Accountability

News

Post-crisis social code diluted to weak Bank principles

15 March 1999

There is danger that the aims and scope of the social principles (formerly the Social Code), which was proposed by Gordon Brown as a fourth pillar of the new international architecure, will be watered down to become simply a framework for the Bank’s social policy. It was originally proposed that the social principles would apply to all countries and their application would be monitored, as is required by the codes on Fiscal Transparency, Monetary Policy and Accounting Standards. However, it appears that the principles being designed by the World Bank will not apply to Northern countries and that no mechanism will be established to monitor and report on their application. Instead, it seems likely that the principles will merely be used by the Bank in consultation with borrowing countries as a ‘framework for dialogue’, ie, when designing country assistance strategies.

The need for a set of social principles arose from the recognition that orthodox economic reforms have not been sufficient to reduce vulnerability or create socially sustainable development, and that IMF programmes, in particular, can have a negative impact on long-run development objectives. Rather than debating social policy in an age of economic globalisation, the Bank appears satisfied with providing a check list of principles, drawing on those in UN and ILO conventions and the International Development Targets. Unless political momentum is increased, social improvement will remain peripheral to economic goals.

Some discussions have been held with the International Confederation of Free Trade Unions and a preliminary draft should be available to NGOs in March. Michael Walton and Gloria Davis are leading this process in the Bank.

The Bretton Woods Project has notes from the ICFTU meeting and other meetings on this issue.

The Social Principles will be discussed by the Development Committee at the Spring Meetings (27-29 April in Washington). The agenda includes:

  1. Development Effectiveness:
    • Comprehensive Development Framework;
    • The phase 1 review of the Heavily Indebted Poor Country Debt Initiative;
    • Assistance to Post Conflict Countries.
  2. Strengthening International Financial Institutions:
    • Principles of Good Social Policy;
    • Bank Group’s Capital Adequacy;
    • Strengthening the Development and Interim Committees.
  3. The Bank Group’s cooperation with the regional development banks.