Accountability

All the Roles of Civil Society (Supranational Democracy Applied)

Posted on by Susanna Cafaro

It is a little-acknowledged truth that civil society plays today a significant role in several important international organizations.

While the legitimacy of international organizations (IOs) is still based on the conferral of competences and participation by member states, their accountability is somehow  enhanced by an increasing dialogue with civil society and every year new inclusive processes are launched to involve in consultations NGOs and other non-statual actors.

Of course, not all the IOs are evolving in this direction and among the evolving ones the pace may differ, but when this happens in big organizations as the UN, the UNDP, the World Bank – and on big issues such as climate change or post 2015 development agenda – the phenomenon deserves a serious analysis.

What exactly is happening in these important  organizations? What role does civil society play? Is it up to the task?

Let’s take a closer look.

The roles that civil society can play are various. The first and typical one is a role of watchdog: they observe, evaluate and – if necessary – raise public concern about any misconduct or abuse of power. In this role, many NGOs have significantly contributed to transparency, giving voice to a need of information which is the first step in order to watch and evaluate. Several IOs have accepted the challenge of opening up, a progress which has to be credited to the efforts of civil society. In this role NGOs enhance accountability.

A more sophisticate – formal or informal- role is the one of advisors. The choices of international organizations may be legitimate ones, may even be inspired by the best intentions. Still, often, other solutions are possible, with better outcomes or a more desirable social impact. The mere fact that a solution doesn’t come from a top- down approach but  stems from a dialectical process makes it more politically acceptable. Of course, proposals and suggestions from NGOs don’t find an easy way through the complex machinery of the IOs decisional process. Often, they are nothing more than messages in a bottle, but still…

The more civil society is able to participate in decisions, the more it strengthens the democratic legitimacy of an organization, adding elements of supranationality to their decision making process.

A third role of civil society is giving voice to “those who are not in the room”: minorities, people living in extreme poverty or impaired by a lack of literacy. In this role, civil society may tell unconfortable truths and raise awareness, it is maybe the most precious role of all, serving social inclusion.

Now, the second question  naturally arises: are non-governamental organizations up to the task?

Are, themselves, legitimate, accountable, inclusive?

It is impossible to give universal or definitive answers: every NGO is an organization of its own kind. Possible answers come from the transparency of their inner decisional process, their budget (especially their financing), their tools and ways of acting. Decisional and budget autonomy is the dividing line between real and fake NGOs (the so-called GONGOs, serving the interests of some undemocratic government).

Moreover, civil society cannot, in any way, be considered as a spokesman or as an interpreter of a global population or, more precisely a global “demos”, whose very existence is extremely controversial in doctrine. NGOs represent just their members, citizens engaged and active on the global stage. We can only wish that their number will increase over time.

Let’s give some examples of this increasing role of civil society:

The non-governmental organizations (NGOs) interacting with the UN Economic and Social Committee grew exponentially in the last decade both in number and participation: in 1946 member NGOs were 41; in 1992 more than 700, in 2011 more than 3400. Specific websites have been set to interact with civil society and collect their opinions on several topics.

Specific polls and meetings are dedicate to interact on important issues, such as the post-2015 sustainable development goals.

During the  IMF/World bank annual and spring meetings, a civil society policy forum gives to NGOs the opportunity to interact among them and a specific meeting – the Town hall meeting – allows them to engage directly with the president of the Bank and the managing director of the IMF. Other, more restricted, consultations and meetings happen during the year and they have contributed significantly to increase transparency in the two organizations (especially in the Bank). Moreover, development projects on the grounds may involve local civil society.

The UNDP Civil Society Advisory Committee was created in 2000 as a formal mechanism for dialogue between civil society representatives and UNDP’s senior management on key issues of policy and strategy. UNDP regularly invites civil society representatives to engage on current development issues as they are key actors in development and participatory governance.

Although these processes should not be overestimated, they cannot be dismissed as “democratic embellishments”, because they are in fact enabling the emergence of supranational polities.

Looking at the same phenomenon from the NGOs’ side, we can only welcome the increasing awareness of citizens engaged in global processes.

A good example is provided by the Citizens’ Climate Lobby, a non-partisan, non-profit organization that trains and supports local teams of citizen volunteers to become policy advisors to their own elected legislators. The organizations is active in many countries and in all the 5 continents, it is actually building an open network aimed at monitoring and enhancing the work of governments to achieve decarbonization, so to have a say in the next United Nations Frame Convention on Climate Change in Paris in December 2015.

The campaign name is “Pathway to Paris“. It is an interesting lab of participatory democracy and I suggest you keep an eye on it.

