Negotiating North-South relations: The World Bank’s Grain Marketing Project in revolutionary Ethiopia, 1974–1978

Abstract

This article explores the driving reasons that shaped the World Bank policy toward Africa in the 1970s through the lens of the relationship between the World Bank, western countries, and revolutionary Ethiopia from 1974 to 1978, during the negotiations for the Grain Marketing project (GMP). The trajectory of the GMP reveals that the World Bank’s attitude was shaped by external and internal factors as well. The organization operated under pressure of major Western shareholders and associated business groups demanding compensation for the nationalization of their assets. The continuation of negotiations and the final approval of the GMP, however, were primarily shaped by the demands of the Ethiopian government and the internal confrontation between the advocates of macro-economic orthodoxy and the supporters of a flexible approach to development. According to the latter, the relationship with Addis Ababa was a critical test for the World Bank’s legitimacy in sub-Saharan Africa at a time when demands for a New International Economic Order challenged established patterns of North-South relations.