Political interference in the World Bank by the likes of Britain’s Hilary Benn is bad news for developing countries. While organisations like Transparency International rightly point out the damage corruption does to the fight against global poverty, political pressure means the Bank’s anti-corruption agenda is being seriously undermined. Thankfully, private capital markets are making the World Bank increasingly irrelevant. As the Wall Street Journal reports:

The most disconcerting news for World Bank fans are the sections [from a report] on private credit markets. Developing countries increasingly are borrowing from markets instead of from multilateral institutions. As of 2006, all but 13 of the 135 “developing” countries have borrowed from private banks at least once since 1980, while 40% have issued sovereign bonds during the same period. Ghana, Kenya, Nigeria and Zambia are expected to issue bonds for the first time within the next few years. And corporations are now bigger borrowers than governments, a welcome development because companies are, on balance, more likely to create growth with the money instead of graft.

These findings - which show record private capital inflows into the developing world - advance the case for liberating the World Bank from political interference and seeing it operate on a commercial basis.