How institutional structures lead to well governance
The article on study analyses how should be the decision-making carried out within the international scope and under which theory or conception of international relations are obtained more satisfactory results. More specifically, the authors analyze how the different international actors should behave at the decision-making point in a specific project and which are the different factors that should influence in the mentioned decision. As far as making a more plausible approach to the subject, Gehring and Kerler, discuss the process of decision-making which holds the World Bank and as said proceeding has been undergoing changes over the years because of the crisis that the old model of decision-making has caused to the known International Bank for Reconstruction and Development.
Once taken into account the main subject of the article and before explaining in depth the mechanisms developed by the World Bank to make decisions, it is also important to stand out the existence of different theories in international relations to study the behavior of the various actors on the international scene. Each of these theories explains how the different international actors interact between each other and what the relevance of each of them is. Under a contemporary sorting and unattending to subdivisions within each theory, we find: Neoinstitutionalist, Neo-realist and Constructivist School. In the simplified view of the Neo-realist School, the States are sovereign and they must fight for their interests, being difficult the cooperation with organizations except to enhance the interests of the hegemonic power. Neoinstitutionalist School, assumes a possible cooperation with international organizations, because it considers that through institutions it is easier to carry out rules and regulations. Finally, the Constructivist perspective recognizes the need for cooperation between institutions and States because they defend the interests of its member States and that also leads to an effective problem-solving.Under the protection of international law the main subjects of law (actors) are the States. However, international organizations are also coated with international personality, so they also have capacity of decision in matters that concern States. Nevertheless, a border in the scope of the decisions of international organizations should be traced, because the autonomy of Nations is more important. International organizations in their choices are limited by objectives and functions that were committed in its constitution. Nonetheless, when the decisions of international organizations go further, a conflict of interests between the member States, the States affected by the measure and the international organization is generated; as it has happened with certain decisions of the World Bank, as for example in the construction of the Aswan Dam.
In the present article and under a normative analysis, researchers intend to criticize, resolve and give new ideas in relation to the theme of the World Bank. Its aim is not to develop new knowledge but to analyze the action (Handlung). Therefore, under the gaze of the Constructivist Theory and more specifically under Habermassche Theorie des Kommunikativen Handels which defends a rational interaction between the participants, different actions carried out by the World Bank are studied.
Studying thoroughly the subject, it is important to point out that on the discussion of any negotiation every part must be informed, so that an open dialogue of discussion and argumentation can be generated. In the mentioned dialogue the members may be able to show their interests and legitimacy to carry out the proposed measures. Negotiating in this way prevents the use of power resources by the strongest members. In connection to this idea, the authors of the article consider the hypothesis that no action will be taken if this is not assumed under a differentiation of criteria such the avoidance of power resources.
The World Bank, as an organization founded in 1944 works as a cooperative society composed by 187 member countries. These countries or shareholders are represented by a Board of Governors, which is the highest body responsible for formulating policies in the institution. The Governors meet once a year and delegate specific duties to 25 Executive Directors working in the headquarters of the Bank. In the internal World Bank structure, it is also found: the Member States which must first adhere to the IMF, the Senior Management, the Development Committee responsible for promoting the formation of consensus among Governments on issues relating to development and ultimately, the Constitutive Committee which outlines the organization general principles which have to be observed by the Member States. The top five shareholder countries of the World Bank are France, Germany, Japan, United Kingdom and the United States.
In relation to the decision-making model of the World Bank, this has been undergoing changes throughout history, as Gehring and Kerler explain. Initially, decisions were taken only on the basis of economic criteria, without making a careful analyze of the consequences in long term. An example of this was the construction of the dam of Aswan in Egypt which even though it brought numerous advantages, generated adverse environmental consequences as well as population health problems such as schistosomiasis.
This kind of decisions without any environmental basis and only grounded on economic criteria, led the World Bank to its crisis at the end of the 1980s, situation which worsened subsequently. A bad project evaluation and a worse financial-backing-forecast led to a loss of legitimacy of the World Bank. In February 1992, Willi Wapenhans, Vice-President of the World Bank, conducted a confidential assessment report of projects financed by the World Bank (about 1,300 projects underway in 113 countries). The conclusions of the report issued were that 37. 5% of the projects were estimated as unsatisfactory at the end of their performance (against 15% in 1981) and only 22% of the financial commitments were according with the Bank policies. At the same time and in this moment of crisis, the Congress of the United States issued another report, under the direction of Alan Meltzer, which was presented in February 2000 and displayed that between the 65% and 70% of the projects of the World Bank in the poorest countries, failed.
