Global Institutions and Development - Framing The World
Global Institutions and Development - Framing The World
Development
© 2004 Morten Bøås and Desmond McNeill for selection and editorial
matter; individual contributors their contributions
List of contributors ix
Foreword xi
Preface xv
Acknowledgements xvii
List of abbreviations xviii
Bibliography 225
Index 251
Contributors
At the Millennium Summit held at the United Nations in 2000, 147 heads of
state and government agreed on goals for halving world poverty by 2015.
Subsequently, almost all international agencies have declared active support for
these goals to be among their highest priorities. But when it comes to action by
the international agencies, in what sense can we assume that the goals have been
adopted? When it comes to implementation, in what ways will the goals be
modified, distorted or resisted? And what can be done to keep agencies more in
line with what has been agreed?
These are key questions – on which the agency-focused chapters of this wide-
ranging study present evidence, sometimes encouraging; often disturbing.
Modification, distortion and resistance to ideas are inherent in the structure,
personnel and professional approaches of all the international agencies, and this
can undermine the simple implementation of even clearly agreed goals. But all is
not lost. The studies also show some of the countervailing forces at work, espe-
cially well organized lobbying by the NGOs, which can help keep an
international agency on track.
Some of the studies may seem academic, and indeed, the ambition of this
book is to make a contribution to the literature of international relations. But I
hope that my fellow economists working in the World Bank and other interna-
tional agencies will read it, because they in particular have a lot to gain.
Ideas matter – but ideas are also interpreted differently in different institutions
and the ideas and interpretations change over time, again in different ways in the
different institutions. An example is how World Bank staff reacted to the new
notion of social capital; there are gaps in thinking and approach between
researchers and policy makers, between staff with different disciplinary back-
grounds and between those applying the ideas in different policy contexts.
Economists, in particular, regularly lead the way in adapting, modifying and
distorting ideas, often with the best of intentions. Trained to high standards of
precision in thought, and with methodologies purporting to be scientific and value-
free, economists find it difficult to take aboard the perspectives and approaches of
other disciplines. Yet as several of these studies show, concerns with environment,
poverty and participation have frequently been significantly modified and distorted
in the ways international agencies have adopted – and adapted – them.
xii Foreword
But for this to happen, there needs to be more recognition of the entire UN
in the pursuit of poverty reduction. If the task is mainly left to the Bretton
Woods institutions, with these being allocated the bulk of international resources
for poverty reduction, the modifications, distortions and resistance noted in
many of the case studies will undercut the effective achievement of the goals,
even with committed leadership and sincere efforts from Bretton Woods staff to
implement the goals as they perceive them. The rest of the UN needs to be fully
involved, with their different perspectives and approaches strongly and fully
represented. If this is done, the international effort will not only be stronger but
less biased and distorted.
Richard Jolly
Fellow and Former Director of the Institute of Development Studies
Preface
There has been an increasing interest in the role of ideas among students of
International Political Economy (IPE) over the last decade. This interest extends
beyond IPE into the field of international relations and, as such, reflects a change of
direction within the discipline. One can speculate as to why this sudden interest in
ideas has emerged, but it appears that profound transformations engendered by
globalization are an important contributing factor. Within this rapidly changing
environment, dominant ways of seeing and doing are no longer taken for granted.
As academics, we wish to understand why certain changes are occurring and what
ideas guide their direction.
Global Institutions and Development: Framing the World? provides an unique contri-
bution to the growing body of literature reflecting this cultural turn in IPE/IR.
It is unusual in that it makes a conceptual contribution to the study of ideas by
suggesting an eclectic approach informed by such diverse perspectives as realism,
constructivism and neogramscianism. In choosing such an approach, the editors
Morten Bøås and Desmond McNeill reject the institutional and expert-and-
activist approaches to the study of ideas and associate themselves with construc-
tivist and critical theoretical perspectives. Bøås and McNeill find that, within
mainstream constructivist approaches, too little attention is being spent on the
question of how the distribution of power influences the formulation and
primacy of certain ideas. In the editors’ view, neogramscianism, in contrast,
sometimes errs on the side of materialism. However, the consensual underpin-
nings of hegemony in combination with the notion of the social construction of
politics and while being attentive to the importance of power (distribution)
provides a framework for studying the role of ideas, their importance and how
they “travel” within multilateral institutions.
An additional reason for the importance of the present volume resides in the
fact that it forces IPE scholars to seriously consider development issues and the
field of development studies. As a topic, development has been rather marginal-
ized within the fields of IR and IPE. In focusing on multilateral institutions and
drawing on insights from IPE, development studies and other disciplines such as
anthropology and economics, the contributions provide a microcosm of issues and
concerns that resonate with the IPE community. Moreover, even within the field of
development studies, the role of ideas generated by the multilateral institutions has
Preface xv
received very little attention. The United Nations only recently started a project on
its intellectual history (see foreword by Sir Richard Jolly). This is a clear indication
that even within the multilateral institutions there now exists a need to reflect on
the role of ideas, or as the editors have titled their project, on the Creation,
Adoption, Negation, and Distortion of Ideas in Development Assistance (Candid).
Concepts central to the discourse surrounding multilateral institutions include
social capital, sustainable development, good governance and poverty. As
suggested, these ideas are not only important within the development commu-
nity but are also central concerns for IPE, especially when taking into account
the two underlying forces of neoliberal ideology and the economic–technocratic
nexus which informs much of the way in which ideas are traveling through the
institutions. Development and IPE scholars need to be aware of the power of
these forces and how they can shape the policies emanating from the multilateral
institutions.
The volume clearly shows that ideas are not coming from a single source such
as the US treasury. However, in order to be “heard” and accepted, ideas need to
comply with certain pre-requisites; in particular, they need to have a good fit
with the two forces mentioned. If this is not the case, resistance against a partic-
ular idea will be developed and it will be transformed so as to provide a fit. This
has happened, for instance, with the concept of sustainable development.
In short, Global Institutions and Development: Framing the World? by Bøås and
McNeill is a must–read, not only for academics from the fields of IR,IPE and
development studies but also by representatives of non-governmental organiza-
tions who are wondering why certain initiatives find such dogged resistance and
others not. Moreover, those policy–makers and researchers working in the
“world” of multilateral institutions will also find much useful information about
how their own organizations work and why certain policy initiatives may not work
as their underlying concepts have been distorted in the process of taking them on
board. In sum, it is not only an excellent contribution to the RIPE Series in
Global Political Economy but most importantly it is an unique and much needed
contribution to the field of development studies and policy-making.
Otto Holman
Marianne Marchand
Henk Overbeek
Marianne Franklin
July 2003
Acknowledgements
This book is one output from the project on Creation, Adoption, Negation, and
Distortion of Ideas in Development Assistance (CANDID). This project was
financed by the Norwegian Research Council’s programme on the multilateral
system, and hosted by the Centre for Development and the Environment (SUM),
University of Oslo. We would like to thank our colleagues at SUM for support,
comments and criticism. So many people have contributed to this volume that it
is simply impossible to list them all. We are very grateful to those of you who
read some of our many drafts and took the time to share your insights with us.
There are also some persons we cannot avoid mentioning. Thomas Weiss,
Richard Jolly, Louis Emmerij, Tatiana Carayannis, Jan Aart Scholte, Carlos
Santiso, Richard Higgott and Robert Wade have in various ways made impor-
tant impacts on the way in which we think about the relationship between ideas
and international institutions.
As we started to develop this volume we have benefited immensely from
Marianne H. Marchand’s advice, comments and criticism. We would also like to
thank the four anonymous reviewers. We still disagree with some of the comments
they made, but they certainly also improved this volume. Finally we would like to
thank Heidi Bagtazo at Routledge for her patience and professionalism.
Morten Bøås
Desmond McNeill
Abbreviations
Introduction
The impact that multilateral institutions have on development is hotly debated,
but few doubt their power and influence. This book is about the role of ideas in
such institutions. It is remarkable how little is known about this subject: why
some particular ideas are taken up by the multilateral institutions; how they
travel within the multilateral system; and how they are translated into policy,
modified, distorted or resisted. This book seeks to redress this situation by
offering perspectives that can be used to critically assess the political processes
around some of the ideas that have informed the current development discourse,
as evident in the policy prescriptions of the major multilateral institutions.
An ‘idea’ in this context is a concept which powerfully influences develop-
ment policy. It is more than simply a slogan or ‘buzzword’ because it has some
reputable intellectual basis, but it may nevertheless be found vulnerable on
analytical and empirical grounds. What is special about such an idea is that it is
able to operate in both academia and policy domains.1
The relationship between power and ideas is challenging. Do ideas have
power in themselves? Or only to the extent that they are actively taken up by
powerful individuals or groups? And what sort of power do ideas have: to moti-
vate, or to alter the actions of individuals or groups? Clearly, their power must be
tied up with the institutionalization of social action and the material capabilities
that such kind of institutionalization is built upon. What then is the nature of the
relationship; to what extent do ideas change institutions; or do institutions
change ideas?
In this study we are concerned with multilateral institutions, and the exercise
of what Gramsci calls hegemonic power. We suggest that powerful states (notably
the USA), powerful organizations (such as the IMF ) and even, perhaps, powerful
disciplines (economics) exercise their power largely by ‘framing’: which serves to
limit the power of potentially radical ideas to achieve change. The exercise of
framing is composed of two parts: one, drawing attention to a specific issue (such
as the environment or urban unemployment); two, determining how such an
issue is viewed. A successful framing exercise will both cause an issue to be seen
by those that matter, and ensure that they see it in a specific way. And this is
2 Morten Bøås and Desmond McNeill
Emmerij et al. (2001) argue that ideas and concepts are the most important
legacy of the UN.2 Such ideas arise and are developed in the interplay between
the two domains of academia and policy making, but they derive their credibility
from their basis in the former. Examples include the informal sector, sustainable
development, governance and social capital – which have contributed both to
the development of new policy approaches and to institutional change. It is ideas
such as these that are the focus of our interest here, ideas that are widely used by
policy makers and have significant influence on them. Legitimacy in the making
of development policy is often sought from grounding the proposals in a theoret-
ical base and in supporting empirical analysis. In multilateral institutions, whose
constituency is relatively ill defined, this is especially important. Moreover, origi-
nality in ideas seems to be highly valued – whether because of the beauty of new
ideas or the hope that new policies will be more successful than old ones; hence
the often heard critical comment on ‘fashions’ in development assistance policy.
This volume makes reference to all major multilateral development institu-
tions: the World Bank and the United Nations Development Programme
(UNDP); the regional development banks: the Asian Development Bank (ADB),
the Inter-American Development Bank, and the African Development Bank.
Also included are the International Monetary Fund (IMF ), the World Trade
Organization (WTO) and the Organization for Economic Cooperation and
Development’s Development Assistance Committee (OECD-DAC); because
although not strictly development institutions, they have, to varying extents,
played an important role in the multilateral system, and because they too are
actively participating in the arena of ideas – at least with regard to some issues
(e.g. governance in the IMF/OECD-DAC and sustainable development in
WTO). To what extent do these institutions constitute a coherent group?
The term ‘multilateral’ suggests many member countries, but it is unspecific
as to what number constitutes many. It can refer to anything from a minimum of
three countries to an institution that encompasses all sovereign countries in the
world (Caporaso 1993). Some of the institutions we are concerned with here
have almost universal membership (for instance the World Bank and the IMF),
whereas others have clear limitations to membership (e.g. the regional develop-
ment banks and OECD-DAC).
