Soziale Bewegung und Protest

Transnational Social Movement Advocacy and the Human Rights Accountability of Multilateral Development Banks

Leon Valentin Schettler

• Publisher: transcript Verlag
• Year: 2020
• ISBN:
  9783732851836
• Edition: 1
• Topic: Politics & International Relations
• Subtopic: Civics & Citizenship
• Index: Politics & International Relations

As Multilateral Development Banks increasingly gained influence in shaping global development, transnational social movements pushed to hold them accountable for their human rights impact towards communities. Leon Valentin Schettler presents a novel causal mechanism of movement advocacy towards MDBs, combining disruptive and conventional tactics. Systematically comparing the evolution of human rights standards and complaint mechanisms over the last three decades, he reveals how the combination of 1) declining US hegemony, 2) counter-mobilization by China and 3) movement cooptation by the World Bank bureaucracy led to a dilution of human rights accountability in the 2010s.

1Human Rights Accountability as a minimum threshold of MDB Legitimacy

Different disciplines study human rights from varying angles. For instance, lawyers engage in debates regarding the legal status and interpretation of human rights, scholars of cultural studies may debate what human rights mean within different cultural contexts and sociologists are concerned with the social conditions for their realization. In the following, I adopt the perspective of a political theorist and seek to ground the demand for human rights from a normative point of view. Yet, I do not aim to discuss human rights detached from our empirical surrounding. Instead, I situate the normativity of MDB human rights accountability obligations, within our empirical world.

This chapter begins by introducing and defining MDBs as a special type of an international organization (Section 1.1). Then, I sketch the transfer of responsibility (and power) from states to international organizations, focusing especially on the augmenting competencies of MDBs. An important takeaway of that section is the insight that MDB activities have autonomous and direct effects on the circumstances and fate of people (Section 1.2). As a result, MDBs need to justify their actions toward the people whose life they affect. As a rule of the thumb, the threshold for MDB legitimacy raises the more governance they exercise. Throughout this work, I understand legitimacy as the “right to rule” (Buchanan & Keohane 2006; Estlund 2007). Two perspectives on legitimacy are commonly differentiated – an empirical and a normative one. While the former – empirical legitimacy - captures the empirical belief among governance addressees that a governor possesses the right to rule (Weber’s famous “Legitimitätsglaube,” Weber, 1978), the latter is concerned with the actual moral properties of a political order (Beetham 1991; Simmons 1999). It is well-established among political scientists that empirical legitimacy is of paramount importance to secure stable and effective governance (Levi, Sacks & Tyler, 2009). In my work, however, I am concerned with the normative legitimacy of MDBs, as only normative legitimacy is capable of grounding movement activism in morality1. I thus build on the following core assumption: Like all international organizations, MDBs are not valuable in themselves. Instead, they derive their ‘raison d’être’ from their instrumental value in serving human interests. This, in turn, is only possible if they adhere to human rights accountability. To substantiate this claim, I first elaborate on my conception of accountability as a set of standards, transparency and sanctions in section 1.3. Then, I argue for human rights as the relevant standard of accountability in Section 1.4, grounding this claim in moral (section 1.4.1) and legal (section 1.4.2) arguments. Yet, I do not stop here, but also situate the normative requirement in the context of larger empirical trends in global governance, adopting the perspective of non-ideal (vs. ideal) political theorist. Specifically, I discuss three proposals for a global order that place human rights protection at their center: (a) an intergovernmental model of well-ordered states, (b) a model of cosmopolitan democracy, and (c) constitutional pluralism (Section 1.4.3). Given the current empirical developments, I argue that only the third model is a realistic option, which implies that MDBs need to assure human rights accountability themselves2.