After these results, measures began to be introduced to mitigate the situation of the World Bank by introducing mandatory environmental and social measures (Le Prestre 1989: 198-201). These guidelines limit the ability of the actors involved and force to the realization of a comprehensive economic analysis of each project. Thus, developed countries evaluate carefully the projects in developing countries. Consequently, economically non-viable projects and those that will result in losses to the shareholders of the North (and in the long run to the World Bank) are rejected. Equally, in this way the World Bank tries to carry out the “Millennium Objectives”, in particular ensuring the sustenance of the environment and developing a global partnership for development. The named Millennium goals are eight purposes of human development set in 2000 by 189 countries members of the United Nations, which agreed to achieve by the year 2015.
Thus, under the new World Bank decision-making-scheme the viability of each project should be studied, getting involved every actor in stake when making the decision and, at the same time, each internal organ of the World Bank must inspect the decision. In this way it becomes more difficult that projects are wasteful or not beneficial and that leads to an exit of the crisis in which the World Bank is. Nevertheless and despite of the measures taken, there are different named Bank-funded projects that have been cause of conflict. The Qinghai resettlement case and the case of the Chad-Cameroon pipeline are examples of conflictive projects run by the World Bank.
The case of Qinghai was a project proposed by the World Bank in its fight against poverty in Western China. This project consisted in the transfer of 58,000 Chinese farmers from arid hillsides to plains of Qinghai province, near Tibet and traditionally inhabited by Tibetans and Mongolians. However, numerous criticisms were generated in this respect, because this transfer would reduce the number of Tibetans and Mongols in the area, generating an eradication of these people. In this way, the World Bank with this project was violating part of its own guidelines in relation to cultural minorities; moreover there was a lack of transparency in the publication of the draft. Consequently, a part of its own member States opposed the decision, as well as NGOs.
The Chad-Cameroon project consisted of the construction of a 1070 km long pipeline from southern Chad to the Atlantic coast of Cameroon. However, in this project, the World Bank violated again part of its guidelines, because of an inadequate observance of the situation in these countries. The pipeline threatened the biodiversity and wildlife of the region. Due to this reason and to balance the loss of biodiversity throughout the pipeline, two “compensation'” areas were established. These areas are the national parks of Ma’an and Mbam-Djerem. This project also generated public health problems such as severe dust contamination. Furthermore, the mismanagement of the crude residues and the fluids used for drillings threatened the underground sources of water in the area of deposits. In relation to the Bakola Pygmies people (Southeastern Cameroon), they have been threatened in their livelihood because the pipeline goes through part of their traditional forested lands which they profit for living.
Once analyzed the different points of the article and two of the leading critical projects financed by the World Bank, I step further to expose my opinion about the theme. In spite of the fact that in the financial backing of the projects the World Bank is not the only one involved, it is the one that threatens the most at the moment of making a decision. As Bank formed by different members whose main shareholders are economically powerful countries, it is easy to fall in the risk that such economic power can start measures that are not favorable to all the parts in stake. The World Bank should abide all its guidelines in each project and not be affected on the decisions by the self-interest of each power.
The article analyses the problem under a constructivist point of view, but in my opinion big Sates continue playing a realistic role in which their own interests are more important than the cooperation. Because of that, I find that it would be interesting the existence of an external body or institution which could control and veto the decisions of the World Bank. As far as that idea is difficult to reach, the countries in which the projects are going to be held, should analyze in depth the benefits and effectiveness of the measure and the real interests of the World Bank.
This requires people qualified enough to evaluate the extent of the project consequences and not only politicians who protect their own interests and not those of their nation. At this point is when NGOs and other international organizations, which are really compromised with the development of the countries, are important. Nevertheless the optimum for me would be having a completely open votes system which allowed the citizens to decide whether they find the new measures good or not. For making that possible the population should be given enough information and be empowered to be able to decide, because at the end is always the people who suffers the measures adopted by big international entities, which most of the times are just interested in the interests of its member States and not really on the social welfare.