When we talk about multilateral institutions we are also talking about social
institutions. Institutions have been defined as ‘recognised practices constituting
of easily identifiable roles, coupled with collections of rules or conventions
governing relations among the occupants of these roles’ (Young 1986: 107). Or,
to quote another definition, institutions are ‘persistent and connected sets of
rules (formal and informal) that prescribe behavioural rules, constrain activity
and shape expectations’ (Keohane 1989: 3). As social institutions, the multilat-
eral institutions possess a clear coercive quality. The member states and the
other actors in the institutions are expected to perform certain roles, and the
costs to actors who opt out of participation are both uncertain and possibly very
high. This is, as some of the case studies will reveal, one reason why some states
have maintained their membership in particular multilateral institutions, even if
4 Morten Bøås and Desmond McNeill
highly disturbed by what was going on there. Multilateral institutions can thus
be understood not only as socially constructed arenas for the facilitation of
international order and cooperation, but also as battlefields between different
actors (both state and non-state). This conflict aspect of multilateral institutions
is, however, often hidden, largely because they have – ever since their establish-
ment – adopted the doctrine of political neutrality. Most of the policies and
statements from these institutions are (at least in rhetorical terms) founded on
the functionalist logic that technical economic questions can be separated from
politics. In the Agreement Establishing the African Development Bank and the Agreement
Establishing the Asian Development Bank the principle of political neutrality is clearly
present.
The Bank, its President, Vice presidents, officers and staff shall not interfere
in the political affairs of any members; nor shall they be influenced in their
decisions by the political character of the member concerned. Only
economic considerations shall be relevant to their decisions. Such considera-
tions shall be weighed impartially in order to achieve and carry out the
functions of the Bank.
(AfDB [African Development Bank] 1964: Art. 38; ADB 1966: Art. 36)
Almost precisely the same text – word for word – is to be found in the World
Bank’s (1989a) Articles of Agreement, Article IV, Section 10. These statements
of functionality and a technical, non-political approach to development are of
course a facade. Every question concerned with development is a question
concerned with planned social change and thereby also necessarily a political
question. But multilateral institutions strive to avoid or minimize overtly political
action. Important for our understanding of the role of ideas in the multilateral
system is therefore the extent to which a technical, depoliticized approach to devel-
opment has influenced the relationship between power and ideas; to what degree
the technical discourse in the multilateral institutions has influenced the use of
ideas taken up by the multilateral institutions.
Given that the focus of this book is on institutions, and the relationship
between power and ideas, it is not surprising that the disciplinary focus of five of
the contributors is that of political science; but the backgrounds of the others are
quite varied. It is our view that important contributions to the study of institu-
tions can be gained by incorporating insights from, for instance, economic
sociology (the new institutionalism and the old institutional economics), anthro-
pology (not only in relation to small and informal social groups, but also formal
institutions such as development agencies), and from philosophy (certainly to the
extent that the power of ideas derives from their moral content). In studying
similar topics, these different disciplines also find themselves confronting similar
theoretical issues, such as embeddedness and autonomy; the agency–structure
question; and the issue of mutually constitutive phenomena. However, although
this volume has benefited from insights from many disciplines, our work is
located primarily in political science. More specifically, in terms of our theoret-
Power and ideas in multilateral institutions 5
Our own approach falls mainly into the third of these categories. Within this,
Weiss and Carayannis distinguish two rather different bodies of literature: that of
Cox and others (the critical approach) and of Wendt, Ruggie and others
(constructivism). We have much in common with Cox, although not all in this
volume share his normative agenda. With regard to constructivists, we fully
agree with their claim about the social construction of politics. However, we are
also concerned that mainstream constructivist approaches (e.g. Ruggie 1998;
Wendt 1999) put too much emphasis on shared ideas and the role of norms and
legal institutions, and thereby neglect the real relationship between power and
ideas. This is the main reason why we prefer to continue to flag the realist
assumption that outcomes cannot be properly analysed in disregard of the distri-
bution of power. And this is also our bridge to neogramscian critical theory. In
particular, we find the neogramscian understanding of the consensual aspect of
hegemony to be of value in our investigations. However, we also find clear limi-
tations in neogramscianism. If we accept the central premise that both ideas
(shared and contested) and the distribution of power (ideational and material)
matter, then we need to study the interplay between actors and structures in the
various power games that take place in relation to these material and ideational
struggles in multilateral institutions.
Thus we believe that there is much to be learned from the work of Gramsci
and Cox; the former for his theories of hegemony, and the latter for the applica-
tion of such theory specifically to the field of international political economy.
More generally, several of the chapters in this book relate to the so-called
realist–constructivist debate within international relations theory, which is
concerned with issues and questions that have implications far beyond the disci-
plinary borders of political science. In fact, we will argue that most of the
authors in this book (political scientists or not) explicitly or implicitly seek to
establish a middle ground in the realist–constructivist debate; not merely because
the extreme positions in this debate are not sufficiently nuanced, but more specif-
ically because neither perspective is well equipped to cope with the central issue:
the relationship between power and ideas in multilateral institutions.
6 Morten Bøås and Desmond McNeill
We claim that ideas have real power in the political world, but they do not
acquire political force independently of the constellation of institutions and
interests already present (Hall 1989b). Rather, ‘the structure of any social system
will contain three elements: material conditions, interests and ideas’ (Wendt
1999: 139). Interest formation ultimately has both a material and a social basis.
Materialist interpretations will give privilege to material conditions, under the
assumption that they generally determine interests. By contrast, ideational inter-
pretations will give privilege to ideas (Wendt 1999). These two contrasting
approaches may be applied also at a deeper level. In other words, it may be
claimed that material conditions directly influence ideas; or, alternatively, that
ideas directly influence material conditions.
In discussing ideas, in this broader sense, Cox (1986) makes a useful distinc-
tion between ideas as inter-subjective meaning (i.e. shared notions of social
relations which shape habits and expectations of behaviour),3 and as collective
images of social order (held by different groups of people). Collective images
differ both according to the nature and legitimacy of prevailing power relations
and structures, and with respect to the meanings attached to issues such as justice
or the distribution of and access to collective public goods. The difference
between ideas as inter-subjective meanings and as collective images is thus that
whereas the former are generally agreed/shared throughout a particular histor-
ical period and constitute the common framework for social discourse (conflict
included), the latter may be several and opposed (Cox 1986).4 One may thus,
drawing on both Wendt and Cox, suggest that interests are formed in part by
ideas as inter-subjective meaning (independent of material conditions) and in
part by ideas as collective images (influenced by material conditions). Ideas can
be used, knowingly or unknowingly, to promote interests or even more deep-
seated worldviews. Where these run counter to the interests or worldviews of
others, they may be imposed not through the direct use of power, but through
the exercise of what Gramsci calls ‘hegemony’; through the adoption of shared
ideas, and agreement concerning collective images.
Such a process depends crucially, we suggest, on institutionalization. From
both a material and an ideational interpretation, this is a way of stabilizing and
perpetuating one particular social order in the nexus between material condi-
tions, interests and ideas. The current multilateral system can thus be seen as the
institutionalization of the ‘order of things’. The institutions within this specific
system are particular amalgams of ideas, interests and material power which in
turn influence the development of ideas, interests and material conditions. The
approach in this volume is to see the multilateral system as a social construction,
and not as a pre-existing entity. Thus, we interpret institutions within this system
as institutions that take on a life of their own. They may become battlefields for
opposed ideas, and rival institutions may reflect different ideas. The tensions
between different interests cannot be wholly resolved, or even masked; and the
distortion of ideas, with which this research is largely concerned, arises precisely
from this.
Power and ideas in multilateral institutions 7
Masujima (Chapter 11) is different, and falls within the institutional literature
(broadly defined). Nonetheless, seen together these three chapters cast an illumi-
nating light on the role of an idea such as governance. The point of departure
for Jokinen is the fact that the ADB was the first multilateral development bank
(MDB) with a board-approved policy on governance (3 October 1995). The
purpose of his chapter is therefore to look at the political and institutional envi-
ronments in which the ADB’s governance policy was created, and analyse how
these environments influenced the content of the policy. One of the main argu-
ments in this chapter is that the ADB’s governance policy was in many ways a
balancing act, in which it was necessary to find a way of defining the term so
that the interests of Western donors, Japan, the regional borrowing countries
and the Bank itself, at least temporarily, could be reconciled. Ken Masujima’s
chapter is concerned with the approach taken to the governance debate by the
OECD-DAC. At first sight, it may look as if the DAC has a comparative advan-
tage over other multilateral institutions concerning matters pertaining to
governance, since DAC (unlike most other multilateral institutions) is not
formally prohibited from interfering in the domestic affairs of non-member
countries. However, as the discussion on governance became more sophisticated,
the debate in the DAC was taken over by the World Bank. The OECD member
countries preferred to continue this debate in what they perceived as the domi-
nant (hegemonic?) multilateral institution. Thus, seen as a whole, these three
chapters illustrate how issues concerning ownership structure (the ADB vis-à-vis
the IMF) and perceptions about an institution’s importance for policy debates,
lead to differences in approaches, and also why some multilateral institutions (e.g.
the World Bank) become the chosen arena for debate rather than others (e.g.
OECD-DAC).
Chapter 12 (Alice Sindzingre) and Chapter 13 (Asuncion Lera St Clair)
analyse the idea of poverty in the World Bank and the UNDP respectively.
The idea of poverty has become one of the most recurrent concepts in the
development discourse, and the World Bank and the UNDP have both made
world poverty alleviation their main mission and reason for existence (i.e.
legitimization). In Sindzingre’s contribution she examines the different dimen-
sions of the trajectory of the idea of poverty in the World Bank, and links it
with the changes introduced to the concept by other institutions involved in
development, where a ‘consensus’ also has emerged on the priority of poverty.
This enables her to analyse the evolving meanings of the concept of poverty,
and in particular the nascent shift in the World Bank from income poverty to
inequality and multidimensionality. The World Bank has become more open
to other voices under Wolfensohn’s leadership, but a shift towards fuller
participation of poor countries continues to be hindered by many cognitive
and institutional constraints. Thus, as a broad concept allowing for multiple
meanings and policies, ‘consensus’ around poverty reflects the tensions of the
multilateralism-cum-hegemony characterizing the World Bank. The UNDP is
clearly a very different institution from the World Bank. It was created in
1965 in order to function as the specialized agency for the coordination of all
10 Morten Bøås and Desmond McNeill
Concluding remarks
All multilateral institutions were established in order to solve problems. Apart
from the IMF and the WTO, the multilateral institutions we are concerned
with in this book were established in order to promote development and recon-
struction; first mainly in Europe after the Second World War (the World Bank)
Power and ideas in multilateral institutions 11
Because the states that are the masters and clients of international organiza-
tions are a heterogeneous lot, they present a similar heterogeneous task
environment for organizational action. The task they jointly wish on the organi-
zations represents the sum of possibly very different tasks each government
faces at home.
(Haas 1990: 55)
Notes
1 An ‘idea’ in this sense is thus distinct from a policy or programme such as import
substitution, or the New International Economic Order (though it may be closely
associated with one), and it is more specific than a paradigm such as Keynesianism or
neoliberalism.
2 The UN Intellectual History Project is directed by Louis Emmerij, Richard Jolly and
Thomas G. Weiss at the CUNY Graduate Center, and it is analysing the role of the
UN in the evolution of key ideas and concepts about international economic and
social development.
3 Such notions, although durable over longer periods of time, are historically deter-
mined. The order of the multilateral system has not always been represented in the
same way as today, and may not be so represented in the future. It is possible in hind-
sight to trace the origin of such ideas, and also to identify the turning points of
weakening or strengthening of them.
4 Thus collective images are not aggregations of fragmented opinions of individuals
such as those compiled through surveys, but coherent mental types shaped by the
longue durée (see Braudel 1969) and expressive of the worldviews of specific groups.
5 After the end of the cold war an additional field was opened up for the multilateral
institutions when former communist countries were defined as countries in transition
(i.e. from a socialist political economy to a market political economy). In this process it
was widely assumed that they were in need of the guidance of the expert knowledge
of multilateral institutions.
