World Bank president: list of reforms African states should be demanding

I have written an article suggesting that even though the next President of the World Bank will be an American, the selection of the President offers an opportunity to reform World Bank governance and making the Bank more publicly accountable to all its member states and their citizens.

This can be done if African states offer the US and their European allies a deal. They will agree to support the US nominee for President in return for their agreement to implement the following package of reforms:

  • The President will be required to issue an annual public report evaluating how well the Bank is performing against some agreed benchmark; for example, the sustainable development goals. This report will be reviewed by a committee of representatives of the Bank’s stakeholders who will issue their own public report assessing the Bank’s performance against the same benchmark. The advisory council provided for in article 6 of the Bank’s articles of agreement could perform this role.
  • The World Bank’s existing independent accountability mechanisms will be strengthened so their findings become binding. These mechanisms investigate claims by communities and groups of individuals who allege that they have been harmed by the actions of the Bank in Bank-funded projects. The Bank, however, is not bound by the findings of these investigations and so may not take the remedial actions required to resolve the problem.

African states have historically been suspicious of these independent accountability mechanisms. Consequently, it may seem counter-intuitive to expect them to support stronger ones. But growing concerns about the Bank’s extensive immunity from member state jurisdiction have increased the potential for both the Bank and its borrower member states to be subjected to stronger and less knowledgeable forms of accountability.

In fact, the US Supreme Court is currently deciding whether to deny the International Finance Corporation’s claim of immunity and allow an Indian community to sue it in a US court. The case arises from the corporation’s failure to act on an independent accountability mechanism report about problems in a project it funded in India.

If the community wins the case, it could mean that an African country could face the indignity of having a US court pass judgement on the adequacy of the operation of Bank-funded projects in its own country.

Based on the international jurisprudence dealing with immunity of international organisations, one way to avoid this outcome could be for the Bank to strengthen its independent accountability mechanisms so that they offer a meaningful remedy to these complainants.

  • The roles of the President and CEO of the Bank and the Chair of its board should be split and nationals of different countries hold the two positions. Ideally, if the President of the Bank is an American, the Chair of the Board should be a citizen of a borrower country.

This reform would require an amendment to the articles of the Bank. But it would bring the Bank into line with what is viewed as good corporate governance in most countries.

The article, published in the Conversation is available at: http://theconversation.com/world-bank-president-list-of-reforms-african-states-should-be-demanding-110106

 

1 thought on “World Bank president: list of reforms African states should be demanding

  1. While stronger accountability mechanisms are desirable, as you state African states have been “suspicious of these independent accountability mechanisms.” I don’t think a single court case in the US is strong enough to warrant a change of heart by the African countries.

    Such a deal should anyway not be struck before the American nominee is known.

    The biggest change for African development finance in the last decade as been the rise of China. African finance ministers should wish for any reform that will give them more bargaining power over the terms of loans with both the World Bank and any China-led institutions. That needs to be coupled with domestic accountability to their own citizens for the choices governments make.

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