“With great power comes great responsibility”: the Case of ECB’s Accountability

Posted on by Susanna Cafaro

“With great power comes great responsibility”.You know where this quote comes from 🙂

I think it perfectly applies to the ECB.

When I started to study it (OMG, about 20 years ago!), I found out that its almost exclusive competence in managing the Eurozone monetary policy and its well-guaranteed independence were mirrored by a panoply of accountability tools.

The democratic legitimacy of the ECB is grounded on the respect of the rule of law and specifically on the fact that (i) it has been established by a treaty ratified by all member states; (ii) its Executive Board is appointed by the European Council, acting by a qualified majority on a recommendation from the Council after it has consulted the European Parliament; (iii) its decisional bodies act in accordance with decision-making procedures codified in the Treaties and in the Statute annexed thereto.

This legitimacy ground is complemented by the accountability of the ECB towards the European Parliament. The ECB President regularly reports on the bank’s monetary policy and other duties during his quarterly hearings before the European Parliament’s Committee on Economic and Monetary Affairs. The content of the “monetary dialogue” has evolved over time and now covers all aspects of economic and monetary policy. In addition, the President of the ECB and the other members of the Executive Board may be heard by the competent Committees of the European Parliament on  own initiative or at the request of these; MEPs may address written questions to the bank and ECB’s compulsory replies are published in the Official Journal of the EU and on the bank’s website.

The aim of these exchanges between the Parliament and the ECB is monitoring its compliance with the objective of price stability: in all documents and interviews the ECB is required to justify its work and does it by making known its monetary policy strategy in detail. The definition of price stability rests on ECB’s competence and can be found in two important decisions, adopted in 1998 and 2000.

As part of the ECB’s reporting obligations, the ECB publishes quarterly reports, weekly financial statements, and a Monthly Bulletin plus a wide range of other task-related publications. It also addresses an Annual Report to the Council and Parliament. This document is presented by the President of the ECB to the Parliament’s plenary which –few months after – adopts a resolution after a general debate. This exercise is far from being a mere formality: in 2005 the Bank’s annual report was rejected (even if this vote didn’t have any binding effect). The Members of the Governing Council deliver numerous speeches to address relevant topics of concern for the public and the ECB President and Vice-President provide an in-depth explanation of the ECB’s assessment of the economic situation and the rationale for its monetary policy decisions during regular press conferences – monthly- after each meeting of the ECB’s Governing Council.

All this was already in place before the financial crisis.

Only on December 18th 2014, the European Central Bank communicated its intention to start publishing summary minutes of its policy deliberations beginning four weeks after its next meeting, as a key part of its communications strategies. For sure it is a step forward in terms of the institution’s transparency and accountability.

A few days ago somebody made me notice that if “with great power comes great responsibility”, the contrary is also true: with great responsibility comes great power.

Once again, the ECB is a perfect example. During the financial crisis and especially after the Greek crisis exploded, the ECB took on more and more responsibility, stretching its mandate to guarantee the price stability and – ultimately – committing itself to save the very existence of the euro.

Draghi’s London speech (July 26, 2012), was a turning point:

“Within our mandate, the ECB is ready to do whatever it takes to preserve the euro. And believe me, it will be enough.”

Starting from then, new unconventional monetary instruments were created – the Outright Monetary Transactions, the Quantitative Easing – and the communication strategy became one of them. Now, in front of this (undeniable) increased power, one legitimately asks if the accountability tools foreseen by the Treaties are still adequate. Maybe it is time to introduce a new one: a monetary dialogue with a Parliament (or a Parliament configuration) specific to the Euro area.

The proposal of signing a specific Euro Treaty for the Eurozone economic governance -establishing an executive body responsible in front of an Euro-Parliament – has been advanced by three political manifestos appeared in 2013 and 2014. The first was presented by the German Glienicker Gruppe, the other two were French: the proposal by the Groupe Eiffel and the Manifeste pour une Union Politique de l’Euro. Such a Parliament would add a new dimension in holding the ECB accountable and could contribute significantly to the democratization of the Euro-governance. In the meantime, it would be possible to establish in the European Parliament a  subcommittee to the ECON Committee composed of MEPs from the Eurozone, to prepare the ECON Committee’s work on legislative proposals and overseeing activities specific to the Eurozone, including the monetary dialogue with the ECB.

This last proposal could be easily implemented without any treaty change, not amending the European Parliament’s Rules of Procedure (where couldn’t be allowed any differential status among MEPs), but with informal agreements among political groups.

Democratic Experimentation

Posted on by Susanna Cafaro

A possible paradigm for democracy in international organisation is what I call democratic experimentation.

