Multilateral Help: Analysis of the Perception of the International Financial Institutions
Analyse der Wahrnehmung der Internationalen Finanzinstitutionen (IFIs, namentlich der Entwicklungsbanken) in der Schweiz, besonders bei den NGOs, dem Parlament und den Medien.
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.
International Organisations are currently in a difficult position. Globalisation has not only brought financial benefits to the (mainly western) world population, but has also increased public awareness to international problems such as poverty and environmental degradation. In the public eye the international organisations are supposed to tackle these challenges and decrease the negative impacts of the globalisation process. However, national governments are not willing enough to sacrifice some of their powers in favour of those organisations, which they would require in order to implement change. The result is often a bad perception or image of these organisations in the public.
In the context of a practical course at the University of St. Gall with a focus on development cooperation our group was confronted with the task of analysing the image of the International Financial Institutions. The short timeframe for the elaboration on this broad topic, forced us to concentrate on one institution only. In this paper, we will therefore concentrate our analysis on the World Bank and ask ourselves what the current image of the World Bank is and if it is really as bad as we can expect from current trends described above. We will then elaborate on the question if there is any need to actively promote change to this image and, if so, we will try and formulate simple recommendations for the Swiss authorities, which are in direct contact with the World Bank.
In order to find out how the World Bank is perceived we carried out a series of surveys targeting different stakeholder groups. We confronted people from the streets, students, experts, media representatives and exponents of Non- Governmental Organisations (NGOs). We would like to take the opportunity to thank everyone who was kind enough to help our group with our surveys and interviews. Especially, we would like to extend our gratitude to Mr. Reinhard Haslinger and Ms. Juri Sekiguchi of the World Bank, Mr. Pietro Veglio of the Swiss Institute for International Economics and Applied Economic Research, Mr. Hans Galli Stefan Schnyder and Ms. Viera Malach as media representatives, and our contacts at the various NGOs.