The Social Principles, proposed last autumn by UK Chancellor Gordon Brown as the “fourth pillar” of the international architecture, are likely to prove ineffective. The World Bank was asked to draw up the principles and ways to achieving them but it is focusing on other initiatives like its new Comprehensive Framework.
NGOs had hoped that the Bank and Fund would be required to apply the principles to all aspects of their macroeconomic programmes including trade liberalisation, capital account liberalisation, privatisation and civil service reform. However, it is likely that they will only be applied to decisions on fiscal policy.
Gordon Brown proposed that a monitoring unit should be established at the IMF to monitor these principles and the other codes, but no action has been taken. The Bank’s Board has insisted that the principles should not encourage more conditionality. Therefore the principles will simply be a tool for social policy discussions between the Bank, the Fund and borrowers.
There is now a two-track process for designing the principles: discussions on their content will be lead by the UN towards the Copenhagen+5 social summit, while the Bank will prepare a report on implementation for the Autumn Meetings.
The Bank’s report on the Social Principles, and a new 3 page briefing paper are available from Bretton Woods Project.