1.1Multilateral Development Banks – A Definition

The term multilateral development bank (MDB) consists of three components, each of which requires specification. First, they are multilateral organizations comprised of the ‘many sides’. In contrast to bilateralism involving only two parties, multilateralism is “an institutional form which coordinates relations among three or more states (emphasis added) on the basis of ‘generalized’ principles of conduct” (Ruggie, 1992, 598). For decades, the World Bank was the only MDB of global membership and reach. Recently, the landscape of MDBs underwent some change. In particular, the New Development Bank (or “BRICS Bank”) led by Brazil, Russia, India, China, and South Africa was founded in 2014. Only two years later, in 2015, the Chinese-led Asian Infrastructure Investment Bank (AIIB) came into being. Both aspire to present alternatives to the World Bank (Lewis and Trevisani, 2014; Reuters, 2014). Most MDBs are, however, regional in character: the African Development Bank (AfDB), the Asian Development Bank (ADB), the European Bank for Reconstruction and Development (EBRD), the European Investment Bank (EIB), the Inter-American Development Bank (IADB), and the Islamic Development Bank (IsDB). Moreover, there are several subregional development banks, such as the Caribbean Development Bank (CBS) and the Andean Development Corporation (ADC). The International Monetary Fund (IMF), whose mandate is to ensure international financial stability (and not development), is not an MDB (for a more detailed account on the IMF, see Breen, 2013). Then, MDBs are multilateral organizations whose aim, in virtue of their mandates, is development. While MDBs belong to the group of international financial institutions (IFIs), they are thus of a distinct kind and differ from other IFIs whose aim is macroeconomic stability (e.g., the International Monetary Fund [IMF]). For instance, Article 1.1 of the World Bank’s Articles of Agreement states that the purposes of the Bank are “to assist in the reconstruction and development of territories of members” (World Bank, 1989). Similarly, the mandate of the ADB states in Article 1 entitled “Purpose”, that “the purpose of the Bank shall be to foster economic growth and co-operation in the region of Asia and the Far East […] and to contribute to the acceleration of the process of economic development of the developing member countries” (ADB, 1966). Third, MDBs differ from other multilateral development organizations (e.g. the UN Economic and Social Council (ECOSOC)) in that they are banks. In concrete terms, this means that MDBs provide financial assistance to developing countries, by funding projects and providing loans tied to reforms by the receiving government. Typical infrastructure projects involve the construction of roads, ports, or power plants; but also social projects, e.g., aimed at improved health services. Policy-based loans can also provide budgetary support conditional to the implementation of financial or economic policies. Another powerful tool at the disposal of MDBs is to provide concessional assistance (including grants and loans) to low-income countries at below-market interest rates. Multilateral development banks make money autonomously through buying and selling on international capital markets as well as through interest and loan repayments. This provides them with a certain degree of financial autonomy. Yet financially, MDBs ultimately depend on capital subscriptions (shares) from their member states (Park, 2017).

Looking at the broader organizational family, MBDs are a sub-type of the class of international organizations (IOs). According to Archer’s canonical definition, an international organization is “a formal, continuous structure established by agreement between members (governmental and/or non-governmental) from two or more sovereign states with the aim of pursuing the common interest of the membership” (Archer, 1988, pp. 34-35). As noted above, MDBs involve at least three states, their members are exclusively governmental, and their common interest is per definition development. In parallel to other IOs, MDBs consist of different parts that can be analytically separated. The most important analytical differentiation is that between the IO’s executive body on the one hand and its bureaucracy (Barnett & Finnemore, 2004), administration Liese & Weinlich, 2006) or secretariat (Biermann, 2017) on the other3 (for a good overview of this debate, see also: Bauer, da Conceição-Heldt & Ege, 2015). While country representatives with executive functions on IO governing bodies are controlled by their respective country governments, IO secretariats are made up of bureaucrats that are loyal to their superiors, but (largely) independent of country affiliations (Liese & Weinlich, 2006). As a consequence, IO and hence MDB secretariats possess autonomy which they can use to exercise influence, but also “pathologies” (Barnett & Finnemore, 2004). According to Barnett and Finnemore, international bureaucracies

“are often the actors empowered to decide if there is a problem at all, what kind of problem it is, and whose responsibility it is to solve it [and they] thus help determine the kind of world that is to be governed and set the agenda for global governance” (Barnett & Finnemore 2004, p. 7).