2 The development discourse
in the multilateral system
Knut G. Nustad
Introduction
Development has been one of the most influential ideas of the last century, espe-
cially since the end of the Second World War. The idea is, however, beginning to
lose its hegemonic position. Since the oil crisis in the 1970s, the agents in the
multilateral system appear to have been more concerned with stabilizing the
world market (as exemplified through the structural adjustment programmes)
than actually attempting to alleviate poverty. This abandoning of faith in devel-
opment has been reflected in academic writings in the field. Since the late 1980s,
a group of authors writing from a poststructuralist perspective have begun to
analyse development as a powerful discourse. Focus has been shifted to the way
in which discourses of development help shape the reality they pertain to
address, and how alternative conceptions of the problem have been marked off
as irrelevant (see for example Cowen and Shenton 1995; Crush 1995; Escobar
1984; 1995a; Ferguson 1990; Sachs 1995).
This chapter has two aims: first, it is argued that the idea of development, as
it has been expressed in the multilateral system, has important similarities with
earlier conceptions of development. Although nineteenth-century ideas about
development as formulated by the Saint-Simonians were different from the
version adopted by the World Bank, there were also striking similarities: both
were concerned with imposing order and forestalling social unrest, and both saw
development as emanating from the agency of elites. After pointing out these
constants in the idea of development, the second part of the chapter addresses
the question of whether it is possible to reform the idea of development, by
rethinking it as a people-driven process. This second part, then, explicitly
addresses the question of the role of ideas in the multilateral system, and the
relationship between the institutional framework within which the ideas are
produced and the ideas themselves. The conclusion is somewhat pessimistic, and
it will be argued that the structure of the multilateral system makes it unlikely
that a radical new conception of development will emerge within its boundaries.
Alternatives to development will have to be sought elsewhere.
Before turning to that argument, I want to introduce a dichotomy that I find
a useful analytical tool. That is the distinction between the immanent and the
14 Knut G. Nustad
We must embark on a bold new program for making the benefits of our
scientific advances and industrial progress available for the improvement
and growth of underdeveloped areas. For the first time in history, humanity
possesses the knowledge and the skill to relieve the suffering of these people
16 Knut G. Nustad
Russia was deeply enmeshed in its own version of a traditional society, with
well-installed institutions of Church and State as well as intractable prob-
lems of land tenure, an illiterate serfdom, overpopulation on the land, the
lack of a free-wheeling commercial middle class, a culture which initially
placed a low premium on modern productive economic activity.
(Rostow 1961: 98)
The USA, on the other hand, was the conceptual negation of this situation:
‘The United States … was born free – with vigorous, independent land-owning
farmers, and an ample supply of enterprising men of commerce, as well as a
social and political system that took easily to industrialization, outside the South’
(ibid.: 98). The political dimension of development was stressed by McCloy, the
first director of the World Bank. He promised that the Bank would be good for
American Business, ‘it would create markets for U.S. trade … [and] stop
Communism’ (Caufield 1996: 53).
The Bank began with a strict focus on funding infrastructure in the countries
to which it lent. This approach, which later became known as modernization
theory, was most dominant in the 1950s and 1960s, but it is still influential today.
Modernization theory was based on the belief that the poorer nations would
eventually ‘catch up’ with the industrial countries. The remedy to their poverty
was an infusion of what Hart (2000) has labelled the ‘bourgeois package’: elites,
nation-states, capital, technology, democracy, education and the rule of law.
Enduring underdevelopment was explained in terms of ‘obstacles’1 to this ideal,
internal to the countries concerned, ideologically neutral and solvable by prag-
matic means (Gardner and Lewis 1996).
The development discourse 17
The stress on the creditworthiness of the potential lenders soon created prob-
lems for the Bank, however: it ran out of countries to lend to. This happened
both in its first years of operation and again in the mid-1960s. The predicament
of the Bank led to a change in policy: from a concern with huge infrastructure
programmes in the first decades, the Bank moved into the wider field of
economic policy, directly seeking to influence the economic policy of its
customers.
In the 1970s, it became increasingly clear that most of the debtor countries
had no hope of repaying their loans. Money was being spent on projects that
held no promise of future returns, or was stored away in international banking
accounts owned by development country elites. To prevent an international crisis
by defaulting loans, the so-called structural adjustment programmes of the
1980s, and their modified versions in the 1990s, sought to stabilize the situation
by supplying further loans to pay off interest on debt. This went, as Caufield
(1996) points out, directly against the original aim of the Bank. The granting of
these programmes was, as is well known, conditional on a restructuring of
economic policy in line with present neoliberal economic theory. The object of
the Bank’s operation has thus changed quite dramatically. From the granting of
loans to large infrastructure programmes to advance modernization, present
policies seem more concerned with stabilizing a world market than bringing
about the long awaited development.
The original idea behind the proposal of national banks set forth by the
Saint-Simonians found an expression in the World Bank in three important
ways: first, the initial importance attached to investment in production; second,
the implicit concern with order and stability and the forestalling of social unrest;
and third, the connection of an idea of development with trusteeship.
Development was from its inception intimately linked to the agency of elites:
experts and scientists were given the responsibility for guiding the development
of peoples seen as lacking it.
This version of development was challenged in the 1970s by a group of critics
who established another important connection with Saint-Simonian develop-
ment: the explicit link with capitalism. Like the Saint-Simonians, the
dependency theorists saw capitalism as the problem and the cause of underde-
velopment. But as we will see, their critique was trapped within the idea that
they criticized. Modernization theory had created a condition, ‘underdevelop-
ment’, that it set out to treat. Dependency theorists failed to question this
diagnosis, instead they set out to find its real cause.
production, but this process was matched by one in which they were reabsorbed
into the production process as wage-labourers. This second process of reabsorp-
tion did not take place in the South (Cowen and Shenton 1996). What developed
in the South as an immanent process, according to Frank, was the process of
underdevelopment. The solution was therefore to withdraw from the capitalist
world system.
Other writers were concerned with the futility of intentional development.
They argued that capitalism was a reactionary force; the cause of poverty, not
the solution, thereby echoing the Saint-Simonian critique. A capitalist develop-
ment project thus became a contradiction in terms, and aid was seen as a means
of perpetuating exploitative economic structures (see for example Lappé et al.
1980; Hayter and Watson 1985).
But this critique shows the extent to which ‘development’ had established
itself as a hegemonic idea. It did not transcend the dichotomy of developed and
underdeveloped countries; instead the theory was concerned with discovering
‘the cause’ of ‘underdevelopment’. As Esteva puts it, ‘the very discussion of the
origin or current causes of underdevelopment illustrates to what extent it is
admitted to be something real, concrete, quantifiable and identifiable: a
phenomenon whose origin and modalities can be the subject of investigation’
(1995: 11). Manzo uses Derrida’s concept of logocentrism to make this point.
Logocentrism denotes cases where a hierarchy is imposed on familiar
dichotomies such as West and East, North and South, modern and traditional.
The first term in such pairs belongs to the realm of logos, of the given, that
which needs no explanation. The second term is defined solely in relation to the
first, as its inferior form. It is natural, therefore, that the East should become like
the West, the South like the North, the traditional like the modern (Manzo 1991:
8). According to Manzo, dependency theory, although challenging some of the
modernist assumptions of modernization theory, failed to break free of logocen-
trism:
a table, and behind this table, which distances them from the two litigants,
the ‘third party’, that is, the judges. Their position indicates firstly that they
are neutral with respect to each litigant, and secondly this implies that their
decision is not already arrived at in advance, that it will be made after an
aural investigation of the two parties, on the basis of a certain conception of
truth and a certain number of ideas concerning what is just and unjust, and
thirdly that they have the authority to enforce their decision.
(1980: 8)
The assumptions on which the physical layout of the court is based, that it is
an expression of, is therefore in Foucault’s view foreign to the very idea of a
popular justice. It is this predominance of form that can be carried over to an
examination of development. As the idea of popular justice involved a transfor-
mation of the old system for the Maoists, development organizations have in the
last decade argued for a reformed development that has its origin in people’s
concerns. This bottom-up development seeks to avoid the failings of both
modernization theory and dependency theory. We are presented with an image
where development grows out of ‘grassroots’ concern, assisted and facilitated by
development experts.
These theories advocate a transfer of power from experts to the people
themselves. Thus the Human Development Report issued by the UNDP in
1993 states that in the face of the current challenges to development ‘the best
route is to unleash people’s entrepreneurial spirit – to take risks, to compete, to
innovate, to determine the direction and pace of development’. After informing
us that this year’s report has people’s participation as its special focus, the
authors go on to declare that ‘people’s participation is becoming the central
issue of our time’ (quoted in Mayo and Craig 1995: 2). A more radical
approach is associated with the NGO sector: in addition to advocating an inclu-
sion of the people to be developed in the process, they also argue for a transfer
of power. Their task, as they see it, is one of ‘empowerment’. Thus Nelson and
Wright have argued that ‘participation’ must involve a shift in power to be more
than a palliative (1995: 1). This shift involves an integration of local knowledge
in the development process. In the same spirit, Edwards (1989) argues that
development studies have been irrelevant to the practice of development since
they are based on expert knowledge. The solution, he argues, is to deploy
participatory research methods.
The development discourse 21
But using the language of participation does not in itself constitute a trans-
ferral of power (Nustad 1996; 1997). As Porter (1995) has pointed out,
development since Truman has been the domain of technocrats, and with the
construction of a technocratic discourse followed a denial of human agency.
Hobart (1993) argues that the notion of the expert is closely related to what he
calls the ‘growth of ignorance’ in the local population; the belief that an outside
expert monopolizes the search for solutions presupposes the ignorance of the
people she or he is helping.
This, then, is similar to the point made by Foucault. In the same way that the
form of the court was the expression of a certain conception of justice, so the
apparatus of development is, as Cowen and Shenton have pointed out, built on
an idea of trusteeship. This was not a problem when intentional development
was conceived as a state practice in the first half of the nineteenth century. At
that time, those who saw themselves as developed self-consciously took it upon
themselves to guide those who were less developed. This understanding of an
elite-driven development was also carried into World Bank practices. The
problem arises because the proponents of a bottom-up development argue for a
rejection of trusteeship, yet this notion is embedded in the idea of intentional
development. Cowen and Shenton (1996: 4) call this a tautology: ‘Logically, the
confusion arises out of an old utilitarian tautology. Because development, what-
ever definition is used, appears as both means and goal, the goal is most often
unwittingly assumed to be present at the onset of the process of development
itself ’. According to them, to speak of ‘bottom-up development’ is to confuse
the means and the goals of development. To assume that people have the
knowledge necessary to guide their own development is to assume that they
have reached the vantage point of a position that is commonly referred to as
developed (ibid.).
The form of development therefore implies an idea of trusteeship: that
someone who has the necessary vantage point guides the process of develop-
ment. This is why I remain sceptical of attempts to reform the development
apparatus to achieve a ‘true’ development from the bottom. For this reason,
proposals for reform look more like recapitulations of old efforts than true
attempts at reform. Culpeper (1997: 3), for example, argues that ‘problems such
as overpopulation, global warming and environmental collapse, mass poverty …
can only become more common in the absence of a rule-based, rule-abiding,
and cooperative global community’. This community, further, ‘requires viable
and effective institutions to act on behalf of the common interest’ (ibid.). As
should be clear from the above, this is in effect a reinstatement of the trustee.
The common interest referred to is the enlightened understanding of an elite.
indeed been an important first task. But by focusing the analysis on the practi-
tioners of development and how they construct their object through the
discourse of development, the reactions of the people to be developed are
neglected (Nustad 1999). Much of this writing depicts development as a
coherent system imposed on a passively receptive target population. What is left
out of the account are the responses of the people thus constituted. Thus Kiely
argues that ‘post-development discourse tends to imply a passive Third World,
simply having its strings pulled by an all-powerful West’ (1999: 48). Kiely is not
alone in this critique. It is rather an instance of a critique that has been levelled
against discourse analysis more generally. The Italian Marxist and journalist
Trombadori criticizes Foucault for a ‘lack of individuating real subjects who are
capable of determining a relation of power: in the context of the tension of a
discursive formation or of a particular apparatus in which knowledge and power
are intertwined’, he asks, ‘who struggles against whom?’ (Foucault 1991: 18–19).
