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No intent at insult, Magik. These are crazily complex issues that I've studied a lot, so my point was that sometimes the academia background I come at these issues from, plus the fact I've worked on WTO issues in-depth a lot, make me out-of-touch with the point of view taken by most folks.
The problem with the lender setting the terms is an "evil" of sorts here. We're not talking about a bank saying "these are the terms or you get no loan." We're talking about an International organization that is supposed to be run by all countries according to a TREATY. So, the WB and IMF should not be able to dictate these things carte blanche, as they've got a set of rules to work by that most banks don't.
This leads me to discussing your notion that you want a reasonable return on your investment. Well, firstly these funds were created moreso to bail out countries in trouble than to make a buck, making their obsession with getting the money back a bit disingenuine from the original intended purpose. Moreover, one can run an economy effectively (thus guaranteeing the loan) without running it like the U.S. does. China is a fine example, because they are on the opposite end of the spectrum (socialist). However, even among first world nations there are some rather striking differences. Lester Thurow, a Harvard economist, wrote a book about this in the early 1990s where he broke the first world down into 3 basic economic zones based on how they run their economic policies. The zones were North America, EU, and Pacific Rim. In Pacific Rim countries, he found more "communistic" market practices (a term which would have been a paradox a generation ago), meaning he found more instances of the fiscal policy of the government being intertwined with businesses. The Japanese government for instance will make direct loans to companies - a true rarity in the US, where we generally don't like to see the government give money to industries (though the tax code is certainly a way to do this through the back door). Thus, guaranteeing return on a loan does not mean they should necessarily change their policies to be like us.
As for this being an international agency and the U.S. being unable to dictate the terms of the loans, I agree with you in principle but that is not the reality. The U.S. primarily has the reins of these agencies (and it does, I'll note again, put in the most $$$).
Your economics professor was right. My point was why should we require another country to undertake a practice we have evolved past?
The one thing you will see over and over again that everyone agrees on is that the best summation of the angst over these agencies is their Parental attitude.
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