On the 15th of November 2008, in the midst of the global financial crisis, the leaders of the G-20 countries met in Washington DC. In the meeting’s final declaration, they committed to reforming the international economy governance – in order to steer their countries out of the crisis, boost economic growth and restore trust – by (among other things) overhauling the Bretton Woods institutions, i.e. the World Bank and the International Monetary Fund.
The structure of the two institutions, created in 1944, had been discussed before, but never so firmly and by such a high-ranking forum.
In fact, the earliest reforms date back to the Seventies and were followed by regional financial crises that had global effects and sparked a debate among academics and politicians alike. New impetus came from the anti-globalization movements – particularly active during the Nineties – that put the Bretton Woods institutions on trial. The claims for more “voice and representation” by the developing countries,especially the emerging ones, whose economic success was fostered precisely by the contested globalization, came later on. These demands were echoed by major international conferences and groups such as the G24.
All this brought about a series of small actions through which the two organizations have begun to rethink their roles and structures.
Two subjects were on the agenda: how to make the Bretton Woods institutions (i) more effective, so that they can successfully face the challenges of development gaps (World Bank) and crisis prevention and management (IMF) and (ii) more democratic and less opaque, so that all their members and stakeholders can have a voice in and be represented, be they large or small, wealthy or not.
As a consequence of the 2008 global financial crisis, each of the Bretton Woods institutions convened groups of wisemen and committees of experts, and so did governments and other international institutions. The results of their work can be found in the Manuel Report; the Report of the Commission of Experts of the President of the United Nations General Assembly on Reforms of the International Monetary and Financial System; the Zedillo Report. It’s also worthwhile to mention technical documents such as the FMI governance evaluation document by its Independent Evaluation Office and a series of reports from the civil society like the 4th Pillar Report
All these debates had, as a consequence, IMF quota and governance reforms adopted on December 2010 and not yet in force because of the resistance by the main shareholder of the two organizations: the United States.
I have published – a couple of years ago- an e-book to examine the governance systems of IMF and World Bank and above all what I reckon is the core issue: their decision-making process. My analysis is based on the firm belief that the decision-making process affects the efficiency and also – indirectly – the outcome of the international organizations’ decisions. In other words, their governance systems are bound to influence and shape the results of the actions of the international organizations themselves.
Unfortunately – as the debates and the reforms stagnate – my book and my proposals are still up-to-date. Here they are, in a nutshell:
EIGHT SUGGESTIONS TO IMPROVE DEMOCRACY AND EFFICIENCY
IN THE BRETTON WOODS ORGANIZATIONS
- Separate IMF and World Bank (autonomous memberships and attributions of shares, different quota formulas);
- Introduce a double majority (of states and votes) in the decisional bodies (Boards of Governors, Executive Boards and Ministerial Committees);
- Entrust Ministerial Committees with a role of political guidance similar to the one currently played by the G20, eventually foresee their possibility to meet (also) at head-of-state level;
- Rethink constituencies to reflect – when possible – regional integration and cooperation gatherings, as a first step towards multilevel governance;
- Give Executive Directors the only status of international officials and guaranteed independence while national interests will be reflected and balanced in Ministerial Committees;
- Give the Board of Governors the power to appoint and collectively dismiss the Executive Boards;
- Envisage membership of international organizations;
- Give civil society an advisory role, by publishing on the Internet the first drafts of policy and strategy documents and collecting comments and reactions. The final version of all documents should reflect in the motivation how and why decisions were made.
On all of these points I could speak for a long, if you are interested you can read it all in my book.
PS Good news: José Antonio Ocampo just released a paper about a reformed architecture for the international monetary system. The debate is officially re-opened!
“Sovereignty, though its meanings have varied across history, has a core meaning: supreme authority within a territory. It is a modern notion of political authority” (Stanford Encyclopedia of Philosophy)
It was only after the Peace of Westphalia, in 1648, that -in Europe- sovereign states appeared as we know them.
As we know them?
I am not really persuaded that I really know (or have known) “sovereign states”.
When I was a child, in the bipolar world, maybe just the United States and the Soviet Union were sovereign states. Maybe China too, in a different way.
The theory of limited sovereignty was spelled in clear words in the Eastern bloc, a bit less clearly (but it wasn’t less true), in the western one.
Since WWII, another kind of limitation of sovereignty came from international law, especially by International humanitarian law and human rights law. States were not completely sovereign anymore since they had obligations towards their enemies and towards their own citizens. The notion of domestic jurisdiction was gradually eroded.
In this sense, compressing national sovereignty was not necessarily bad, even if it came with lights and shadows: how many states signed human rights declarations only as a tool of propaganda? How many of them were willing to guarantee human rights and repress gross violations in other countries -using military force- even if standards at home were not so high?
The United Nations cannot really enforce what is officially declared or check the good faith of the states showing good will.