The aim of it is reinforcing the typical elements of the democratic model – legitimacy, accountability, inclusiveness – inside IOs in the most effective ways, consistently with the specific institutional frame and goals of each organization.

In order to do so, the embryonic forms of legitimacy, accountability and inclusion – already existing in a number of IOs – may be progressively strengthened and may evolve into more effective tools and channels. They may be declined in original ways to be improved gradually.

Why “democratic experimentalism”? Because the need to invent new formulas to adjust to the different fields of action and to the different global public goods involved requires that we proceed empirically by trial and error.

A model in this approach is the European Union, defined as “a new legal order” by the European Court of Justice in the famous Van Gend en Loos decision (1963, Case 26/62). It is a model only in terms of process, i.e. in the ability to proceed by trial and error towards more mature forms of democracy, but not in terms of outcome, which is the product of specific historical, cultural and geographical circumstances.

In other words, each international organization could experience a “legal order formula” of its own for  legitimacy, accountability and inclusion, which would be the result of its own specific features and aims. In order to allow such evolution, it is necessary that statutes and founding treaties  establishing the IOs foresee a clear and accessible revision procedure and that they are not considered as carved in stone.

Cultural and structural differences among the organisations prevent from finding universal solutions. What is necessary is rather to find a method and agree on the values and objective to be pursued. As was the case with the process of European integration, other international organizations could evolve into sui generis  legal orders, never seen before.

The twofold advantage of this approach would be: (i) allowing us to read in a teleological frame a series of small evolutions taking place in the law of international organizations (the multiplication  of complaints mechanisms, monitoring bodies, dialogues with civil society); (ii) giving us a key to interpret and measure their progress.

There isn’t yet a ranking of international organisations according to their democratic standards (as there is for States). Nonetheless, it would be possible to build a set of criteria and data to make it possible.

I’m sure that this would be a valuable exercise… and I’d love to contribute.

 

A Case-Study: The Greek Crisis.

Posted on by Susanna Cafaro

Much has been written about the Greek crisis.

Below, some thoughts on this story seen through the glasses of democratic standards and  -specifically-  through the two lenses of the legitimacy and accountability (3D democracy vision)

The financial crisis, in Greece more than elsewhere, has highlighted the erosion of state sovereignty in key areas of typical citizen-state relationships such as the welfare system and the labor market, in which the need for choices perceived as legitimate – but also accountable – is crucial. Some fundamental rights have been touched, some less fundamental ones have been significantly reduced.

Decisions had been taken by top political bodies (Eurogroup, European Council)  and technocratic institutions (European Commissions, ECB, IMF). Let’s put aside for a moment the good intentions as  restoring sound public finances: the simple truth is that parliaments have been ignored. The Greek Parliament – of course- but also the European Parliament.

The issue regards also the method and not just the matter. The solution to the issue itself -austerity or not austerity- is strongly influenced by the method used as some institutions are more easily driven to deliver rigor than growth. Moreover, they lack the necessary legitimacy and accountability to deal with individuals’ rights.

Conditions were attached to the Greek loan facility – a package of bilateral loans by Euro area member States complemented by an IMF loan. Two intergovernmental agreements were signed and entrusted the Commission to manage the package under strict conditionality. A loan facility agreement was then signed by the Commission on behalf of the Euro area member States and by Greece. Next, the economic conditions were agreed on in a series of Memoranda.

Their respect of the rule of law as well as their compliance to the EU Treaty and the EU Charter of Fundamental Rights couldn’t be assessed by the European Court of justice because of the widespread use of atypical legal acts as well as of their intergovernmental nature.

Why? Why the Eurogroup and the German Government had such a strong voice and the Court of Justice had not? Why the Parliaments were not in the debate? Why, even now, with a clear Greek vote legitimizing a different majority in the Parliament and a different vision we still see the old movie going on again and again?

Just follow the money…

Money is not from the EU, money comes from some European governments and from the International Monetary Fund . With some help from the ECB.

The EU budget is too tiny to cope with the crises: less than 1% of EU GDP. Moreover, the 28 EU countries were not all willing to contribute, so the Eurozone States had to manage the crisis on their own. They did it through intergovernmental agreements (as creating the ESM) and according bilateral loans. The IMF – traditionally leaded by an European-  was very sensitive to the problem (even too much, according to the BRICS).

And here comes the Troika…..

The Troika is nothing more than a committee of creditors, entrusted with the management of the loans. Of course it hasn’t any accountability. Its doubtful legitimacy and lack in transparency have been clearly pointed out by the European Parliament.

