Source:
New Rules for Global Finance Coalition
Today, international financial institutions (IFIs) wield tremendous power over the economies of developing countries in matters ranging from trade policy to the level and composition of public expenditures to the role of the private sector. February 2005.
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The World Bank established a dialogue with civil society groups much earlier than other international organizations. As a result of a constant stream of protests against the harmful effects of World Bank programmes, in the 1970s the Bank started to rethink specific projects and devise a policy change at a more general level. NGO pressure forced then-president Robert MacNamara in 1977 to announce the incorporation of the local population in World Bank projects. However, it took until 1981 to formalize this co-operation in the World Bank-NGO Committee, which was set up to review existing approaches to co-operation and develop new ones, as well as improve the exchange of information. Although participating NGOs were criticized by more radical ones as being unrepresentative of the whole NGO community, the Committee improved the partnership between the Bank and NGOs. In response to criticism, the NGO members of the Committee formed an autonomous NGO Working Group on the World Bank in 1984. This met separately to discuss NGO views before the meetings with World Bank staff.
The increasing dialogue with civil society groups in the 1980s was not reflected in improvements in the World Bank's performance. The Wapenhans Report noted that, according to the Bank’s own criteria, 37.5 per cent of its projects completed in 1991 were failures, up from 15 per cent in 1981 and 30.5 per cent in 1989. The worst-affected sectors were water supply and sanitation. Geographically, the African region had the most problems, with some countries having success rates of less than 20 per cent. These findings confirmed NGO views, which claim that the policies of the Bank are responsible for widespread poverty, inequality, and suffering, as well as environmental destruction. The World Bank is seen as anti-democratic, controlled by the G7 Governments, pursuing policies that mostly benefit international private sector investors, transnational corporations, and corrupt officials and politicians.
Due to NGO pressure, the World Bank now involves NGOs in all stages of the project cycle. It has acknowledged the importance of environmental and social concerns in adjustment programmes. The implementation of World Bank projects by NGOs in co-operation with national governments and local authorities causes problems. Many developing countries grant only limited space to civil society. Projects are badly planned, inadequately funded and hampered by an inefficient bureaucracy. On the other hand, the question remains whether Bank leverage can force governments to incorporate NGOs into project implementation. Increasingly, NGOs participate in Bank projects not only on the implementation but also on the policy-making level.
NGOs, however, remain critical about civil society participation in World Bank projects. If participating at all, they often feel that they are being used as a PR tool to improve the Bank’s image, rather than truly being involved in the projects. The World Commission on Dams, for instance, started as a cooperation project between Bank and civil society. When it launched a report, which was highly critical of World Bank involvement in the displacement of millions of people and environmental destruction caused by large dams, the Bank ignored the findings and refused to turn the recommendations into binding policy guidelines. The collaboration in SAPRI was meant to be a joint effort by the World Bank and NGOs to evaluate the results of structural adjustment in selected developing countries. Findings, again, turned out to be devastating for the Bank and it pulled out of the co-operation before a final report was launched. These incidents confirmed the views of NGOs that the World Bank only reacts to the constant pressure from civil society and is not the ‘learning institution’ it proclaims to be.
Among the main proposals for World Bank reform are the cancellation of debts owed by the poorest countries to the World Bank, an end to structural adjustment, and the more effective inclusion of environmental and social concerns across all Bank programmes. Furthermore, the Bank needs to become more transparent and accountable in its decision-making and implementation processes and, above all, establish a more equal voting structure in favour of the under-represented countries of the South.
In 2003, the Bank introduced a Joint Facilitation Committee (JFC), which is supposed to replace the World Bank–NGO Committee. However, it remains to be seen if this new co-operation will be an effective instrument in the exchange between civil society and World Bank. Doubts have already been raised as among the 15 NGOs in the JFC only two are from the South, where most of Bank projects are concentrated. Additionally, most of the participant NGOs do not focus on World Bank or IFI issues. Therefore, the question has been raised whether such a diverse coalition - including, for example, the YWCA and Transparency International - will be able to present a united front in dealings with senior World Bank staff.
The World Bank's main self-proclaimed objective is to eradicate poverty. Yet, evidence suggests that its programmes often harm the poor and the environment.
Campaigns
NGO-organised
actions
Reform of International Institutions
The campaign's objective is to spark off a process leading to the reform of the system of international institutions with the participation of all world actors and moving towards a system of global democratic governance.
The dialogue between the World Bank and civil society
The Statement expresses an overarching concern about the absence of transparency and accountability in the process of selecting the next President of the World Bank. The democratic deficit at both the World Bank and the IMF is glaringly evident in this process and must be addressed – if the legitimacy of these institutions is to be restored, says the statement prepared by the IFI Democracy Coalition of US and international civil society organizations and endorsed by many other organizations around the world. February 2005.
The Bank’s gateway to civil society, which provides NGOs with news and materials on the World Bank's evolving relationship with civil society. It contains information on ongoing policy consultations, funding sources, operational partnerships, and publications.
The Bank’s operational guidelines on staff relations with civil society groups. It acknowledges that NGOs are important actors in policy-making. In collaborating with them the Bank seeks to enhance the effectiveness and foster public understanding of its work.
