Rapid changes in the world economy are transforming the role of multilateral aid. The UN development system (UNDS)âthe family of UN organizations, funds, programs, specialized agencies, and affiliated mechanisms charged to negotiate and implement international development objectivesâis affected by these changes. The UNâs global scope and universal intergovernmental membership are the basis for its unique legitimacy, but they can also be handicaps in a world economy increasingly driven by the private sector and by a civil society empowered by the digital revolution.
This chapter attempts to look at some of the changes now having a significant impact on the governance of the UNDS at three levels. It begins with the UNDSâs relevance and ability to deliver on agreed international development objectives. Next the chapter explores the systemâs ability to support other core objectives of the UN such as international peace and security; its normative functions, including human rights and rights-based approaches; and the roles of specialized agencies in traditional public sector areas. And third, it looks at the ability of the UNDS to be a catalyst for partnerships with other global actors on key issues of global importance. The chapter is intentionally global in scope and does not examine country-level issues in detail or reforms of individual UN development funds, programs, or agencies.
The UN development system
The UN family of organizationsâwith its main organs, funds and programs, specialized agencies, commissions and committees, and its network of cooperation with other global actorsâconstitutes the nucleus of global intergovernmental cooperation. This means that there are linkages also to the wider debate about global governance, which was once but is no longer exclusively focused on traditional international organizations with the wider UN system at the center.1 Global governance is now a much wider concept, in which intergovernmental cooperation will have to define its role and added value among a rising number of other actors. Efforts to strengthen regional and sub-regional organizations, inter-regional cooperation such as SouthâSouth networks, and more exclusive groupings such as the Group of 20, divert political energy and resources away from the global intergovernmental system, which is experiencing cutbacks in core budgets and reductions in voluntary contributions. Together, these other actors are growing much faster in number and in resources than global intergovernmental cooperation, however it is measured. The multilateral system, owned and governed by UN member states, is also evolving; but it is being pulled in various directions and has to determine its strategic role in an increasingly crowded and competitive institutional environment. To borrow an expression from a recent article, the world is becoming more âunruled,â which raises new questions about the role of multilateral institutions in relation to global governance.2
The UNDSâalongside international peace and security and human rightsâconstitutes one of the three main pillars of the UN system. Inevitably, the UNDS is affected by rapid changes in the world economy and their impact at the country level. The discussion about the future of aid, the fragmentation of international development efforts, including multilateral aid, and the demand for more concrete results have exerted pressure on the UNDS to deliver more effectively at the country level, to report and to communicate better its achievements, and to continue its reform efforts. Some of the most lucid observers of the UN system argue that it presently seems âremarkably ill-adaptedâ to the challenges of the twenty-first century.3 Others argue that the UNDS stands at a crossroads. It can âeither embrace the deep reform required to remain relevant in todayâs global economy, or face the prospect of continued marginalization.â4
The UN Development Group (UNDG), a formal coordinating group encompassing some 30 different entities, forms the nucleus of the UNDS and is an integral part of this wider UN system. The fact that most of these entities have autonomous governance mechanisms is both a source of fragmentation and a reason why consolidation and mergers are hard to achieve. The international financial institutions (IFIs)âthe International Monetary Fund (IMF), the World Bank Group, and the regional banksâhave special responsibilities within the system regarding monetary and financial issues, major investments in infrastructure, and systems development. For such key issues on the development agenda as providing capital for investment, economic growth, and job creation, the IFIs are the key players. They should be regarded as parts of the same global intergovernmental development system with largely the same owners, funders, and governorsâthat is, member states. The case for closer collaboration between the UN system and the IFIs is compelling,5 and the new spirit of cooperation between these institutions initiated by the UN secretary-general and the World Bank president in 2013 could be an encouraging development.
Universal membership and the intergovernmental character of the UN system are important to understanding its role and limitations in relation to other global actors. In an international system built on Westphalian principles, viable and stable member states with democratic governments and the provision of basic public services are still the main building blocks, although they remain absent from a large number of UN member states. The resulting impediments from noninclusive and non-democratic countries are limitations from the world organization, as is its intergovernmental characterâdespite such openings as the Global Compact, UN deliberations and operations often exclude or minimize participation by key actors from civil society, business, and the media. In the field of development, governments are still accountable for overall development policies, but most of the key toolsâsuch as access to capital, technology, and investmentsâare now dominated by market-based actors and a variety of other instruments.
The effectiveness of the UN system remains dependent on the ability and political will among member states to agree on key objectives, priorities, reforms, and common actions. Setbacks and standstills in global negotiations are almost by definition due to the fact that member states continue to have different national interests and priorities and not due to an institutional failure of the UN system. In the governing bodies of most UN organizations, member states are able to reach consensual or compromise solutions on most ongoing issues, but often at the level of the least common denominator and sometimes by piling priorities on top of one other. The role of groups may be necessary for the management of negotiations, but they can, together with a strict interpretation of the rule of consensus, also reduce flexibility and possibilities for innovation. Linkages to other issues, such as the lack of progress in making the UN Security Council more representative of todayâs world, damages the legitimacy of the UN in the global South. Comprehensive reforms are clearly desirable, but until a critical mass of member states agrees on the direction and structures of a rejuvenated UNDS, reforms will continue on the step-by-step basis inherent in the very process of multilateralism.