The degree of autonomy of a MDB secretariat is in turn contingent on the issue at stake and the degree of member state involvement. Where member states have a salient interest, the main task of secretariats is to assist the governing body technically, logistically, and administratively. Thus, while it would be mistaken to understand MDBs (or IOs at large) as only passive or neutral arenas of states, the influence of member states remains considerable given that they possess financial leverage and care enough (Park, 2017). Hence, while member states remain influential, IOs increasingly exercise power autonomously, too. Importantly both, governing body and MDB secretariats are an integral part of the MDB as a whole. Whether it makes sense to look at them separately, or on the level of the MDB as a collective actor, in turn depends on the research interest at hand.

To sum up, MDBs are organizations that coordinate relations and activities among three or more states on the basis of generalized principles of conduct with the aim to enhance development. MDBs may have either global or regional membership/reach. In contrast to other multilateral development organizations, MDBs provide loans and financial assistance to developing countries. Finally, MDBs consist of different parts, involving the MDB governing body as well as a partially autonomous secretariat with actor hood in its own right. With this definition in mind, I now describe the trend toward increasing responsibilities among IOs generally and of MDBs in particular.

1.2The Growing Responsibilities of Multilateral Development Banks

Globalization describes the increasing political, social, economic and cultural interconnectedness of contemporary societies, due to the transnational movement of money, people, technology, information, goods, and services (James, 2005). As a result, people interact globally on an unprecedented scale. At the same time, global interdependencies increase. Today, it is a commonplace that trousers and telephones involve labor in several countries around the globe before they are sold in a specific location. Also, we become increasingly aware of global common pool resources—in short, “global commons” (UNEP, 2017). The earth’s natural resources including oceans or the atmosphere are well-known examples. Unlike global public goods whose consumption does not reduce the quantity available to other actors (e.g., knowledge), global common pool resources are limited (Ostrom, 1990). The degree of interconnectedness is perhaps most evident with regard to climate change. In addition, though, several policy challenges today—from organized crime, over financial stability to trade and development—have a significant global dimension. Where the scale of interactions and interdependencies increase, people become very aware of the dangers connected with uncoordinated, individually motivated behavior that risks producing a global “tragedy of the commons” (Ostrom, 1990). For instance, locally bound processes such as coal mining in Germany or deforestation in Indonesia and Brazil have a direct impact on the global climate. To avoid such detrimental effects for our collective well-being worldwide and to respond to global challenges, there is widespread consensus among scholars and academics that we need institutionalized forms of global governance (Rosenau, 1992). In particular, academics, politicians and the general public assign IOs a critical role in solving global governance challenges, primarily due to their expertise (Liese et al., IPA Projekt) and because of their ability to enable cooperation among states (Keohane, 1984). Already a decade ago, a majority of the German population believed that the G8 / G20, but also IOs such as the United Nations (UN), the International Monetary Fund (IMF) or the World Bank possessed greater influence in world politics than the German government (Mau, 2007). Despite current trends to openly challenge the very idea of multilateral cooperation through international organizations even among established Western democracies (U.S. withdrawal of support for the UN, the World Trade Organization (WTO), or NATO), empirical trends indicate that IOs have steadily gained in importance—throughout the last decades and especially since the end of the Cold War (Heupel & Zürn, 2018). To recall, I conceptualize IOs generally, and MDBs in particular as partially autonomous actors (see Chapter 1.1). To sketch the level playing field, I briefly address the increase of IO power (with a special focus on MDB bureaucracies) along stages of the policy cycle, including: (a) knowledge-creation and agenda setting, (b) decision-making, (c) monitoring and rule interpretation, (d) rule enforcement, and (e) evaluation (Avant et al., 2010).4