Eventually, the world became more and more interconnected and economically integrated: the so-called globalization. And new constraints on sovereignty were accepted – as WTO regulations – as a price to pay for the access to new markets.
Now, it is clear to me that sovereignty is nothing more than a fictional concept. The state is not anymore a supreme authority, a superiorem non recognoscens (if there ever was one).
It is a loss of sovereignty if we look at it from the state perspective. But we could try to see it from a different perspective.
From the global perspective – or the global public goods perspective – the loss of many fragmented sovereignties could be positive as far as they are replaced by some authority in charge for tackling the issues at stake and equipped to do it.
It is a shift from many not-really-sovereign entities to common authorities where sovereignty is fairly shared among the members.
Climate change offers a great example, but it isn’t the only one. The issue of nuclear nonproliferation is another one. What about financial instability?
From the global citizens’ perspective, the answer is not an allocation of power in whatever authority, but in the kind of authority they can interact with, and control. An authority provided with legitimacy and accountability, whose policies are inclusive.
The United Nations are not yet this kind of authority, nor the Bretton Woods institutions, but single projects and processes are leading the way. See, for instance, the World We Want platform.
Some regional organizations, as the European Union, paved the way (to some extent), but they can still improve.
Some atypical new international organizations opened innovative paths of supranational interaction among stakeholders: the Kimberley Process, the Internet Governance Forum, the Global Environmental Facility. They are an example of what I call democratic experimentalism.
The way from limited sovereignty to shared sovereignty is not a short or easy one, but what really matters is that it is not a loss, but a gain in sovereignty.
The declaration of 9th May 1950 by the French Foreign Minister Robert Schuman is the foundation of the European integration.
It was a proposal to Germany and other interested countries to create a common independent authority responsible for managing the French and German production of coal and steel.
Iron and coal mines are on the borders between France and Germany and they have been the reason for many wars between the two countries. Moreover, the two natural resources were -at the time- the very grounding of a prosperous economy. For this reason, what may appear as a mere economic agreement was in fact intended to preserve peace and foster prosperity.
The proposal, inspired by Jean Monnet, suggested that the classic diplomatic way to manage intergovernmental relation could be overcome by a new method: a conferral of powers to an independent authority able to bind with its decision the member states. The European Coal and Steel Community had from the very beginning a Court of Justice, whose decisions were binding, and a Parliamentary Assembly. The proposal was accepted by Germany, Belgium, Holland, Italy, and Luxembourg.
The vision was already clear in the Schuman’s declaration:
“World peace cannot be safeguarded without the making of creative efforts proportionate to the dangers which threaten it.
The contribution which an organised and living Europe can bring to civilisation is indispensable to the maintenance of peaceful relations. In taking upon herself for more than 20 years the role of champion of a united Europe, France has always had as her essential aim the service of peace. A united Europe was not achieved and we had war.
Europe will not be made all at once, or according to a single plan. It will be built through concrete achievements which first create a de facto solidarity. The coming together of the nations of Europe requires the elimination of the age-old opposition of France and Germany. Any action taken must in the first place concern these two countries.
With this aim in view, the French Government proposes that action be taken immediately on one limited but decisive point :
It proposes that Franco-German production of coal and steel as a whole be placed under a common High Authority, within the framework of an organisation open to the participation of the other countries of Europe.
The pooling of coal and steel production should immediately provide for the setting up of common foundations for economic development as a first step in the federation of Europe, and will change the destinies of those regions which have long been devoted to the manufacture of munitions of war, of which they have been the most constant victims.
The solidarity in production thus established will make it plain that any war between France and Germany becomes not merely unthinkable, but materially impossible. The setting up of this powerful productive unit, open to all countries willing to take part and bound ultimately to provide all the member countries with the basic elements of industrial production on the same terms, will lay a true foundation for their economic unification.
This production will be offered to the world as a whole without distinction or exception, with the aim of contributing to raising living standards and to promoting peaceful achievements. With increased resources Europe will be able to pursue the achievement of one of its essential tasks, namely, the development of the African continent.
In this way, there will be realised simply and speedily that fusion of interest which is indispensable to the establishment of a common economic system; it may be the leaven from which may grow a wider and deeper community between countries long opposed to one another by sanguinary divisions.
By pooling basic production and by instituting a new High Authority, whose decisions will bind France, Germany and other member countries, this proposal will lead to the realisation of the first concrete foundation of a European federation indispensable to the preservation of peace. (…)”
What we define as supranational, is the original approach to problems whose dimension is just out of reach for single states, it radically differs from the international approach as it creates an authority and a will over the states, subject to the rule of law.
We have to thank Jean Monnet for the elaboration and first experimentations of this conceptual model, but the political courage of Robert Schuman was the necessary ingredient to make it a reality. The prompt acceptance by Konrad Adenauer and Alcide De Gasperi allowed this proposal to become a shared political project.
