On the surface the WB sounds like an institution of admirable generosity. Since 1946 it has lent more than a third of a trillion dollars to countries that are considered by private investors to be poor credit risks. It is the single biggest lender to the third world. But as Caufield points out, by certain measures, the Bank has a high failure rate and has increasingly incurred the wrath of those it is supposedly trying to help. For example, the Sardar Sarovar water development project was the biggest project of its kind in India, if not the world. In many ways it was typical of Bank- funded projects. The dam was part of a larger plan which would have irrigated farmland, provided drinking water, and generated electricity. Noble goals, no doubt, but the project was rife with insensitivity to the environment and to local populations. The Sardar Sarovar dam would have displaced at least 320,000 people and originally there was no resettlement plan whatsoever.

According to Caufield 11 to 20 million Indians have been displaced by dams since 1947, another 4 million by mines, industrial development and wildlife sanctuaries. Three quarters of these people were not "rehabilitated," i.e. returned to their previous standard of living. While India has gained the status as "the most dammed nation on earth" most of the dams have been failures.

The Sardar Sarover project is just one of numerous examples that Caufield cites which support the following conclusions: Many bank sponsored projects do not accomplish the goals that were established for them. Many millions of people have been negatively affected by these projects. The WB has not undertaken sufficient measures to assess the environmental impact of the projects it sponsors. Overwhelmingly the development projects which are successful (by the banks standards) exacerbate inequality in the recipient nations. And the one group of people which consistently benefits from WB loans are first world investors whose investments are guaranteed by  governments.

Masters of Illusion contains much useful information about the formation of the World Bank, its structure, its policies, structural adjustment, and the salaries, benefits and privileged working conditions of its directors, staff, and consultants. Caufield concludes that WB sponsored "development" is largely "a matter of poor people in rich countries giving money to rich people in poor countries." This may apply to the loans but when it comes payback time there is a new twist: it is the poor people in poor countries who pay to rich in the rich countries.

This is a useful book that is very well researched and can be of immense value to critics of the World Bank and to those seeking a better understanding of the dynamics of global finance and exploitation. A minor criticism is that it doesn't present an economic analysis of capitalism that that could more fully answer the question: "If the World Bank has such a poor record of success why does it keep lending money?" The answer to this lies in an understanding of what some have called the "crisis of surplus absorption." Put simply, some people are just too rich and they need to continuously come up with new ways to invest their wealth so that it can produce more profits.  The U.S. for example is awash in capital. Many of the Fortune 500 are making record profits, year after year. Business Week reports that executive compensation is skyrocketing to new heights, and the Dow Jones average keeps rising. In search of profits investors may take some risks but if governments are willing to guarantee their investments, so much the better for the investor but the rest of the world had better beware.

Seen in this light, third world development projects don't exist to help the poor they exist to help the rich, and that is why they are planned so poorly and why so many people in the third world are adversely affected.