Niehuss, who has over 20 years of experience in the field of development and international finance, is a former loan officer and director of co-financing at the World Bank.
"We wanted a speaker who could explain the institutional perspective because at college, we mostly hear of criticisms of these organizations," said Adam Nagorski '02, an officer of the Foreign Policy Forum, which sponsored the speech. "I think he was not out to say that these institutions are infallible, but he explained that they are there to help people."
Niehuss began by explaining that the World Bank and International Monetary Fund (IMF) began operating after World War II to try to avoid the international economic problems of the Great Depression.
The World Bank acts as "a financial intermediary whose job is to get the capital to the places it is needed," said Niehuss. "[The IMF's] main activity is to provide funds to countries that get in trouble with their economies."
While the IMF provides short-term assistance, World Bank funding may be provided for a much longer time frame, often 15 to 20 years, Niehuss explained.
"They are just a small part of a universe of international financial institutions," he added. "Every region has a bank of its own that's kind of a clone of the World Bank."
Both the World Bank and the IMF currently put conditions on their loans that have led to many protests and much controversy.
"The theory is that in many countries, before you can have projects that work, you have to have fundamental policy changes," said Niehuss.
"Should there be policy-based lending at all?" asked Niehuss, explaining that while most economists say yes, many have reservations. "While there's general agreement on the need for policy-based loans, there's a lot of criticism of the specific policies."
For example, Niehuss said, many economists criticized the "shock therapy" employed in Russia, in which the country was encouraged to privatize extremely quickly.
"For many countries, [IMF policies are] imperialistic. And they can have a particularly harsh impact on the poor," he added. "The argument is, the IMF doesn't consider the political, the human, or the cultural implications of their policies."
Niehuss pointed out that the institutions helped in many crises, such as the oil crisis of the 1970s, and they have been adapting. "The IMF and the World Bank are making major efforts in recent years to try to create social safety nets," he said. "Whether they've been successful or not, people can disagree, but it is certainly on their agenda. They've got to be more flexible and open."
On the common criticisms of IMF and World Bank attitudes toward environmental concerns, resettlement, human rights and consultation with affected people, Niehuss said, "They've got pretty good policies in place, but you could say they're not implemented very well."
But, he said, the World Bank and IMF would respond that some things are out of their control. "They're going to say: Look, the problem is not with us, it's with the borrowers," he explained. "I think there's a grain of truth in that. For a poor country that's struggling to feed its people, the environment might not be a high priority issue."
Niehuss ended the lecture part of his presentation by raising several questions, the first of which was if the World Bank and IMF should be phased out or abolished. "If they're doing their job as development institutions, eventually they're going to bring countries to the level where they don't need these institutions," he said. "That's got to be the long-run objective."
On the question of if the institutions should be reformed, Niehuss said, "The answer is, of course. Absolutely."
Both Amherst and Five-College students at the speech, some of whom had strong views on the issue, remarked that they thought Niehuss' presentation the issue clear and fair.
"He didn't piss me off as much as I thought he would," said Liz Moverman, a senior at the University of Massachusetts. "He did a good job of taking an almost neutral stance."
But a few students said they wished he had gone more in depth on some issues. "He was clearly critical of the enforcement of some policies, but there wasn't any attention to what anyone can do about the problems," said B.R. Shute '01E.