Research Handbook on Global Justice and International Economic Law

Research Handbook on Global Justice and International Economic Law

Research Handbooks on Globalisation and the Law series

Edited by John Linarelli

The fairness of institutions of global economic governance ranks among the most pressing issues of our time. Most approaches to understanding the complex structure of treaties and intergovernmental organizations such as the WTO tend to uncritically accept an economic focus, highlighting gains from trade and the merits of progressive trade and investment liberalization. While the economic arguments are compelling, other ways of thinking about the roles of these institutions have received less attention. The Research Handbook fills this gap by offering a substantial interdisciplinary examination of the normative and policy underpinnings of the international economic order.

Chapter 5: Multilateral development banks and the International Monetary Fund

Paul Clements

Subjects: law - academic, human rights, international economic law, trade law, public international law, politics and public policy, human rights

Extract

The multilateral development banks (MDBs), primarily the World Bank, and the International Monetary Fund (IMF), are the most powerful institutions through which governments of wealthy countries, particularly the United States, influence policies and programs of the governments of low- and middle-income countries. While these international financial institutions (IFIs1) have been instrumental in sustaining and expanding a liberal international economic order, their effects on the well-being of the world’s peoples and on the quality of their governance have been decidedly mixed. Insofar as well-off peoples “have a duty to assist other peoples living under unfavourable conditions,”2 the IFIs have fallen far short of fulfilling it, and often their effects have been harmful. Despite transferring large sums of money intended to promote development, and notwithstanding their rhetoric of service to the poor, their programs have often particularly harmed more vulnerable people. The unsatisfactory performance of the IFIs is due, I argue, to three interacting sets of factors. First, as well as promoting their formal, developmental goals, they have been used to promote the interests of their wealthy shareholder governments, and often the way these interests have been conceived has ended up causing harms. Second, accountability within the IFIs has been weak. They have promoted their own organizational interests without adequate learning from experience or representation of the interests of the vulnerable. Third, their unsatisfactory performance is due to weaknesses in their primary disciplinary or ideological frameworks, development and mainstream economics as they have evolved over the last 70 years.

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