and the pandemic

The World Bank’s actions in Brazilian education involve political advice, technical assistance, and specialized research, as well as loans aimed at public policies and projects. Without a doubt, following the money is easier than assessing the magnitude of “non-financial” activities, as well as the intellectual influence of Bank publications. In any case, an examination of the loan portfolio for the country in the period from January 1989 to July 2020 reveals some interesting aspects.³ In first place, the total portfolio is US $46.3 billion in 324 operations, of which only US $2.1 billion (4.5%) in 15 operations was used for education.⁴ It can be perceived that, given the nominal Brazilian GDP (US$ 1.8 trillion) or the authorized budget of the Ministry of Education (MEC) in 2019 (R$122 billion, around US $23 billion),⁵ the amounts in question are not significant. It means that money is not the principal product of the World Bank, but rather a vehicle to disseminate what was really important: ideas, norms, and prescriptions about what governments should or should not do and in which manner, in questions of development. Second, out of the total of 324 financial operations, 150 were contracted by the Union (46%), 152 by states (47%), and 22 by municipalities (7%). In values, this amounted to US $22.3 billion contracted by the Union, US $21.8 by states, and US $2.1 billion by municipalities.⁶ Strictly speaking, this is the great difference in relation to other Latin American countries: the importance as World Bank clients not only of the Union, but of states and municipalities, which indicates the complexity and capillarity of the relations between the public authorities and segments of civil society and the business class with the World Bank in the country.⁷

In third place, what calls attention is the fact that, of all the governments in the federal sphere since 1989, only those of Lula and Dilma did not contract loans for education,⁸ although the municipal administration of the Partido dos Trabalhadores in Recife and the state administration of the Partido Socialista Brasileiro in Pernambuco, an ally of the PT, did so in 2012 and 2009, respectively.⁹ In educational questions, of the fifteen operations carried out, thirteen were contracted by administrations from the center and the right (PMDB, PSDB, and PFL).¹⁰ The following table provides information about education projects funded in the period in question.

In November 2017 the World Bank published the report entitled “A fair adjustment: efficiency and equity of public spending in Brazil.” Arguing that the public sector spent a lot and badly, the Bank presented an extensive role of prescriptions in favor of cutting funds for public employment, public procurement, social security, social welfare, and health, education, with the aim of maintaining the expenditure ceiling defined by Constitutional Amendment 95/2016. The report had a large repercussion in the principal newspapers of the country, producing a strong contrary reaction (DRUCK et al., 2018, CARDOSO Jr, 2017; ^{LOPES; ROQUE, 2017}; ^{ALMEIDA; REIS, 2017}). The debate soon polarized and brought to the public scenario the discussion about the methodological consistency of the statistical data on which the Bank’s recommendations were based.

In the chapter on education, the central argument is that the public sector spends a lot and badly in fundamental, second level, and third level education, for which reason the sector could economize much if it adopted private sector practices where, according to the Bank, the cost per student is much lower, there are more students per teacher, less student failure, less evasion, and relatively higher marks in largescale exams. The model to be copied by public schools was that of the large private school located in the biggest cities in the country. The same applied to federal public universities. At the same time, in addition to inefficient administration, the World Bank also stated that the principal factor responsible for the poor performance of public education was the low quality of teachers. Pay for teachers in basic education was described as, on average, adequate (in line with countries of similar per capita income), while the pay of federal university professors was considered high, above what is paid in countries with higher per capita income than of Brazil (WORLD BANK, 2017a, p. 127-128).

For the World Bank, since the principal problem in public education is not the lack of resources, but rather the inefficiency of administration, it is possible to improve the performance of the sector by spending less at all levels. In this sense, the report advocates the decoupling of educational expenditure from any constitutional obligation, in order to allow governments not to have to spend the minimum level, something rarely reached anyway. Furthermore, the Bank defends the reform of state pension plans for teachers (whose earnings are “relatively generous”), with the aim of reducing their value and thus helping to contribute to the fiscal adjustment (WORLD BANK, 2017a, p. 127-28).

Alongside the more general recommendations, the World Bank also prescribed specific measures for the different levels of public education. In the case of the fundamental and second levels (where the majority of places are offered by the state), the Bank recommends not replacing retiring teachers until 2027, in order to increase the pupil/teacher ratio (which according to the Bank is very low in the country). Furthermore, the institution advocates a reform of school administration based on three measures: a) payment of individual bonuses to teachers and staff, according to performance in school; b) the hiring of private schools to provide “educational services” (charter schools); c) establishment of public-private partnerships to provide teaching material, provide assessment instruments, and offer teacher training courses, amongst others. In the case of higher education (where it is the private sector which offers the majority of places), the World Bank’s recommendations are: a) reduce public expenditure per student (which would oblige universities to review their cost structures and look for funding from other sources); b) charge fees to those students who “can pay” (the 40% richest in the population); c) provide student credit to students from public universities; d) provide grants to the poorest students (the 40% poorest of the population) (2017a, p. 136-138). It should be noted that “the assault on poverty” continues to be used to delegitimate the principles of the universal gratitude of public higher education.

It is important to note that the report cited is in line with the 2018-23 Strategy for Brazil, the central document which guides the relationship between the institution and its client. Dated May 2017, the 2018-23 Strategy is entirely anchored on the defense, on the one hand, of a broad and drastic fiscal adjustment, to be imposed on social policies and public employment, and, on the other hand, on regulatory changes which reduced the costs of the private sector and increase competitivity. In the case of education, the Bank’s main thrust in this document is the reform of second level education, seen as an “anchor” for the institution’s other interventions in the sector.¹¹ In addition to advocating the establishment of public-private partnerships in school administration, in the name of school “autonomy”, the World Bank also announced the strengthening of the role of the International Financial Corporation in the funding of and provision of consultancy to large business groups in higher education, aimed at lower and middle income groups (WORLD BANK, 2017b, p. 22).