Everett (1997) has also argued along this line, pointing out that post-
structuralists have ignored the agency of local elites as well as of ‘target popula-
tions’. She introduces us to the example of a development project in Bogotá,
Colombia, where the local elite used the language of ‘sustainable’ and ‘participa-
tory’ development to secure their interests (controlling the spread of squatting
near the city). She demonstrates that the residents were not fooled by this
rhetoric. Instead they understood what was going on and mobilized against the
development project. From this she argues that the post-structuralist critics of
development ‘have largely failed to reveal the agents of this repressive system. By
leaving out or simplifying agency, they portray development as both more unified
and more powerful than it is’ (Everett 1997: 147). She agrees that those involved
might misunderstand the consequences of development, but goes on to say that
‘this fact does not mean that conscious actions and motivations have no role in
shaping development interventions’ (ibid.). Although she overstates the case, she
has a valid point.
I believe that discourse analysis can be usefully extended by grounding it in
the social reality from where the analysis began. This is also in line with
Foucault’s conception of power as he expressed it in The History of Sexuality,
where power is seen as emanating ‘from the bottom’, as relational and intrinsic
to other social relations (Foucault 1976). Instead of focusing on the institutions
that have established a monopoly on the idea of development, we need to look to
social groupings striving to bring about change outside the established institu-
tional network. A good place to begin, I believe, would be the groups targeted by
development projects. An examination of how people resist, undermine or use
development interventions for their own ends will provide a useful contrast
between institutional and popular approaches to change. Where better, then, to
look for the ‘power’ in development than in concrete development encounters?
This, indeed, is work that is being addressed at the moment (see for example
Arce and Long 2000).
This does not, of course, supply an answer to those who want to salvage post-
development by deriving from it new ways of practising development. As I have
The development discourse 23
argued, I do not see this as a task for critical development theory. This does not
mean that nothing should be done about the problem which development
discourses have colonized. Poverty is a very real problem. But I think it unlikely
that the institutions that have so far made this problem their own, who for at
least fifty years have supplied a shifting stream of solutions and remedies to it,
are likely to solve it. Discourse analysis has helped clarify the problems with the
development apparatus.
Where, then, is the solution to poverty going to come from? To continue the
analogy with Foucault’s discussion of popular justice, where the form of the
court embedded an idea of bourgeois justice, it follows that an expression of
justice that was truly popular would be very different in form than the court. It
would probably not even be recognized as an expression of popular justice by
those working within a court; and had a new court been set up, based on its prin-
ciples, the form would have corrupted the content. The same, I believe, holds for
development. Many critics of post-development have argued that putting one’s
faith in social movements is subject to both romanticism and naivety. But as I
have argued, their call for practical solutions rests on the assumption that the
apparatus now in place has the capacity for delivering a solution.
Notes
1 One example from anthropology is George M. Foster’s (1962) description of ‘the
peasant image of limited good’ as an obstacle to development.
2 Dependent Accumulation and Underdevelopment was written, according to the author in the
preface, between 1969 and 1973.
3 The following two sections draw heavily on an article published in Third World
Quarterly (Nustad 2001).
3 Contesting policy ideas from
below
Norman Long
Introduction
Our lives are more than ever shaped by the global ideas and practices of multi-
lateral organizations. The work we engage in, the incomes we receive, the
commodities we consume, the goods we manufacture, the lifestyles we pursue,
and the cultural identities we don, are all partly made possible, regulated and
often transformed by the policy decisions, programmes, procedures and propa-
ganda emanating from a core of multilaterals such as the World Bank, IMF and
WTO, as well as – for many other people – from UN agencies such as the United
Nations High Commission for Refugees (UNHCR). Much of this goes unnoticed
until critical events affect us directly: for example, the laying-off of workers in
industries that are no longer considered to have ‘comparative advantage’ in the
global economy, or the failure of resource-poor rural and urban households to
make ends meet in times of economic stringency and market volatility, or when
the trading of certain goods is suspended because they fall below internationally
defined quality standards, or when individuals are refused entry visas for a
particular country due to the enforcement of strict immigration quotas. It is, of
course, the poorer nations and social sectors that are disproportionately affected
by these kinds of problems and processes.
Multilateral organizations such as the World Bank, IMF and WTO are
constantly issuing pronouncements about their mandates, successes, promises for
the future, and offering explanations for programme shortfalls, changes in direc-
tion, the continuance of controversial projects, and so forth. What is perhaps
especially striking is that, despite differences in their responsibilities, operational
domains and administrative make-up, they frequently convey a degree of
consensus when it comes to more general goals and means of development. That
is, they espouse a broadly common economic and political rationality. In the
present era, this amounts to being a paid-up member of the neoliberal club of
market-led development thinkers who assign the state a much reduced role in
initiating and steering development, as compared to the space allotted to private
enterprise and civic associations, both local and global. They are also dedicated
to ordering the global economy through the establishment of formal rules for
governing the commodity flows and financial exchanges that link countries,
Contesting policy ideas from below 25
enterprises, producers and consumers. And over the last decade they have
adopted the languages of ‘good governance’, ‘participatory development’ and
‘empowerment’ through civic associations to give greater credence to their policy
agendas and to fend off their critics.
From this arise two central questions, namely where do these authoritative
and influential ideas come from and how exactly are they transmitted and incor-
porated into the institutional thinking of specific multilaterals? Also, how do
multilateral organizations share their ideas and experiences with each other in
such a way as to create common ground in thinking and practice; or are these
similarities only skin-deep, leaving many areas of disagreement, if not conflict?
These and other similar questions are explored in several of the contributions
to this volume. On the basis of this, one can reach some empirical conclusions
about the commonalities and differences between particular multilateral organi-
zations. One should also be able to trace the origins, flows, transformation and
consolidation of specific ideas and policies.
Yet, while all such dimensions and questions clearly merit systematic research,
a necessary prior step involves taking a position on what exactly are ideas and
how can we research them. Although seemingly a semantic problem, it is crucial
that we situate the issue of ideas more generally in relation to processes of
knowledge production and transformation. This lies at the heart of under-
standing how ideas travel, are relocated and reconstituted to acquire new
meanings. The theoretical position I take – namely an actor-oriented/social
constructionist view – can, I believe, offer a useful perspective on knowledge
production and dissemination in respect to the policies and practices of multilat-
eral organizations.
A further requirement for the elaboration of my argument – and one which is
highly pertinent to the recent upsurge of global protest against the policies and
ideologies of the World Bank, IMF and WTO – is that we must widen our
perspective beyond the domains of policy making, academic research and devel-
opment practice to include also all those actors (often considered ‘non-experts’)
who are affected, directly or indirectly, by the actions of multilateral organiza-
tions and who, through their own actions, may themselves significantly mould
the thinking and strategies of such organizations.
On the other hand, much less attention has been given to providing a full
account of all the many circuits and flows of ideas that pass through and around
the offices of the Bank or similar organizations. These diverse ideas are an
important part of the everyday attempts of staff at various levels to accommo-
date the policy directives and to translate and concretize them in specific
procedures and practices. It is also notable that almost nowhere do we find
accounts of how everyday, non-expert or lay forms of knowledge and practice
(both within and outside the Bank) influence these same activities, strategies and
policies.
While several contributors to this volume attempt to fill these gaps by concen-
trating on the impact on multilaterals of certain key theoretical and ideological
concepts, and others probe the internal politics of policy and administration, this
chapter highlights the importance of considering how other actors, stakeholders
and beneficiaries, engage with the ideas and actions of multilateral organiza-
tions. I am especially interested, therefore, in making the point that we also need
to understand how ideas are transmitted, contested, reassembled and negotiated
at the points where policy decisions and implementations impinge upon the life
circumstances and everyday lifeworlds of so-called ‘lay’ or ‘non-expert’ actors.
several schools of thought (both Marxist and non-Marxist). Despite the now-
extensive literature on the interweaving of ideas, beliefs, interests, identities and
social practice, the tendency persists (among policy makers in particular) to
conceive of ideas as ‘tools’ to be used in the manipulation of various critical
audiences (e.g. international elites, government bureaucrats and organized
citizen groups).
As an alternative to these views, Greenblatt (1991) has proposed that we view
ideas as ‘symbolic technologies’. Although his use of this term might be ques-
tioned since it seems to resonate with the instrumentality of applied science, it
does embrace the notion that ideas constitute and are constituted by forms of
social action. Or, as he puts it in a more intricate way, symbolic technologies are
‘most simply inter-subjective systems of representations and representation-
producing practices’. Thus they are co-produced (though not necessarily
‘collective’) forms of practice or ‘sets of capacities with which people can
construct meaning about themselves, their world and their activities’ (Laffey and
Weldes 1997: 210). As capacities they enable and make possible certain kinds of
action or ‘ways of being in the world’, and they also constrain or preclude other
types of meaning and action. They also constitute forms of power through their
capacity to produce or contest certain cultural representations. This focus on
practices implies therefore that ideas cannot be conceptualized as discrete mental
events or objects; nor should they be seen as separate from, but rather as consti-
tutive and productive of, interests.
often the case than the clash of well–defined opposing viewpoints, beliefs or
rationalities. This also holds for the rhetorical content of official government
statements drawn up by politicians and their ‘spin doctors’.
On this basis one might argue that the advancement of any particular
discourse depends on the strategic use of other discourses. This is illustrated, for
example, by the way in which neoliberal policy statements with their stress on
‘letting the market do its job’ are now often accompanied by discourses that
emphasize issues of ‘equity’, ‘participation’ and the problems of ‘marginaliza-
tion’. Indeed, structural adjustment measures have, in turn, given rise to ‘social
compensation’ policies aimed at protecting the badly affected poorer and weaker
social sectors. The World Bank, along with various national governments, has
eventually been obliged to introduce the latter in order to counterbalance the
growing evidence of marked decline in incomes and living conditions among
these poorer sectors.
This brings out the important point that shifts in policy discourse and priori-
ties are not simply provoked by the challenge of alternative development ideas or
theories, but often by critical events that dramatically reveal the striking discrep-
ancies that exist between the stated policy objectives/expectations and actual
outcomes and social conditions. I will later return to this when I describe the
new social movements that now act globally as a vanguard for change, using
elaborate counter-discourses against various multilateral organizations such as
the World Bank, International Monetary Fund and World Trade Organization,
which they see as ‘hegemonic’ organizations.
Another self-evident but nonetheless crucial observation is that, although
discourses may be said to ‘belong’ to organizations such as the state, the World
Bank or the local community, it is actually specific actors (i.e. persons acting on
behalf of themselves or as representatives of organizations or informal groups)
who deploy them and recast them. Or, more precisely, it is the encounter
between, or confrontation of actors and their ideas and values (such as farmers,
extensionists, agricultural scientists, traders, international development experts
and managers of transnational companies) that perpetuates or transforms partic-
ular discourses. Adopting such an actor-oriented approach is a good way to
understand these processes, since it places emphasis on situated social practice,
and provides a methodology for analysing discursive practice and development
interface situations (for a full account of this theoretical perspective and its signif-
icance for development research, see Long 2001).
Escobar argues that the power of dominant representations of development is
grounded in the way in which
anchored to how best to alleviate poverty without destroying the potential motor
of development brought by technological innovation and well–placed financial
injections. However, in many cases these efforts seemed to go nowhere. The
reasons for this were manifold, but clearly linked to the persistence of an already
established/entrenched group of experts and a well–organized, behind-the-
scenes manipulative lobby of powerful post-industrial countries. Thus, roughly
the same sets of interests guided the major policy shifts and the funding of devel-
opment initiatives.
