UN report urges greater IMF and WB accountability (Bretton Woods Project)

Demands for more democracy and accountability of international financial institutions have been echoed by UNDP in its recent Human Development Report (HDR). NGOs say it is just a start.

Many NGOs and academics have called for more democracy in publicly-funded institutions such as the IMF and the World Bank. The United Nations Development Programme, in its HDR 2002, "Deepening democracy in a fragmented world" is concerned that "the IMF and the World Bank will not be able to do their job effectively if they remain tied to structures that reflect the balance of power of the Second World War". The report highlights the gap between the institutions' ever-expanding scope and decision-making structures which represent a narrow range of powerful interests.

Proposals include reforming voting systems to enhance the voice of developing countries, a more democratic process to select the heads of the institutions, and publication of board deliberations. The gender balance should be dramatically improved in decision-making bodies - a dimension often overlooked by critics. The report also highlights the need for independent evaluation of the institutions' operations that leads to effective, measurable changes. While identifying several limits to "judicial-style accountability" embodied in the World Bank Inspection Panel for example, the HDR insists new institutions of scrutiny and monitoring offer people "some measure of redress in the institutions that affect their lives-yet in which they have little or no voice".

Interestingly, a book published by the IMF comes to similar conclusions on the need for public availability of Board minutes, more political oversight and accountability, more openness to civil society and a more equitable voting system. However the book clumsily tries to justify the US veto on important decisions.

Canadian coalition Halifax Initiative applauded the UNDP call for an injection of democracy at the IMF and the World Bank. The French NGO Network on IFIs also welcomed UNDP's recommendations but insisted changes should go beyond structures and address the failure of neoliberal assumptions underlying the institutions' operations. A recent book from the World Institute for Development Economics Research Governing globalisation also takes this line. It combines propositions for reform of the governance of the Bretton Woods Institutions, and a call for a re-orientation of their roles and ideological biases.

Further insights on judicial accountability were provided in a recent article by Bangladeshi journalist A.H.Monjurul Kabir. In Blanket immunity for the World Bank?, he reports how the World Bank's Bangladesh Country Office has attempted to sign an agreement with the Government of Bangladesh providing for full immunity from legal process as a result of a former staff member's lawsuit contesting termination of his contract. Mojurul Kabir claims that "the era of human rights challenges the very practice of granting blanket immunity to any institution or individual for certain grave acts or conducts". An acceptable option could be "the adoption of a result-oriented immunity standard protecting the functioning of international organizations including the World Bank. This would exclude reasonable claims from immunity but would shield the organization from unfounded claims that threaten their existence or interfere with their core functions".

Deepening Democracy in a Fragmented World, UNDP, July 2002

Blanket immunity for the World Bank?, Daily Star, July 2002

Governing globalization. Issues and institutions, WIDER, 2002

Governance of the IMF. Decision Making, Institutional Oversight, Transparency, and Accountability, IMF