A Timeline of the World Bank Child Sexual Abuse Scandal

Ajay Banga has acknowledged the bank ignored reports of abuse in schools it funded, and has promised an investigation into a cover up and retaliation against whistleblowers-including under his own tenure.

World Bank President Ajay Banga, former head of MasterCard, has the affected impatience of a businessman. He wants the bank's private sector arm, the International Finance Corporation or IFC, to move "much faster, much quicker." He has said, at times, that the bank must have a bigger risk appetite.

But what happens when the risk is realized and people get hurt?

One embarrassment for Banga's private-sector agenda is that the IFC is currently engulfed in a scandal about sexual abuse in a chain of private schools it funded in Kenya called Bridge International Academies. Details remain murky, but at least a dozen and potentially several dozen child abuse have been identified in Bridge schools.

As is often the case, the alleged cover up has eclipsed the original scandal. Banga has acknowledged IFC staff knew about sexual abuse in schools they were funding and failed to act. Leaked documents suggest something worse: the IFC prioritized its client's financial interests over children's safety, impeded investigation of the abuse, and retaliated against the IFC's own investigators who pursued the case.

There are a lot of moving parts here, so here's my attempt at a blow-by-blow. Much of what we know comes from reporting by Neha Wadekar and Ryan Grim for The Intercept, who interviewed parents in Kenya and World Bankers in Washington. Other pieces have been documented in letters from civil society organizations and members of the US Congress, as well as the IFC's Compliance Advisor Ombudsman's (CAO) own published files on the Bridge case.

Timeline

Counterfactuals and assigning blame

A comment I hear a lot from from fellow economists, trained to think in terms of counterfactuals, is "sure, this is horrible, but presumably Bridge is better than the alternative in government schools."

First, there is no evidence to this effect. We have no comparable data on sexual abuse rates in Bridge schools versus public schools. In Liberia, my colleagues and I did measure children's reports of sexual abuse in public schools versus charter schools run by Bridge, and found rates of abuse were slightly higher in Bridge schools, though the gap was not statistically significant.

More importantly, such comparisons are anathema to the core principles of child protection. If children are abused at school, the school has a responsibility to provide redress to the children and their families-whether that's one case or hundreds. If a school fails to report sexual abuse cases (as Bridge originally failed to do), it must face accountability. If a company entrusted with the care of children conspires to conceal abuse while it woos investors (as Bridge allegedly did), it should no longer be entrusted with the care of children.

If a hypothetical school reduced child abuse rates below prevailing levels but not to zero, and diligently reported and pursued the remaining cases, we would be having a very different conversation. That's not what happened here.

Bridge has demonstrated time and again that it is willing to overlook harm to children to advance its own commercial interests. In our randomized trial in Liberia, for instance, they expelled so many children in an effort to boost their test scores that they managed to quintuple per-pupil expenditure relative to government schools and still reduce secondary school enrollment rates in the communities where they worked. There is an argument to be made that organizations who continue to work with Bridge now do so knowing that they may be putting children in harm's way.

This week the IMF-World Bank Spring Meetings are being held here in DC, and the focus right now is understandably on the IFC's alleged role in aiding and abetting the cover up of sexual abuse. Other Bridge investors should face similar questions-the Omidyar Network, Bill Gates, and the Chan-Zuckerberg Foundation. It is unclear if they had the same knowledge of abuses as the IFC did.

But of course, the lion's share of blame for this tragedy lies with Bridge International Academies and its founders, who surely cannot escape accountability.

Compensating victims

At least two issues remain to be resolved. The first is who is going to compensate the victims, if anyone.

At least one Democrat in Congress and various NGOs have called for the World Bank board to reject the IFC plan not to pay compensation to victims.

Devex spoke to former IFC and World Bank officials who are more skeptical of paying compensation. They argue that while Bridge may owe compensation to victims, as an investor IFC per se does not, and that compensating victims will create a "moral hazard" problem by incentivizing more (alleged) victims to come forward. The latter argument is not only callous, it would essentially place the IFC above the law, beyond any accountability ever. On the contrary, the US Supreme Court recently held inJam vs. the International Finance Corporation that the IFC can be sued in US courts for harm caused by its projects overseas. So, if plaintiffs bring a case, US courts may ultimately get to decide this one. In the meantime, compensating victims still might be the right thing to do ethically.

Credibility and accountability

The other remaining task is to restore the IFC's and its ombudsman's credibility. That will require not just an apology, but a transparent accounting of IFC's apparent efforts to obstruct the investigation of sexual abuse in Bridge schools.

If a credible, independent investigation finds that World Bank and IFC management did indeed attempt to cover up abuse for the financial benefit of their client, the board should demand accountability. This case has stretched on for several years, but some key players remain in senior bank positions.

At present, Ajay Banga has apologized and talked about how the World Bank must do better in handling reports of abuse. Meanwhile, it seems that those who tried to do so remain fired or suspended.

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