However, the world is now affected by the impact of globalization, rapid
developments in information technologies and electronic communication systems
and the advent of digitally organized internet facilities. While the powerful blocs
of advanced capitalist states have been able to use these technologies to their
best advantage, at the same time the internet has given life to a new sense of
global communities, and has thus given local and civil-based organizations the
chance to put their own points of view more forcefully and to enter the policy
debate. This is combined with the use of more aggressive tactics for getting
people onto the streets to engage in direct protest and confrontation with the
organizations responsible for international agreements on environment, trade
and finance. Here we should note the Seattle meeting of the World Trade
Organization and the Prague meeting of the World Bank and the IMF. These
street protests and attempts to force multinational organizations to debate with
NGOs and other grassroots organizations and single-interest groups such as
Greenpeace, together signify a new more global and heterogeneous people’s
movement, not based on existing recognized political bodies with specific aims
and mandates, but on a more diffuse and self-organizing and transforming modus
operandi. That these global counter-development movements are real in their
actions and effects is seen by the various U-turns made recently by some of the
world bodies. Note, for example, the somewhat surprising admission by the
World Bank that structural adjustment and similar measures have not been able
to address effectively the persisting patterns of poverty and the widening gap
between rich and poor in the global scene. But whether this will result in
concrete policy and implementation measures remains to be seen.
This emphasizes the point that discourses and strategies from below can be
brought to bear on multilateral organizations. However, we must acknowledge
that in fact there have always been counter-development discourses. Sometimes
these have been couched in very general terms, such as questioning certain core
values and practices of modernity (often backed by recourse to traditional coun-
terpoised views and institutional forms). At other times they have been rooted in
more localized experiences of the effects of particular development policies and
programmes of intervention. Hence, there has always been an ongoing critique
of development practices and institutional ordering, as local people have sought
space for change, sometimes aligning with local development workers and NGOs
to exert pressure on the agencies of the state.
Before proceeding further with the discussion of counter-development
processes, let me first provide a sketch of the centrality of knowledge and the
32 Norman Long
converge in insisting that rather than exploring the nature and epistemology of
knowledge in an abstract and formalist manner, we should open the path to a re-
evaluation of science-in-the-making. Such a perspective takes full cognizance of
social actors, their values and understandings in the construction of knowledge,
and in the scientific design for alternative or competing ‘projects of society’. It
also takes a stand against treating science and everyday knowledge as being onto-
logically different.
The demystification of science through the ethnographic study of scientific
practice and everyday knowledge brings into perspective a whole new set of
images and representations of how the social world is constructed and orga-
nized. From this new standpoint, a fresh panorama unfolds where the interplay
and interfaces of local people and scientists become central to the production of
more acceptable and ‘human’ solutions aimed at countering the ‘supremacy’ and
‘excesses’ of modern technological and economic development.
These various attempts to study and analyse expert science, scientists’ interests,
and people’s knowledge and aspirations opened the way to detailed ethnographic
studies on how knowledge is created and used by all sorts of actors in their prac-
tical attempts to cope with issues of livelihood and planned intervention by
outsiders. But the creation and transformation of knowledge, we argue, can only
effectively be studied and analysed through an appreciation of how people –
whether peasants, bureaucrats or scientists – build bridges and manage critical
knowledge interfaces that constitute the points of intersection between their
diverse lifeworlds (Arce and Long 1987; Long 1989). This requires paying close
attention to the practices of everyday social life, involving actor strategies,
manoeuvres, discourses, speech games, and struggles over identity networks and
social imagery, since only in this way can one tease out the intricacies of how
knowledge is internalized, used and reconstructed by the different actors. It is in
this way that an actor-oriented perspective on knowledge and knowledge encoun-
ters can help us go beyond earlier social constructivist views which tend to suggest
a dichotomized representation of different forms of knowledge (i.e. in terms of
‘modern science’ versus ‘people’s science’, ‘external’ versus ‘local’ knowledge).
This new focus concentrates upon exploring how practices are organized
cognitively and enacted in everyday performances, not as self-contained cultural
or institutional systems of social thought that frame or guide behavioural
response. An actor-oriented perspective refuses to draw sharp distinctions
between different kinds of knowledge on the basis of their origin, pedigree and
so-called authority. Knowledge is generated and transformed not in the abstract
but in the everyday contingencies and struggles that constitute social life. It is not
given by simple institutional commitments or assumed sources of power and
authority, but rather is an outcome of interactions, negotiations, interfaces and
accommodations between different actors and their lifeworlds.
The lack of commonality in the concept of knowledge (i.e. the contradictions,
inconsistencies, struggles and negotiations that it implies) means that there are
many different intersecting knowledge frames – some more diffuse and frag-
mented than others – that intersect in the construction of social arrangements
34 Norman Long
and discursive practices. These ‘multiple realities’ may mean many things and
entail different rationalities at the same time to the actors involved, but somehow
they are contained and interact within the same social context or arena. It is
these knowledge encounters and interactions that generate locally situated
knowledge.
This process is illustrated by van der Ploeg’s (1989) analysis of how small-
scale producers in the Andes succumb to ‘scientific’ definitions of agricultural
development. He shows that, although peasants have devised perfectly good
solutions to their own production problems (here he is concerned with potato
cultivation), their local knowledge gradually becomes marginalized by the type of
scientific knowledge introduced by extensionists. The former, that is, becomes
superfluous to the model of ‘modern’ production methods promoted by ‘the
experts’, and development projects become a kind of commodity monopolized
and sold by experts who exert ‘authority’ over their subjects. In this way the
rules, limits and procedures governing the negotiation between state agents and
farmers and the resources made available are derived (in large part) from
external interests and organizations. Hence, although it is possible to depict the
relations between Andean peasants and outside experts or state officials in terms
of a history of distrust and dependency, science and modern ideologies of devel-
opment eventually come to command such a major influence on the outcomes of
dealings with cultivators that they effectively prevent any exchange of knowledge
and experience. This creates what van der Ploeg calls ‘a sphere of ignorance’
whereby cultivators are labelled ‘invisible men’ in contrast to the ‘experts’ who
are visible and authoritative.
Such processes, however, are by no means mechanical impositions from the
outside. They necessarily entail negotiation over concepts, meanings and projects
that are internalized to varying degrees by the different parties involved. Thus
the ability of extensionists to transform the nature of agricultural practice is
premised on two elements: their skills in handling interface encounters with peas-
ants; and the ways in which the wider set of power relations (or ‘chain of agents’)
feeds into the context, giving legitimacy to their actions and conceptions, and
defining certain critical ‘rules of the game’. Counter-balancing this is the fact
that cultivators, too, assimilate information from each other, as well as from
‘external’ sources, in an attempt to create knowledge that is in tune with the situ-
ations they face.
The final part of this chapter discusses the contradictions that arise over coca
production in Bolivia, where the interests and discourses of development
promoted by government and US aid severely conflict with the livelihoods, social
priorities and development language of local producers.
Conclusion
This chapter has explored the origins, powers and interests associated with
specific policy ideas. The argument was developed in relation to two intercon-
nected issues. The first concerned how ideas within the field of development
policy and practice are given shape over time; and the second, with how the soci-
ology of knowledge itself has struggled to come to grips with the complexities
involved in these processes.
I started the discussion by indicating how the policy ideas and development
discourses of multilateral organizations are shaped by those who have direct
access to the policy arena – e.g. development policy practitioners, academics,
national governments and multilateral administrative personnel. Yet it soon
emerged that a much wider range of actors was implicated. These included a
rapidly expanding body of ‘lay’ persons and civic organizations hell-bent on
contesting the specific policy measures and decision making constituencies of
multilateral organizations, as well as those locally ‘targeted’ or affected actors at
the implementation end of the process. This was a theme that would reappear at
central points in the argument. Indeed, I argued that the understanding of
knowledge processes in general, as well as those associated with the generation of
particular ideas and frameworks of thinking/acting, rested upon a close-up
analysis of the dynamics of ‘knowledge interfaces’ made up of a multiplicity of
actors and divergent (and often conflicting) interests, values and meanings. I also
pointed to the usefulness of discourse analysis for highlighting the nature and
significance of ongoing struggles between ‘mainstream’ development discourses
and various forms of ‘counter-development’.
These concerns led me in the last part of the chapter to provide an account of
what, for many, may be regarded as an extremely atypical and ugly example of
the kind of development promoted by Western aid donors and multilateral orga-
nizations. Yet, from another angle, the Chapare coca/cocaine production region
of Bolivia may be considered as one of the most successful applications of the
neoliberal idea of market-led development. By growing and processing this crop,
the local population has found a way of generating enough income for its present
and future needs, as well as for investing in local infrastructure and services. But,
alas, this crop is earmarked as ‘illegal’ and so must be eliminated and substituted
by ‘alternative’ forms of production that, actually, bring far fewer benefits. Also
paradoxically, the combined efforts of the ‘war on drugs’ mounted by a Bolivian
military force backed by US ‘advisors’, and the development aid package supplied
by several international and multilateral organizations, has galvanized and
disseminated ‘counter-development’ discourse and measures. Thus it has
contributed to a countrywide movement against the Bolivian government aimed
at extracting a number of critical social policy concessions. This process has now
reached a peak, and we must wait and see how the government and its multilat-
eral partners will attempt to resolve these issues. And we will have to see to what
extent significant and longer-term changes take place in the thinking and practice
of those multilaterals involved. Either way, the case clearly illustrates how
40 Norman Long
1 the need to differentiate the process in terms of the types of struggle that
take place in different arenas and at different levels of the political process;
2 the importance of the existence of multiple, but overlapping, discourses on
development;
3 the significance of the interplay of ‘expert’ and ‘lay’ knowledge and the
social relations that underpin them; and
4 the necessity of grounding understanding in terms of situated social prac-
tices rather than ideal-typical representations.
Notes
1 Building upon Foucault’s perspective on discourse and knowledge/power, several
works have explored the hegemonic nature of narratives, images and discourses of
development organizations and ideologies. See for example Ferguson (1990), Hobart
(1993b) and Escobar (1995b).
2 In a recent lecture presented at the Congreso Internacional de Latinoamericanistas
en Europe (CEISAL) in Amsterdam, Escobar argues for the central importance of
the notion of ‘counter-development’ for understanding multiple modernities. He
draws upon Arce and Long (2000).
3 This section is derived from Chapters 2 and 10 in Arce and Long (2000).
4 The informal sector
Biography of an idea
Desmond McNeill
Year after year the Annual Report of the Uganda Protectorate has referred,
under the heading of industry, to a few large undertakings directly sponsored by
the Government. At the same time the multifarious development of furniture
workshops, soap mills, tire retreading plants, bakeries and brickfields has gone on
largely unnoticed. An official who was once asked about Kampala’s industrial
area said: ‘There are no industries there – only a lot of furniture works, bakeries, maize mills
and soda water factories.’
(Elkan 1959, quoted in Livingstone 1974, italics by author)
Introduction
The term ‘informal sector’ entered the development vocabulary almost thirty
years ago, to refer to the numerous and variegated activities engaged in by people
in poor countries which fell outside the official categories of what counted as
employment. The idea has had a long and productive life, leading to a much
richer understanding of the daily productive lives of a substantial proportion of
the world’s urban population, and significantly modifying attitudes and policies
towards them. In the early 1970s, the context, in terms of development research
and policy, was a concern with the relationship between poverty and employment.
The conceptual difficulty of understanding poverty – and especially urban poverty
– in terms of existing categories and theories (modernization/dualism) was here
closely related to the policy challenge of reducing poverty.
In this chapter I present a critical biography of this idea, which I hope will
serve a more significant purpose than the mere chronicling of an important
concept. For not only is the idea interesting in itself, but I suggest there are paral-
lels between the fate of this and other more recent ideas which have influenced
development policy – such as governance, or social capital – which are still in
their infancy. By studying this particular one, in a structured and critical manner,
we may learn something about others, and how best to deal with them.
Furthermore, the history of this one idea gives us an insight into the history of
development research and policy over this period, which may cast light on recent
conceptual developments. The chapter falls into three sections: first, a brief
‘biography’ divided into historical periods; second, the presentation of a simple
42 Desmond McNeill
Biography
Creation, 1972–74
The term itself was coined at a conference on Urban Unemployment in Africa,
held at the Institute of Development Studies (IDS), University of Sussex, 12–16
September 1971, at which Keith Hart, an anthropologist, delivered a paper enti-
tled Informal Income Opportunities and Urban Employment in Ghana.1 The
concept fitted within an important contemporary debate on employment and
growth and met a very specific need among some economists at IDS who were
then involved in a collaborative series of studies with the International Labour
Organization (ILO) under their World Employment Programme.