Has the outbreak of the Covid-19 pandemic modified this agenda in any way? Everything indicates that it has not. Three reasons support this hypothesis.

First, the World Bank president stated that the release of resources to cushion the impact of the pandemic will depend on the adoption of policies such as the liberalization of trade and the deregulation of the economy (promoting for example, private health markets).¹² Policies of this type have been prescribed or even imposed for forty years by the World Bank, usually in partnership with the IMF, and there is much evidence about the socially regressive effects caused or aggravated by them (^{KENTIKELENIS, 2017}; LABONTÉ; STUCKER, 2016).

In second place, the rapid aid package announced by the institution has been channeled through the International Financial Corporation, the World Bank agency which lends directly to the private sector. Its mission is to fund the expansion of private companies, both national and foreign, in poor and middle income companies. In the health sphere, this implies the stimulation of public-private partnerships, whose growth usually occurs to the detriment of universal public systems (^{RÜCKERT; LABONTÉ, 2014}), the same has been occurring in education (^{MUNDY; MENASHY, 2012}; ^{ROBERTSON; VERGER, 2012}).

In third place, the prescriptions of the World Bank to fight the pandemic, made directly to client countries, do not question the neoliberal agenda, to the contrary. The case of Brazil is illustrative, since it is the third largest historic client of the institution (after only India and China) and is a middle income country – which for this reason has considerable room for bargaining with the Bank, to the contrary of what occurs with poor countries. In the extensive report about the impacts of Covid-19 in Brazil, the World Bank (2020), despite the defense of temporary actions which result in the increase of public expenditure, continues to advocate the normative primacy of the fiscal adjustment and a wide-ranging agenda of neoliberal reforms. Some points of this agenda deserve to be focused on: a) the decoupling of public health expenditure from the minimum level defined constitutionally; b) the freezing of public pay, combined with the suspension of promotions and the halting (except in health and security) of the hiring of new public employees;¹³ c) the finalization of the cycle of state social security reforms; d) greater control, supervision, and sanctions in relation to the fiscal performance of federative bodies, in order to maintain expenditure ceilings. The World Bank also preaches the return of neoliberal reforms – initiated by the Temer administration, continued by the Bolsonaro administration, but paralyzed by the outbreak of the pandemic –, which implies:

A continued opening of markets to greater competition (beyond trade); a reform of the country’s byzantine tax system to enable the efficient allocation of factors; and a more general reform of the business environment. Given the significant blow to the country’s fiscal space, it will be important to also communicate how the fiscal consolidation agenda will be maintained — and potentially tightened — to reach the ultimate target of recreating fiscal space. With regard to monetary policy, (...) it will be more important than ever to guarantee the de jure independence of Brazil’s Central Bank. (WORLD BANK, 2020, p. 134).

For this, the World Bank announced that it would openly perform an advocacy role, in order to construct “the evidence and public consensus for private sector-led development” (2017b, p. 23), which shows the encompassing, politicized, and intrusive nature of its action.

Conclusion

This article discusses the educational agenda of the World Bank, arguing that it has an economistic bias – centered on the formation of human capital to increase the productivity of labor at the lowest possible cost – and is concerned with the formation of economies that are increasingly competitive and globalized, under the leadership of private capital. According to the Bank, public education should be left in the hands of economists and administrators, so that it can be run by copying the practices and forms of organization of private educational companies. In this sense, for the Bank, the educational reform necessary to overcome the actual “crisis or learning” consists of the interweaving of the private sector – both philanthropic and lucrative – within public education, in order to reconfigure it from within, according to the three fundamental principles of the New Public Management, which are: radical separation between provider, executor, and user: autonomy for units which provide public services to compete between themselves and with the private sector for resources; and administration based on results measurable by metrics and internationally and nationally comparable.

Taking the Brazilian case as a reference, the article shows that the loan portfolio for education is not very significant within the Bank’s set of operations and involves negligible values when compared with MEC’s annual budget. This means that the funds basically function as a vehicle to disseminate perceptions, norms, prescriptions, and practices on what to do in questions of development, creating obligations and priorities for federal, state, and municipal governments. It is worth noting that of the fifteen projects for education funded by the Bank since 1989, thirteen were agreed with governments led by the center and the right. In fourteen years of PT (Partido dos Trabalhadores) administrations, the Federal Union did not take out any loans for education. This does not exclude a priori the possible influence of the Bank over federal education policy through other means (advisory services, technical assistance, and research), but concretely signaled an inflection in relation to previous governments.

The educational agenda of the World Bank is linked and subordinated to a broader policy program, centered on the normative primacy of the fiscal adjustment and on a list of neoliberal type economic reforms. This agenda is aligned with the interests of Brazilian business conglomerates – some of them funded by the International Financial Corporation – and large global investment funds interested in the expansion of education as a commodity. Furthermore, the educational agenda preaches and supports the attack on the labor rights of teachers in basic and higher education, as well as the demolition of the principle of public higher education being free for all. In everything that it affirms and prescribes, this agenda is opposed to the strengthening of the state capacity necessary to guarantee to all citizens the social and economic rights defined in the 1988 Constitution.

The educational inequalities existing around the world were already abysmal before the pandemic, but with it they will worsen considerably, generating effects whose duration is uncertain. This question will be at the center of multilateral debates in coming years and the World Bank will probably continue to be a relevant political actor in relation to what may emerged in relation to the question of global educational policies.