In this paper the NGO Working Group submits a detailed proposal to the Bank, setting out recommendations on its future role, and on how the Bank's relationship and dialogue with NGOs and other civil society actors may be organized (doc format).
This article criticizes the JFC as an overhaul of the failed NGO Working Group on the World Bank. The initiative does not represent and might undermine the campaigns of other civil society groups. Any institutionalized forum of large NGOs and the Bank is in danger of resulting in photo opportunities and lowest common denominator generalities rather than empowerment of grassroots groups.
The Bank’s co-operation with civil society is disappointing. When co-operation results in unpopular policy recommendations, the World Bank largely ignores the results, as happened with the Water Commission on Dams and SAPRI reports. Other initiatives such as the PRSPs continue to represent the Bank’s macroeconomic strategies rather than supporting a dialogue with civil society (pdf format).
This paper assesses the World Bank’s recent relations with civil society groups. It is supposed to facilitate a discussion between the Bank’s senior management, member governments and NGOs on future co-operation. While the overall trend has broadened the engagement between the World Bank and civil society, co-operation remains limited and does not reflect the growing importance of NGOs in global policy-making.
Officially, the World Bank co-operates with civil society to improve its track record. Unofficially, it has to respond to powerful NGOs to boost the legitimacy of its operations. While the Bank now says it aims to deepen its dialogue with civil society, it remains doubtful whether new initiatives like the JFC really present a new era of co-operation with NGOs.
This report gives a detailed account of the co-operation between the US InterAction network and the World Bank. Though Bank-civil society cooperation has improved recently, it is still hindered by institutional constrains within the Bank’s system and culture. Recommendations include streamlining the procedures of the World Bank and increasing NGO collaboration on national level (pdf format).
The World Bank-civil society Joint Facilitation Committee (JFC) is a consultative working group committed to exploring transparent and effective mechanisms for dialogue and engagement between civil society and the World Bank. The JFC, an outgrowth of the former World Bank NGO Working Group, is composed of 15 regional and international civil society networks and staff and senior managers from the World Bank. During its 18-month tenure, the JFC seeks to produce a guiding framework for World Bank-civil society engagement; and to establish transparent, accountable and democratic mechanisms for further engagement.
Many of the Bank's current "safeguard policies" have been developed in large part as a result of public pressure. In fact, it can be argued that without NGO campaigns aimed at specific cases of environmental and social harm caused by Bank-financed projects, policy reforms would not have taken place. An attached table is a summary of many of the project-specific campaigns and advocacy efforts that have been prompted primarily by local protest against Bank projects and that have evolved into global advocacy campaigns.
This report presents proposals from US civil society groups for reforming the World Bank. It focuses on reforming Bank policies across a whole range of issues and increasing the accountability and effectiveness of the World Bank. Bank resources have to be invested in human development instead of being used to support policies that harm the environment and the poor (pdf format).
The Bank's own review of the Strategic Compact reform programme, initiated in 1997, concludes that the quality of the Bank's work has improved by increasing attention to social dimensions of development, anti-corruption work, debt relief and HIV/AIDS. However, the Bank needs to become a more aligned, efficient and performance-based institution (pdf format).
This study assesses the effectiveness of the Bank’s gender strategy and recommends how to strengthen it. It presents data on the history and status of gender in the Bank and concludes that the Bank's gender experts are high quality, but they are too few and cannot be effective without mandatory incentives and accountability measures for non-gender staff to promote gender equality and women’s rights. The study also examines the Bank’s gender strategy elements and track record (pdf format).
So far, IFIs lack the capacity to respond to the challenge of reaching the MDGs. Instead of the Washington Consensus, which is still being implemented, IFIs need to develop operational practices that are consistent with their stated commitments in areas such as poverty reduction, gender equality, core labor standards, quality public services, and an international financial system that is supportive of stable and sustainable development in all regions.
This paper offers some recommendations for reform of IFIs' governance in terms of voting structure and composition of the board, transparency and decentralization of decision-making processes, selection of the President of the World Bank and Managing Director of the Fund, and selection of staff as well as the relationship between the IFIs and the UN (pdf format).
Christian Aid suggests fundamental changes in the governance structure of the IFIs. Recommendations include a more equal voting structure, ideally based on the one-country-one-vote principle. Formal and majority voting should replace consensus-based decision-making and the leaders should be elected in a fair and transparent process (pdf format).
This statement urges the World Bank and IMF to review their transparency policies in the oil, gas, and mining sectors. Often national governments do not publish figures of their revenues from these sectors, depriving citizens of the information they need to hold governments accountable. The World Bank and IMF should require revenue transparency as it is necessary to fight poverty in these resource-rich but poor countries (pdf format).
As discussion of the Bank’s future role continues, the institution seriously needs to reduce its work to a few core tasks. First of all, it should live up to its own good governance and transparency rhetoric.
This statement from various NGOs identifies key problems with IFI governance and their demands for minimum steps to improve it. These include rebalancing board composition and voting power, making the governing bodies more transparent, opening the leadership selection and reversing the “mission creep”.
The Monterrey Consensus proposed in 2002 an increasing participation of developing countries in IFI’s decision-making. The resulting debate only led to some minor reform proposals at the Bank, real change did not occur. In particular the voting system needs to be reformed according to the transformations that have taken place in the international financial structure since 1944.