In the 1950s and 1960s the ‘accelerated growth’ model dominated development
planning: industrial expansion would result in increased wage-sector employment,
and the benefits would trickle down throughout society. In the process of modern-
ization migrant workers from rural areas would gradually become absorbed into
the city. But by the beginning of the 1970s it was apparent that the theory did not
match the reality, for rapid economic growth had been of little or no benefit to
perhaps a third of the population of underdeveloped countries. ‘Although the
average per capita income of the Third World has increased by 50% since 1960,
this growth has been very unequally distributed among countries, regions within
countries and socio-economic groups’ (Chenery et al. 1974: xiii).
This quote is from the influential Redistribution with Growth, a joint study by the
World Bank’s Research Center and the Institute of Development Studies at the
University of Sussex. These two, together with the International Labour
Organization (ILO), through the World Employment Programme, played a
central role in the creation and adoption of the informal sector idea. Applied
researchers (who were mainly economists) here worked in collaboration with
research-minded aid bureaucrats (also mainly economists). In the formulation of
what came to be known as the IBRD/IDS Redistribution with Growth model, the
earlier country missions in Colombia (1970), Sri Lanka (1971) and Kenya (1972),
all headed by IDS personnel, was very influential.2
It was in the Kenya Report of the ILO that Keith Hart’s term ‘informal
sector’ was first officially used. The term replaced others, of which the most
current seems to have been the ‘working poor’. A few of the people on the (very
large) visiting team undertaking the Kenya study made a visit to a poor neigh-
The informal sector: biography of an idea 43
From 1974 to 1977, the ILO Urbanization and Employment Research Project
undertook studies in Africa (five); in Asia (three); and in Latin America (three). In
addition, Lubell refers to many other studies undertaken in Africa, Asian and
Latin America extending over a longer period. Lubell makes some revealing
44 Desmond McNeill
Most of the field surveys have been carried out in Africa whereas most of
the theorising has been done in Latin America. The approach in Africa has
been largely pragmatic. The casual empiricism of the ILO Kenya
Employment Mission has been reinforced and amplified by the considerable
number of systematic field surveys cited above.
(Lubell 1991: 64)
The point Lubell makes here about field surveys in Africa and theory in Latin
America hints at a tension between the two to which I shall return below. He
comments also on the ‘remarkable resemblance’ between informal sector activi-
ties across very different countries and continents, which also raises rather basic
methodological questions. Does this similarity in findings arise because the
concept is so loosely defined? (see below). On the basis of this overview, Lubell
summarizes five similarities, including:
• informal sector activities absorb between 40 and 60 per cent of the urban
labour force of many of the Third World cities studied;
• informal sector enterprise heads often earn more than the official minimum
wage or the average wage in the formal sector; employees usually earn less
than the official minimum wage;
• backward linkages to formal sector suppliers of inputs are strong; forward
linkages are generally limited to households and other informal sector
producers.
The second point dispels the common a priori assumption that ‘informal’ neces-
sarily implies poor. It is also apparent that linkages with the formal sector are
complex and varied. This issue was central in theoretical debate at this time,
between what may be termed the reformists and the Marxists, a debate which
drew partly on a priori and partly on empirical findings. In brief, were these links
mutually beneficial or exploitative?
Lubell draws another contrast: between radical and critical researchers from
academia, and more conventional and constructive researchers associated with
aid agencies:
Most of the studies sponsored by the international and bilateral aid agencies
have focused on the potentially viable micro-enterprises that constitute
George Nihan’s ‘modern informal sector’. Some of the university-generated
studies, particularly those by the radical economists, have on occasion been
more concerned with the ostensibly marginal activities such as garbage
reprocessing and lottery ticket selling.
(Lubell 1991: 64)
The informal sector: biography of an idea 45
In parallel with these studies, and the policy debate associated with them, there
was a lively debate also in academic circles, manifested in an increasing number
of articles, and later books and doctoral theses. The former appeared both in
multidisciplinary journals of development studies (such as World Development, e.g.
Special Issue 1978), and development planning (such as Regional Development
Dialogue), and also (though generally later) in mono-disciplinary journals, such as
Urban Anthropology and the Cambridge Journal of Economics.
But the debate concerning the informal sector led also, from the mid-1970s,
to both critique and resistance, primarily from two contrasting perspectives (this
in addition to continuing debate concerning definitions – see below). First,
among researchers, there was a radical political economy approach.
Summarized as ‘informal sector or petty commodity production?’ this centred on
the question of whether the relations between the formal and informal sector
were exploitative or not.5 A second, and very different critique, came from some
policy makers in developing countries who were resistant to the implications of
the debate, especially insofar as it was linked to the broader ‘basic needs’
approach.6
Although both the concept of basic needs and the informal sector were asso-
ciated with the World Employment Programme (WEP) of ILO, the former was
much more controversial. An interesting insight into this conflict may be gained
from reading the account of Walter Galenson, who worked at the ILO and was
critical both of the research undertaken, and of Louis Emmerij, Director of the
ILO employment programme.
He is especially critical of the WEP conference in 1976. ‘The US government
representative objected to the implication that the conference … was committing
the ILO to support the New International Economic Order’ (Galenson 1981:
181). ‘A draft document designed to serve as the basis for discussion at the
Conference was drawn up by the Office. … A subtle shift of emphasis away
from employment and towards the fulfilment of unspecified basic needs was
(also) noted’ (ibid.). US officials had a meeting at the Department of Labour to
discuss the draft. ‘The meeting was a heated affair, with the US participants
denouncing the draft on many counts’. The last of the eight objections was:
‘There was Marxist language in the draft that had no place in such a document’
(ibid.: 182).
According to Galenson, the US view was in a minority at the 1976 confer-
ence, but a conference of foreign ministers in 1978 concluded that
But the concept of the informal sector was less controversial than basic needs,
and it continued to have a significant and increasing impact on urban policy and
programmes in developing countries in this period. Here, it is worth referring
especially to the experience of the World Bank. In September 1973, the
President of the World Bank, Robert McNamara, made a famous speech in
Nairobi which signalled a major assault on poverty. But the emphasis was almost
totally on rural poverty. Some in the World Bank were concerned that a major
proportion of the world’s poor lived in cities, like Calcutta, which were in danger
of being forgotten. An Urban Poverty Task Force was established in 1974 to
respond to this challenge, and a new Urban Development Division was set up.
Missions were sent to a number of Third World cities to define urban projects to
be funded by the World Bank, the first being in Dakar, Senegal. The main focus
was on housing and infrastructure. The standard approach was to promote ‘site-
and-service housing’, and later also ‘slum and shanty upgrading’. Here they were
much influenced by the ideas of the architect John Turner and others.
Although the concept of the informal sector was referred to in this work,
employment was not a significant focus – at least in the early urban missions. An
influential working paper – ‘The Task Ahead for the Cities of the Developing
Countries’ – was published in 1975, and took up the issue of the urban labour
market. It described the dualistic distinction between ‘formal’ and ‘informal’
sectors as simplistic (Beier et al. 1975: 51, 52). In this year also McNamara
committed the Bank to an increased emphasis on urban development. The Bank
was at this time collaborating closely with ILO, as noted above, and supported
major efforts on urban research and policy, but it was only in the late 1970s that
the Urban Division of the Bank incorporated its ideas on employment into
urban programmes. On this topic, there was overlap with the responsibilities of
the Industry Department. It is notable that the policies of this department
towards small and medium enterprises (SMEs) changed substantially at this time,
culminating in February 1978 with the publication of a policy paper entitled
‘Employment and Development of Small Enterprises’. ‘Following the new initia-
tive, from July 1977 through June 1984, the World Bank lent US$1.97 billion in
63 projects to support SMEs’ (Lewitsky 1985). It may be significant to add,
however, that in the review by the Industry Department from which this quota-
tion is taken, the term ‘informal sector’ is never used. It was used in the Bank for
describing, and to some extent also analysing the urban economy, and thus had
some influence on the choice and design of projects, but its impact was limited.
Mainstreaming, 1980s
In the 1980s the concept was very widely used, and by the end of the decade it is
safe to say that the term ‘informal sector’ was fully within the mainstream in the
worlds of academia and policy, appearing both in textbooks of development
studies7 and the plans of national and international agencies.
Within academia one can trace the debate, beyond development studies into
different disciplines. The multidisciplinary journal World Development played a key
The informal sector: biography of an idea 47
role in this debate, as in many others. The IDS Bulletin also published extensively
on the topic – understandably in view of the major role played by this institute.
These were especially important in the early years, but others which were less
policy-oriented also took up the term: such as the Journal of Development Studies,
the Journal of Modern African Studies and Economic Development and Cultural Change.
Interest in this field generated further empirical data, and analytical and
conceptual work, with a number of doctoral theses on the subject. The first
doctoral dissertation concerning the informal sector (i.e. using the term) was
completed in 1979. Thereafter, the number remained rather steady year by year.
From 1979 to 1989, twenty-five such theses were written. In the 1990s, the figure
was rather higher, thirty-nine. The peak period was 1994–97 (Data from Library
of Congress, Washington).8
But strains were beginning to show. One source of tension was between
different disciplines, with economists tending to use the term almost as synony-
mous with small-scale enterprises (Schmitz 1982), and even casting doubt on
whether the concept had anything new to add to the understanding of employ-
ment (see for example Stark 1982). During this decade the term began
increasingly to be used not only in interdisciplinary or policy-related journals,
but also in mono-disciplinary journals. Researchers from several different disci-
plines used the term, ranging from sociologists and anthropologists (e.g. Moser,
Rakowski) to economists (e.g. Adachi, Chandra and Khan, Gupta, Gibson and
Kelley).9 Another tension that was inherent from the start – between the
reformist and radical approaches – continued. This was linked both to the theo-
retical analysis of the informal sector and to the policy implications.
In the policy arena, the term was widely used not only by the World Bank, as
already noted, but also by other international agencies (e.g. UNCHS [United
Nations Centre for Urban Settlements]), regional development banks (e.g. ADB),
bilateral agencies (e.g. USAID and ODA) as well as national agencies (e.g.
HUDCO [Housing and Urban Development Corporation], India).10 It is
certainly fair to claim that the concept helped to shape the urban agenda, and to
ensure that the urban poor were not forgotten. Although it is not easy to demon-
strate concretely how it influenced urban development policy, and the choice and
design of projects, it is the case that the urban projects of the World Bank in the
1970s and 1980s were evaluated positively in terms of their overall performance,
and were relatively successful in benefiting the poor, even though here, as so
often, it proved difficult to reach the very poorest income groups.
Distortion/destruction, 1990s
In the 1990s, one might argue, the informal sector ‘idea’ became severely
distorted, or even destroyed. Certainly it suffered the fate of many attractive
ideas by being over–extended. This began to happen already in the 1980s, with
the term ‘informal’ being applied to housing, transport, and later finance.
Another and more interesting development, was that the term was increasingly
applied to cities in developed countries. This actually began earlier, and was
48 Desmond McNeill
The most significant recent change in emphasis has been the shift from the
micro-enterprise as such to the regulatory framework that encourages
informal micro-enterprises to stay small. Avoidance of government regula-
tions and taxes was one of the characteristics of informality originally
specified in the definition formulated by the ILO Kenya Employment
Mission Report of 1972, but informality has taken on a new dimension
since the publication of Hernando de Soto’s The Other Path in 1986. The
new wave of research on the informal sector may be described as an exami-
nation of the compatibility between regulations and growth of small and
micro-scale enterprise activity, with a view to reforming the regulatory
framework.