The brave campaigns by the European Federalists, after the impetus by Altiero Spinelli, founder of this political movement and author of the Ventotene Manifesto made the project evolve over time, to meet expectations of integration and democracy.
A tribute to all our founding fathers. For many of us, your message is still alive.
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…
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.
It just happened to me to watch Troy Davis’ presentation at TED X Strasbourg
and I think that any global citizens should watch it as well: I couldn’t explain better how making world peace is the ultimate goal of supranational democracy…. and why supranational democracy is exactly what is needed to get there.
Thank you Troy Davis!
We know (or think to know) the exact meaning of the word “democracy”. Our idea of democracy is grounded on personal experiences of democratic – or undemocratic – national systems as well as on something we studied at school: the Magna Charta, the Déclaration des Droits de l’Homme et du Citoyen, the United States Declaration of Independence.
And we all know the origin of the word in ancient Greece from the two words “Demos” and “Kratia“: people and power. So, democracy literally means power to the people or power for the people. No doubt it means for us free elections, equality, pluralist society, fundamental rights, access to justice.
We tend to forget, nonetheless, that this definition is relative in space and time. In the ancient Athens as in the 13 American colonies there was an aristocracy living on the work of slaves and women enjoyed very few fundamental rights. Only in the XX century, our democracies acquired the current structure and still… we cannot say they perfectly mirror our ideal of democracy. Let’s face it: democracy is more a process than a state. Whatever the democracy we are in, there is always something we can do to improve it. This is clearly recognized in international rankings – such as the Democracy index or the Global democracy ranking.
Both rank countries according to levels or degrees of democracy, not just by its existence/non-existence. Not only democracy is different according to historical evolution, it is also different according to the territorial dimension we are in. Democracy in a city-state is radically different from democracy in a big country: different ways to build consensus, different ways to participate. In the first it is easy to use the instruments of direct democracy, in the second it is less. And still, both are states.
The difficulties involved in moving this democracy model from the state to the global arena are all too evident: we deal with a community of states and a community of individuals (humanity!), both crossed by deep cultural differences and dramatic inequalities. Not only there isn’t a shared concept of democracy in a framework different from the state, but it is simply impossible to apply to international organizations a model of democracy conceived in the eighteenth century for the state. Several attempts have been done by academia to build an autonomous model, but we are far from a shared vision. Moreover, international organizations are the result of a different evolutive path over the centuries, grounded on the principles of international law: a law for states, not for individuals inspired by the different logic of international relations.
So, a new democratic model for global institutions has to be implemented and, at the same time, old visions -not serving us anymore- have to be dismantled. Utopistic? For sure! But have we a different choice? Before an institutional formula for global democracy, we need a methodological approach to get there. The aim is double: to evaluate the existing “level” of democracy in international organizations and to propose possible reforms in line with the legitimate expectations of democracy emerging in the global civil society.
Utopistic? For sure! But have we a different choice? Before we imagine an institutional formula for global democracy, we need a methodological approach to get there. The aim is double: to evaluate the existing “level” of democracy in international organizations and to propose possible reforms in line with the legitimate expectations of democracy emerging in the global civil society.
My suggestion is to ground this process on values more than on rules and institutions: let’s identify values first. My choice? Legitimacy, Accountability, Inclusiveness. They will be explored, one by one, in the following posts.
Which is your idea of democracy? Do you have a different list of values? A ranking of priorities? I’d love to know!
The global challenges and concerns we face today are well known: the peaceful coexistence of states and the non-proliferation of weapons of mass destruction, the deterioration of the environment and the need for sustainable development, the threats to financial stability, the tragic inequalities across the planet in wealth and democracy.
We need to do something. And, first of all, we need to reflect on what to do.
To face such challenges and to guarantee global public goods, the international community has created after world war II a number of international organizations responsible for the pursuit of specific goals, which have been given more or less adequate competences and tools.
Are these organizations democratic? Are they efficient? If the answer is no (or not enough) how could they be improved?
Could we – 75 years later – imagine something new? Is there a better way to organize coexistence inside the human family, not just aimed at avoiding conflicts but at thriving as species, in harmony with the Earth and with all the other living beings?
The awareness on these topics is growing. It is time to become creative, to network and exchange ideas, to recreate and co-create a new way of living together on this planet (maybe to dis-create something as well…).
Democracy is the result of a social pact: we are all involved.
Democracy nowadays cannot just be national as problems and challenges are getting more and more global.
To try to respond to the challenge, I decided to focus on what are (at least for me!) the three key ingredients of a modern democracy: legitimacy, accountability, inclusiveness. I built on them a paradigm for democracy in international organisations which I called democratic experimentation.
As individuals are an essential ingredient of democracy, I think that democratic international organization should be supranational, or move towards more advanced forms of supranationality. But how individuals can interact on a global stage, legitimize global fora, hold them accountable?
So many topics to discuss about, so important to deepen the analysis and offer solutions. The debate is open and you’re all welcome!