First, international organizations play an increasingly important role in creating knowledge (e.g., shaping core concepts of the respective policy field) and agenda setting. Several IOs, including the Organization for Economic Cooperation and Development (OECD), the World Bank and the International Monetary Fund (IMF), have developed research capacities that surpass those of most states in the world. As a result of these growing research capacities, IOs develop transnational guidelines that provide guidance to a variety of public and private governance actors. Secondly, IOs are increasingly tasked with decision-making themselves, rather than only facilitating compromise among states. In a recent, comprehensive study, Hooghe and Marks collected data on 74 IOs over the period from 1950–2010, looking at the delegation of tasks from states to IO bodies. Specifically, they looked at the responsibilities of IO bodies to access or suspend members, to reform their own mandate, allocate budgets and to engage in autonomous policy making. Their standardized delegation index shows a steady increase in responsibilities of IO bodies, especially among larger and more complex organizations where increasing IO autonomy promises to reduce the transaction costs of cooperation (Hooghe & Marks, 2015). Moreover, majoritarian decision-making has replaced a strict consensus requirement and in consequence vastly increased the ability of international institutions to act. Today, roughly two thirds of all IOs with membership of at least one major power have the opportunity to take majority decisions and thus the ability to cancel vetoes (Blake & Payton, 2008). Third, IOs increasingly perform monitoring tasks and rule interpretation. As the number of international treaties is growing, there is a concomitant need for actors who process and publicize information on treaty compliance. Treaty regimes empower international organizations to conduct such oversight (e.g., the IMF for the financial system; Siebenhüner & Biermann, 2009). Relatedly, the task of rule-interpretation has increasingly shifted to quasi-judicial bodies. While there were only 27 such bodies in 1960, there were 97 in 2004 (Alter, 2012). Rule enforcement remains rare in international politics, but is increasing, too. A first example is the United Nations Security Council (UNSC), which exercises considerable power over the UN’s member states and explicitly claims a right to rule. Both its actions and its claim to authority, however, are limited in scope to the prevention of war and, more recently, the protection of human rights (Hurd, 2008, p. 185). International transitional administrations may temporarily claim the right to assume the role of a state government (Jacob 2014) while the International Criminal Court constitutes an instance of centralized political authority with a right to issue commands that are binding for all states that have submitted themselves to the court by signing the Rome statute (Bogdandy & Venzke, 2012, p. 18). The few number of institutions tasked with rule enforcement contrasts with the extensive amount of international organizations that evaluate policies and institutions through rating and rankings. For instance, rating agencies such as the International Accounting Standards Board (Büthe & Mattli, 2011), the International Panel for Climate Change or the PISA studies of the OECD have gained in relevance (Zürn, 2018). In sum, the scope and depth of international organization’s governance is on the rise among all dimensions of the policy cycle.

Among all international organizations, MDBs are of a special kind. In short, MDBs are member state organizations that seek to enhance development by engaging in knowledge-creation and agenda setting, decision-making, monitoring and evaluation. Specifically, their core activity consists in providing loans and financial assistance.5 While MDBs lack coercive military capacities, some authors argue that their ability to attach conditionality to the disbursement of loans amounts to rule enforcement (Rich, 2013; Zürn et al., 2012). Among all MDBs, the World Bank stands out in terms of relevance and power resources (for an elaborate discussion of the World Bank; see Chapter 4). Consider the first dimension, knowledge creation and agenda setting: here, the World Bank regularly publishes reports and guidelines that are crucial for the development community at large. Examples include the World Developme...

Table of contents

• Cover
• Title Page
• Impressum
• Contents
• Acknowledgements
• Abstract
• List of Abbreviations
• Introduction
• 1 Human Rights Accountability as a minimum threshold of MDB Legitimacy
• 2 Transnational Social Movements as agents of change in World Politics
• 3 Analytical Framework
• 4 Research Design
• 5 Human Rights Accountability at the World Bank
• 6 Case 1: A Revolution of World Bank Accountability (1988–1994)
• 7 Case 2: The Dilution of World Bank
• 8 Analysis
• Conclusion
• References
• Appendix: List of Interviewees and Background Conversations