(Lubell 1991: 64–65)
Thus the development of the term finally turned full circle – in the formalistic
sense of being defined out of existence. Central to the idea of the informal
sector – at least initially, but also, I would argue, subsequently – is that it refers to
activities that fall outside the scope of official statistics. Thus, to agree an interna-
tionally applicable definition of the informal sector is to make it disappear. It is
government statisticians (and accountants) who are the ultimate arbiters of
reality in the modern world. By finally granting official recognition to the
informal sector they also issued its death certificate.
Whether this is the final word or whether further developments occur remains
to be seen, but this completes my brief biography of the idea to date. In the
remainder of this chapter I shall explore some aspects of it in more depth, and
also reflect on what one may learn more generally from this analysis.
Analysis
In the case of the informal sector idea, and, some would argue, in develop-
ment research more generally, there is evidence also of an imbalance within the
North: a dominance of the Anglo-Saxon world (perhaps even more narrowly
focused on East Coast USA and England).
equity and growth (Kuznets 1955; Kaldor 1957), which was challenged empiri-
cally (e.g. Adelman and Morris 1973). The important policy prescription that
resulted from all this information was that ‘average per capita income growth
cannot be assumed to alleviate inequality and income-poverty automatically’
(Taylor et al. 1997).
The early 1970s was a period of rather radical theory (dependency theory,
unequal exchange, etc.) and radical expectations for change (the New
International Economic Order) (see for example Hettne 1995 for an overview).
In this context the informal sector appeared middle-of-the-road, reformist, and
was described as such – at least by its critics. This applied both to the analysis,
where the reformist concept of the informal sector was counterposed to the
more radical ‘petty commodity production’, and also to the policy prescriptions,
which consisted of projects and programmes as opposed to radical changes of
policy. This applies with even more force to the fate of ‘basic needs’, with which
the informal sector is linked.
In the late 1970s came reversal, and a downturn in many Third World
economies. The reasons for this downturn are complex (see Hobsbawm 1995)
but Taylor et al. believe that it explains why Chenery et al.’s Redistribution with
Growth (1974) not have the policy impact it could have had because the oil shock,
the ensuing international recession, and later the debt crisis soon reoriented the
priorities of countries and multilateral agencies’ (Taylor et al. 1997: 438). As they
note, this was the time at which McNamara at the World Bank announced an
all-out attack on poverty.
The post-war golden age came to a close, and one consequence was a ques-
tioning of the role of the state and import-substitution industrialization policies.
During the second half of the 1980s, however, the positive impact of social
services (especially education) on growth was emphasized by a number of
neoclassical economists, and the human capital model was used in the new
Growth Theory. The 1980s was a period of recession, neoliberal ideas, and
neoliberal policies – most notably structural adjustment. Here the informal
sector did not feature prominently, until taken up again in a different guise (as
noted above).
In summary, the ‘idea’ of the informal sector was certainly much influenced
by the contemporary debates, and itself made a modest contribution to both
theory and policy. During the 1970s it appeared reformist – as did the publica-
tion that put it on the map: Redistribution with Growth. Marxists asserted that the
54 Desmond McNeill
informal sector was exploited by the formal sector; and policies to promote it
were seen as ignoring fundamental structural inequalities. By contrast, in the
1980s and early 1990s, such policies seemed almost radical; granting recognition
and even support to groups who were at best on the margins, and at worst in
conflict with state authorities.
In the new millennium we seem to be witnessing in development policy a sort
of return to the middle ground of social democracy: ‘structural adjustment with
a human face’ (following the efforts of UNICEF and others), ‘participation with
growth’. Certainly there is a return to poverty as the central focus, with civil
society, governance and other catchwords, and the search for a complementary
role of state and market. Whether the informal sector has a place in this debate
remains to be seen. But it has both reflected and to a modest extent shaped the
changes that have occurred – in both analysis and policy terms – in the previous
twenty-five years. And an analysis of its history is, I suggest, revealing for the
prospects of other ideas in development studies.
Notes
1 The paper was not published until 1973 (Hart 1973). As a result, the first and crucial
reference to this paper (in ILO 1972) actually precedes it. This is a good example of a
more general phenomenon which applies to the relation between research and policy:
the time-lag in academic publication is often much longer.
2 Hollis Chenery, Vice-President of Development Policy at the World Bank, was
formerly a Professor of Economics at Harvard and supervised Richard Jolly as a
graduate student. Dudley Seers (Director, IDS) had some ten years earlier been a
visiting professor at Yale, and had close contact with Chenery.
3 According to Emmerij (personal communication), it was very unclear what were the
implications of these grand commitments; but there was enormous interest in the
topic, and funding for the studies that followed was overflowing.
4 Some would argue that the leap from description to policy was too rapid. This is a
common phenomenon in the interplay between research and policy, when the former
is at what Portes might refer to as the ‘pre-theoretical’ stage.
5 For an excellent and concise review of the informal sector in historical perspective,
see Gerry (1987).
6 The concept of the informal sector was, according to Emmerij (personal communica-
tion) not inextricably linked to basic needs. It is interesting that the latter (which
might appear on the face of it to be as uncontroversial as apple pie and motherhood)
should be the focus of such intense strife. But while the informal sector was more
limited in scope and (relatively) more analytical, the term ‘basic needs’ was, in fact,
very closely linked to a wide-ranging development strategy which was controversial.
7 A review of relevant textbooks over the twenty-five-year period reveals that use of the
term began from the end of the 1970s, and continued quite steadily thereafter. But it
is interesting to observe that it was increasingly taken for granted – in the sense that
the definition of the term was not problematized – if it was defined at all; and refer-
ences to Hart and/or ILO became less frequent as time went by.
8 By contrast, theses on social capital first appeared in 1989 and a total of sixty-two
appeared in the following decade, the majority in the years 1996–98.
9 See for example Annals of the American Academy of Political and Social Science 1987.
10 For an overview see Harris (1992), which summarizes the experience of key figures
from most of the agencies concerned.
The informal sector: biography of an idea 55
11 The works referred to here are what might be called ‘first generation’ and more
policy-related studies. A much longer list can be found in two recent bibliographies
(Danesh 1991; Feldman and Ferretti 1998).
12 This is beyond the scope of this study, but the gap is clearly substantial. Examples
from Indonesia and India are cited in Harris 1992. ‘The recurrent gap between
strategy and implementation was also a gap between two sets of people – those
designing policy and those implementing programmes and projects’ (44). The terms
of reference of the Madras Metropolitan Development Authority included ‘to alle-
viate the condition of the poor, pay special attention to the condition of the poor, and
the improvement of the informal sector, etc. Did they do anything about it? Nothing
at all’ (75).
13 I have explored elsewhere (McNeill 2000) the criteria that need to be fulfilled for a
good definition: e.g. value-free, not self-referential. In relation to the informal sector
more specifically, I have argued the case for a ‘polythetic classification’.
14 According to Ahwireng-Obeng (1996), studies in over seventy-five countries have
generated more than fifty definitions.
5 Policy stories and
knowledge-based regimes
The case of international
population policy
Ole Jacob Sending
Introduction
The International Conference on Population and Development (ICPD), held in
Cairo in 1994, produced a new consensus on international population policy.
From the 1960s, an economic rationale for fertility control was embedded in the
policy approach of ‘family planning’. The ICPD placed a ‘reproductive health
approach’ to population policy at the core of its Programme of Action (UN
1995). One close participant notes that the ‘Cairo consensus’
In this chapter, I address two questions. First, what made for the relative
stability of international population policy in the form of family planning for over
thirty years, despite the constant controversies over whether and how to organize
population policy? Second, what accounts for the change in international popula-
tion policy from family planning to reproductive health that occurred through the
ICPD process? It will be argued that a clue to answering both questions is found in
the analysis of the knowledge-policy nexus. This is based on a reading of how the
institution of science, because of its universally recognized cognitive authority,
functions to stabilize international policy by legitimizing and validating certain
facts, theories and concepts that create an internationally shared problem-
definition of, and policy response to, a certain phenomenon. Changes in interna-
tional policy will, in this perspective, have to be understood in relation to the
changing content of that body of knowledge which underwrites an established
policy approach, and which defines the cognitive-normative space in which polit-
ical agency is performed. In an attempt to capture this dynamic, I will make use of
two core concepts: policy stories and knowledge-based regimes. Before we proceed to
discuss these two concepts, however, we need to reflect briefly on how the institu-
tion of science structures the modality of political deliberation and governance.
Policy stories and knowledge-based regimes 57
This perspective thus subjects the factual dimensions of political processes to the
interests and normative commitments of actors, in the sense that knowledge is
used to justify and legitimize calls for adopting certain policies to resolve what is
seen to be a problem that ‘ought’ to be resolved.
The formulation is partly inspired by Rein and Schon (1991: 265), who refer
to problem-setting stories that ‘link causal accounts of policy problems to partic-
ular proposals for action and facilitate the normative leap from “is” to “ought” ’.
We depart from Rein and Schon’s conception somewhat by emphasizing more
strongly the factual claims (the characteristics of a phenomenon) and normative
principles (the morally–grounded principles used to legitimize the policy formula-
Policy stories and knowledge-based regimes 59
tion) invoked by actors as they define a problem and argue for a specific policy
approach. The concept of policy stories seeks to capture how actors integrate
knowledge claims into their politically charged arguments so as to ‘frame’ the
issue under discussion. Because of the interlocking of the factual and normative
dimension of policy making, a policy story can be seen to create space for political
agency. That is: a policy story serves, by creating an argument grounded in a body
of scientifically produced knowledge, to persuade and mobilize different groups
as it represents a complete package: an authoritative problem-definition and a
concomitant policy solution that is legitimized in both factual and normative
terms.
A policy story that wins acceptance at the discursive level can be seen to
define the terms of the debate for the establishment of policy and to de-
legitimize competing conceptualizations and policy approaches. Through the
political agency performed through a policy story, it may come to dominate
the policy field as it forms the central cognitive-normative organizing device for
specific formulation and establishment of policy within different organizations.
In this way, the policy story may over time attain a ‘taken for granted’ char-
acter as it comes to structure, and reflect, policy practice. This process of
stabilization is best described as a process of institutionalization. Following Scott,
we can define institutionalization as a ‘process by which a given set of units
and a pattern of activities come to be normatively and cognitively held in
place, and practically taken for granted as lawful’ (Scott et al. 1994: 10). This
latter feature is critical to the argument presented here. In the change from an
argument for a specific policy approach to the establishment of that policy in
practice, the policy story comes to define the cognitive-normative outlook of a
policy regime. This can be defined as an interlock between the knowledge which
underwrites the policy story, and the establishment in practice of the policy
advocated in a policy story. That is: the knowledge that once formed part of an
argument for a policy is now an integral part of the very rationality and iden-
tity of the organization involved with managing this policy in practice. As such
it becomes part of the bundle of routines, rules, priorities and rationality of
the organizations in the policy field (see Douglas 1986; March and Olsen 1989;
Scott and Meyer. 1994).
Below, I employ the two concepts of policy story and knowledge-based
regime to account both for policy change and policy stability in international
population policy. I start off by tracing the formulation of the policy story of
family planning, and proceed to discuss how this policy story, over time, formed
the cognitive-normative identity of the emerging regime of population policy.
Despite long-lasting and fierce political criticism from religious authorities, femi-
nists and others, family planning defined the very identity of the policy field of
population in the multilateral system. I then trace the process of formulating an
alternative policy story of reproductive health. I conclude by reflecting on how
the reception of the policy story of reproductive health was conditioned in its
reception by the cognitive-normative content of the existing regime of family
planning.
60 Ole Jacob Sending
demography became not just a science but a policy science that viewed
intervention in population growth as necessary. Professional demographers,
academically trained at the leading universities, became members of profes-
sions that shared a core body of knowledge, a consistency in methodology,
and a common discourse. Institutionalized through professionalized associa-
tions and supported by the philanthropic community. … population experts
accepted intervention in population with an almost evangelical fervor.