If we want to assess its accountability, we have to split it into its three components:

The European Commission is an accountable institution, it has to report to the EP, answer to MEPs’ written questions and could even be dismissed by the Parliament with a majority vote. The ECB too is subject to a monetary dialogue with the EP, even if less incisive than the dialogue the Commission has with the EP. Unfortunately, having them acting together confuses responsibilities and makes harder to assess the role of each institution for the decisions taken.

And then we have the IMF.

There is a story I want to tell you about the IMF in the Greek crisis:

In a IMF Country Report about Greece (June 2013) we can read that due to the process of fiscal consolidation  the country paid a too high a price in terms of social and economic losses: “Market confidence was not restored, the banking system lost 30 percent of its deposits, and the economy encountered a much deeper- than-expected recession with exceptionally high unemployment. Public debt remained too high and eventually had to be restructured, with collateral damage for bank balance sheets that were also weakened by the recession”.  The reports makes clear there were successes as well as “[N]otable failures” in the program.

This is somehow a progress in the culture of the institution: analyzing critically the consequences of their choices. For sure the establishment of an Independent Evaluation Office in 2001 contributed to such improvement. Nonetheless, who is politically responsible if a choice is reported wrong? are there any consequences? The answers are: 1) Nobody, 2) No.
A gap in accountability is more than evident.

There is much to say about the tangle of many potential conflicts of interests inside the Executive Board of the Fund and in the IMF itself that we cannot unravel all of them here (but we’ve done it elsewhere!).

What makes the Greek crisis an interesting case study -unfortunately for the Greek people- is that it makes clear that democracy matters. Beyond matters of principle.

What is also really sad (at least for me) is that Europe is losing its credibility over the Greek crisis.

The Basics of Democracy: 2. Accountability (or The Other Side of the Coin)

Posted on by Susanna Cafaro

According to the Oxford English Dictionary, democracy is

“A system of government by the whole population or all the eligible members of a state, typically through elected representatives”

while the Collins Dictionary gives as first definition

“government by the people or their elected representatives”.

According to dictionaries, legitimacy is the one and only ingredient for a democracy recipe

but…

countless elected governments over the history changed their nature and became autocracies.

Hitler and Mussolini won regular elections and so many actual dictators even nowadays. Who watched the events in Egypt a few years ago, or more recently in Turkey, understands the problem.

That’s why a modern democracy cannot just be legitimate because even a fully legitimate government could take arbitrary decisions, betraying the popular mandate.

The necessary completion of legitimacy is accountability.

Political bodies are held accountable for their choices when they assume full responsibility. Of course, this means also accepting the consequences for the wrong choices, furthermore for the illegal ones.

There is a wide range of accountability tools:

a parliament able to dismiss the government that it doesn’t trust anymore; an impeachment procedure for serious misconduct of ministers or heads of state; a court able to stop or repeal laws contrary to the fundamental social contract (the Constitution, the bills of rights); some constitutional body  able to dissolve the parliament; the right of the electorate to chose new parliament members when disappointed by the previous ones… and the list could go on and on…

Citizens have the right to know how the public money is used, to which extent the objectives have been achieved and what expectations have been met; they have the right to appeal to a judiciary authority if their rights are violated and if those responsible for public interests are taking illicit advantages from their positions.

We are sometimes so accostumed to this other side of democracy that sometimes we end up forgetting how it is essential…. arriving to commit the mistake of thinking that “exporting democracy” (if ever democracy is exportable) just means organizing free elections. A nice democratic exercise but – without accountability – almost useless.

Now, you’ll ask, does accountability exist at supranational level?

Well, there is something, here and there. Often accountability is just hanging on the thin thread of responsibility of national representatives in front of their governments or their parliaments (if democratic!). But here is the good news: it’s slowly growing.

The XX century didn’t see much of that, but now a number of international organisations are establishing mechanisms for individual or collective claims (like the World Bank Inspection Panel); ombudsmen (as UN Ombudsman’ Office created in 2002), independent audit offices.

And we have to give merit to civil society which has struggled for that.

Of course, there is still much to improve. In a real supranational democracy, both political and legal accountability have to be equally developed.

Once more, the European Union arrived first -with its Court of Justice and its institutional system of checks and balances-, even if there is still more than something to improve in the field of economic governance.

In South America, several supranational courts followed the same path. Regional organizations have an advantage over the global ones: a common background of shared values helps.

But what’s more interesting about accountability is that is not so relevant if member states are democratic or not as accountability channels – when established – are open to all the citizens and NGOs, no matter where they are, while legitimacy channels often cut off a good number of them.

This seems to me a good reason to work on the other side of democracy.

PS

If you want to learn more about accountability of international organizations, you can download here the Berlin Report by the International Law Association