One of the most challenging tasks in reforming the United Nations has been to find the proper balance between strengthening accountability within secretariats toward the executive boards, donors, and partners, on the one hand, and avoiding micromanagement, on the other hand. Member states have every right to hold UN secretariats accountable for the way money is spent, to insist that rules and regulations be respected, and to require that concrete development outcomes be identified and reported. But this balance may now have tipped too far toward micromanagement. Efforts to strengthen accountability systems have sometimes led to detailed and hierarchical operational rules and regulations, for instance on procurement and human resources, reducing the flexibility of program managers in the field to react quickly to changing situations. The major powers and developing countries often join forces in resisting strong mandates and organizational flexibility for executive bodies under the leadership of the secretary-general and agency heads.
Increased earmarking of funding to the UNDS by donors has also undermined core multilateral principles of shared goals, collective funding, and common action, further increasing fragmentation and reducing the flexibility of agency leaders.6 Earmarking has increased significantly, accounting for 72 percent of total funding for operational activities for development in 2011.7 Earmarking will not disappear, and âsofterâ earmarking to the main priorities of each agency can partly reduce fragmentation. A further transition to a more demand-driven approach will nevertheless diminish the UNDSâs ability to implement common objectives and risk transforming it into a global contractor or consulting firm for member states.
If member states really wanted to reduce the fragmentation of the UNDS, they should restore the balance between regular budgets and voluntary contributions, and reverse the trends toward earmarking. They would also do more to abide by a guiding principle developed by the Development Assistance Committee (DAC) of the Organisation for Economic Co-operation and Development (OECD) to define the âgood behaviorâ of donors in the multilateral system_ âuse and strengthen existing channels and think twice before establishing new ones.â8
Development objectives in a rapidly changing world
The period since the first UN development decades in the 1960s and 1970s has witnessed profound and transformative changes. Shifts to market-based economies in developing countries, the end of the Cold War, the Internet revolution, and the rising importance of civil society have all affected the economic and political environment for development, both at the country level and globally. The financial crisis has further accelerated a shift in economic power and influence toward such emerging economies as China, India, Indonesia, Brazil, and South Africa.
Geopolitical changes inevitably affect the governance of UN development organizations, including the negotiations on institutional reform. Developing countries have demanded a larger say in the governance of the IFIsâparticularly the World Bank and the IMFâfor years. They are seeking new positions of power and influence in UN bodies. In principle, the UN system should be in a better position than other bodies to be an arena and a broker for the transition now taking place. Developing countries have often looked upon the UNâwhere they have a majorityâas âtheirâ organization in contrast to the international financial institutions where they have felt under-represented. If the ongoing transition in the paradigms of development continues to be seen through the lenses of North/South cleavages that are more and more irrelevant in todayâs world economy,9 any transition will continue to be demanding, however, as many UN negotiations on development issues and on climate change are still dominated by an atmosphere of distrust.
In UNDS governing bodies, other conflicts have emerged. The UNDS has traditionally given priority to low-income countries considered to be most in need of aid. One of the thorniest issues in UNDS governing bodies has been to clarify the roles and responsibilities of middle-income countries (MICs), including the future of multilateral aid in them. There is a growing body of opinion, including a recent FUNDS survey, that the rise of emerging economies requires âmajor adjustments in the system including reducing the physical presence and program in middle-income and upper-middle-income countries where its traditional development cooperation services are becoming redundant.â10 The same survey indicates, however, that even the five countries in the BRICS (Brazil, Russia, India, China, South Africa) group are not unified in their views on UN reform issues. Traditional donors such as Norway argue that âscarce core resources of UN organizations should continue to be used primarily in low-income countriesâ while the MICs, and particularly the upper middle-income countries, âmust be expected to take responsibility for poverty reduction within their borders by increasing tax revenues and implementing a social redistribution policy.â11 Some are increasingly in a position to shoulder more global responsibilities, such as increasing their contributions to UNDS core budgets. Emerging economies have indeed increased their core contributions, but the volume remains modest. At the same time, some MICsâled by a group of Latin American countries and supported by some Eastern European countriesâhave garnered support in, for instance, the governing bodies of the UN Development Programme (UNDP) and Population Fund (UNFPA) to defend their right to continue to receive multilateral aid through the UNDS.
The time when multilateral development is dominated and financed by the traditional 10â15 donors in the North is approaching its end. Traditional donorârecipient relationships are already being replaced by broader partnerships. There are still OECD member countries that could and should contribute more to multilateral development cooperation, but many of them are struggling with high levels of deficits a...