Is the international architecure adequate? Is there a need for reforms? Do we need UNCTAD and WTO, UNDP and WB, IMF and WB? Do we really need both Bretton Woods and UN institutions in the same areas of concern, or is this a useless duplication?
In this paper, we address a multitude of issues regarding the multilateral landscape which works to deliver development aid. We have strived to answer numerous questions that have been posed by representatives from SECO, Switzerland’s State Secretariat for Economic Affairs. In the process of analyzing the historical evolution of multilateral institutions and the current development aid landscape, we have found that there is no one-size-fits-all solution to its real and perceived problems. Especially after receiving feedback from SECO representa- tives in April 2008, we realized that no reform will fix all the problems and that even reform models which may appear to be quite promising will find critics. Due to this fact our paper does not so much try to prescribe solutions to perceived problems, as it tries to bring all the issues to the table, outline different positions and perspectives, and offer multiple viewpoints. Although we do identify some potential areas for reform, we note the shortcomings of the proposals. We hope to provide a fair and balanced assessment of the multilateral development aid landscape and its reform potential.
The paper is structured around the questions which were posed by SECO. First we will address the question of whether or not there is a need for reforms. Approaching this question from an unconventional angle, we will examine the arguments against reform to then show that reform is indeed desirable. Once we have determined that reform is needed, we will turn to the individual institutions that form this landscape. In the second part of the paper we will take a closer look at several of the specific institutions to shed light on the question of whether or not we really need the UNCTAD and the WTO, the UNDP and the World Bank, or the IMF and the World Bank. We will explain each institution’s role in the multilateral landscape, along with some analysis of the culture, legitimacy, funding mechanisms, and membership of the organizations. The goal of this exercise will be to identify in which areas these institutions have a comparative advantage over other institutions and where there is duplication of efforts. In the third section we will address the question of whether or not we really need both the Bretton Woods and UN institutions. To do this we first examine what would happen if these two groups of institutions were merged into one. Our analysis uses elements of merger theory from business administration studies to identify the advantages and disadvantages of a merger between the Bretton Woods institutions and the UN institutions. We determine that a grand merger would not be a positive development. In the fourth section we turn to more practical ways to deal with duplication of efforts. Expanding on some of the ideas introduced in the UN report “Delivering as One,” we propose more coordination at the country-level and increased competition in the market for development aid to increase efficiency and effectiveness. In a fifth section, we look at another way to stimulate competition within the field of development aid by looking at award competitions for innovative projects.