(1999: 2. See also Hodgson 1988)
Policy stories and knowledge-based regimes 63
approach revealed themselves rather quickly. Indeed, as early as 1972, the presi-
dent of the World Bank, Robert McNamara, told the Population Council’s
president Bernard Berelson that there was a growing concern that family plan-
ning was ‘too simple, too narrow and too coercive’ (Critchlow 1999: 178). Also,
developing countries were starting to mount criticism against family planning for
not addressing the root causes of population growth, namely poverty, economic
injustice and the organization of world trade.
Just as the formulation of the policy story of family planning was a strategic
effort on the part of a population movement concerned with the economic prob-
lems engendered by population growth, the emerging women’s health movement
was equally strategic in its efforts to advance a different policy approach focused
on the health and rights of women. Their efforts took the form of strategically
commissioning and using research to establish a different problem-definition of
fertility behaviour, one that emphasized the importance of paying more atten-
tion to the socio-economic status, rights and health needs of women.
for a conference in Nairobi entitled ‘Better Health for Women and Children
through Family Planning’ and organized by the World Bank, WHO and
UNFPA. Germain decided to use the paper to call for a ‘reproductive health
approach’ to population policy. In this initial formulation, ‘a reproductive health
approach’ meant integrating the already existing child survival programmes with
family planning programmes to ensure a broader basis of service delivery that
went beyond mere contraceptive delivery. At the time, none of these
programmes were focusing on the broader health issues related to reproduction
and addressing the concerns and rights of women.9
This conference paper marks the first steps towards the development of the
policy story of a ‘reproductive health approach’. Incidentally, Mahmoud
Fathalla, Director of the WHO’s Special Programme on Human Reproduction,
wrote an article in 1988, published in Human Reproduction, a WHO journal, that
called for the same kind of re-orientation of population policy that Germain was
seeking to effect with her paper. These two papers by Germain and Fathalla
reflect a convergence between feminist criticism of existing programmes, and a
concern in the WHO and in the health profession more generally that family
planning was too narrow and did not address the broader health issues involved
in human reproduction. This convergence would later prove critical to the
women’s health movement, as it meant that their calls for re-orientation of popu-
lation policy had an ally in the central international authority in the health field,
the WHO.
Germain’s paper did not go down well at the conference, as it challenged the
cognitive-normative outlook and objectives of the knowledge regime of family
planning, and was, in her words, ‘heavily resisted’.10 Later, when Germain came
to work with Joan Dunlop at the International Women’s Health Coalition (an
advocacy NGO), they developed a strategy of seeking to reshape the population
field from the inside.11 This meant shying away from the more radical systemic
criticism that certain elements of the women’s movement had earlier launched
against the population field (see Dixon-Mueller 1993). The strategy was quite
explicitly to document and ground through scientific knowledge the health risks of
Third World women related to reproduction, and to point towards a policy
approach that would integrate the economic rationale for fertility regulation with
its health aspects.
In 1987, the IWHC got involved in research on the issue of reproductive tract
infections (RTIs) and sexually transmitted diseases (STDs) among women in the
Third World. Prior to this, all research on these issues had focused on high-risk
groups such as commercial sex workers, and was not included in discussions
about family planning programmes (Dixon-Mueller and Wasserheit 1991;
Wasserheit and Holmes 1992). The work culminated in the convening of a high-
profile conference of health experts in 1991, out of which came a book, edited
by Germain and three others, which not only documented the seriousness of the
problem, but which also included a section with ‘recommendations for action’
(Germain et al. 1992). It was a strategic effort on the part of Germain and other
like-minded actors to construct a policy story of reproductive health12 grounded
66 Ole Jacob Sending
(i) make family planning programmes ‘responsible for reducing unplanned and
unwanted childbearing and related morbidity’, and
(ii) make ‘Broader social and economic policies … responsible for reducing
levels of wanted fertility’ (ibid.).
The significance of this research was partly that it documented serious short-
comings with the existing family planning approach; partly that it identified that
this could be resolved through a focus on the health dimension of fertility. The
policy story of ‘reproductive health’ in this sense invoked a different body of
knowledge to undermine a series of assumptions that were contained in the insti-
tutionalized policy story of family planning.
definition with the approval of the secretary-general of the WHO. This authori-
tative definition of reproductive health served to legitimize the policy story of a
reproductive health approach to population policy.
The reproductive health approach is still not widely understood, even within
countries that have incorporated the approach into policy and strategic
documents. This has led to concerns in some developing countries, such as
Egypt and Indonesia, that the momentum gained through family planning
programs in containing population growth will be lost if the reproductive
health agenda is adopted. Vested interests and ideological positions also
impede progress in implementing the reproductive health approach. Until
facts and resources are mobilized in support of the reproductive health
approach, it is likely to be an ‘add on’ to family planning programs rather
than encompassing them.16
Our analysis above suggested that the reproductive health approach was
effective as it undermined key assumptions of the existing knowledge regime
and, on this basis, inserted new objectives (women’s health and rights) that were
defined as central to the advancement of the goal of reducing population
growth. Yet, at this quote illustrates, the problems of implementation of the
reproductive health approach suggest that the institutionalized policy practice of
family planning, consisting of a network of population experts and programme
managers, and of organizational routine and priority, heavily structures the
motivation and ability to implement a reproductive health approach. This goes
to show that once established as practice and over time consolidated and institu-
tionalized, the cognitive-normative outlook of a policy field does have a strong
structuring effect on the process of establishing new policy practices.
Conclusion
Several observers have noted that the outcome of the ICPD was due to the
efforts of a globally organized women’s health movement (see Finkle and
McIntosh 1995; Johnson 1995; Hodgson and Wattkins 1997; Singh 1998). My
70 Ole Jacob Sending
Notes
1 Singh was Deputy Secretary General to the Conference, and a close aide of the
Secretary General of the Conference, Executive Director of UNFPA, Nafis Sadik.
The Under-Secretary of Global Affairs for the United States, Timothy Wirth,
declared on the last day of the conference that ‘The World will never be the same
after Cairo’, while Nafis Sadik referred to the Programme of Action as a ‘paradigm
shift’ (Singh 1998). For similar interpretations of the ‘Cairo consensus’ from less
involved observers, see Johnson 1995; Finkle and McIntosh 1995; Hodgson and
Wattkins 1997.
2 See Habermas 1998a, for an extensive treatment of the relation between facts and
norms in his model of deliberative democracy.
3 For analyses of the role of knowledge in international policy making, see Haas 1990;
Haas 1992; Litfin 1994.
4 For a good discussion of the notion of social engineering in the decades following
World War II, see Wagner et al. 1991; Wagner 1994; Ezrahi 1990.
5 Kingsley Davis, the second main contributor to the theory of demographic transition,
noted in an article in Foreign Affairs in 1958 that the US government should address
population growth in the context of the fight against communism (Davis 1958: 296).
When President Johnson sought support in Congress for international population assis-
tance in 1966, Hodgson reports that he did so on the grounds that high population
growth in the developing world ‘challenges our own security’ (Hodgson 1988: 549).
6 In the case of the World Bank and USAID, this relates to their offices of population.
7 Interview with Joan Dunlop, 10 May 2000.
8 Barbara Crane (1993) notes in her analysis of international population institutions:
‘The Population Council … has probably been the single most important supporter
of policy and program research’ (380).
9 Interview with Adrienne Germain, 10 August 2000.
10 Ibid.
11 Interview with Joan Dunlop, 10 May 2000.
12 Focusing on the efforts of Northern, primarily American, advocates does not imply
that there were not similar networks of like-minded actors in Africa, Asia and Latin
America. Germain had developed some of the basic ideas of proposing a reproduc-
tive health approach together with Sandra Kabir, who had set up in Kenya in the
1980s a health clinic that was sensitive to the demands of women in the region.
Policy stories and knowledge-based regimes 71
Similarly, the CEPIA network in Latin America played a crucial role in contributing
to the formulation and advancement of the policy story of reproductive health, both
in this period and through the ICPD. Interviews with A. Germain, 10 August 2000; J.
Dunlop, 10 May 2000; A. Kabir, 30 August 2000.
13 Interview with Med Bouzidi, 5 April 2000.
14 Women’s Environmental and Development Organization.
15 Transcript of remarks by Vice President Al Gore, National Press Club, Washington
DC, 25 August 2000.
16 Executive summary of S. Forman and R. Gosh (1999) ‘The Reproductive Health
Approach to Population and Development’, at http: //www.nyu.edu/pages/cic/
projects/pophealth/book_Publish.html#inter.
6 The World Bank and the
environment
Robert Wade
Introduction
No other field of World Bank operations has grown as fast as its environmental
activities. Starting with just five environmental specialists in the mid-1980s, the
Bank employed three hundred a decade later, complete with a vice presidency
for ‘environmentally sustainable development’ (World Bank 1994: 157).
On the surface, the history of the Bank’s environmental activities appears to
be a case of new insights leading an institution rapidly to integrate new objec-
tives and criteria into its operational routines. According to the Bank, the change
is the result of staff and management’s ‘increasing understanding of the rela-
tionship between environmental protection and development’ (Shihata 1995:
184). But its many environmental critics say that the change has been driven
largely by environmental non-governmental organizations (NGOs) mounting
high-pressure campaigns to force the Bank to change its ways.
This chapter tells two stories. One is about the factors that led the Bank to
pay attention to environmental criteria. The other is about the effects of its orga-
nizational structure and incentive system on what it has and has not done to
advance environmental objectives.
The critical meeting was held in the village of Founex, Switzerland in 1971.
This is where the first steps were taken toward the marriage between ‘develop-
ment’ and ‘environment’. In the event, Mahbub ul Haq persuaded the
developing-country delegates that ‘there really was good cause, both then and in
the future, for them to be concerned about these matters’. And the Bank helped
gain their support by agreeing to provide funds to cover any additional costs
directly attributable to its environmental standards. The Founex report became
the basis of the Declaration, Principles, and Recommendations issued by the
Stockholm conference. It was largely drafted inside the World Bank, by Mahbub
ul Haq and his team (Prestre 1989: 83).
At the conference itself, McNamara delivered a keynote address announcing
the first formal commitment to environmental soundness in development from
any of the multilateral development banks. This speech established the World
Bank as the leading agency in dealing with the environmental problems of devel-
oping countries. In addition, the World Bank environmental adviser was a
principal figure in the preparatory work, and senior World Bank official Mahbub
ul Haq was the key person in persuading the developing countries not to
withdraw.
reports between 1974 and 1985, only one had a separate section on the Bank’s
environmental work. Why? The answer has to do with McNamara’s under-
standing, a change in the US role, and the wishes of borrowing countries, the
inclinations of staff, and the nature of the environmental debate.
McNamara himself, though committed to minimizing the environmental
damage caused by Bank projects, thought that the Bank could do what was
needed with a minor initiative, worthy of no more than occasional advertising.
He drew a contrast with the poverty work. ‘We saw the direct attack on absolute
poverty as very complex. We did not see the requirement of avoiding significant
environmental damage as very complex. This reflected a lack of understanding
on our part.’3
At the start of the 1970s the US government had taken a leadership role in
multilateral environmental issues, but then it suddenly retreated. This move coin-
cided with a wider sputtering-out of its leadership across the whole of the UN
system as it became preoccupied with the 1973 oil crisis ( Jacobson and Kay 1979).
Developing countries (especially big and important ones such as India and
Brazil) reasserted their doubts about the Bank’s role. This reflected their
disagreement with the North’s pressure for environmental protection measures at
the expense, as they saw it, of economic growth.
Inside the Bank a large majority of the staff was also sceptical about
McNamara’s idea of subjecting Bank projects to scrutiny by self-styled ‘environ-
mentalist specialists’ using different standards from their own ‘good professional
practice’. And like the developing countries, they equated ‘environmental’ prob-
lems largely with pollution (rather than, say, deforestation, desertification, or soil
erosion), and saw pollution as a problem connected with affluence and therefore
one that developing countries could afford to ignore.
In response to the burgeoning environmental movement, mainstream
economists, political conservatives and industrialists in the West began to
harbour anti-environmental sentiments. Some commentators portrayed the envi-
ronmental movement as a Trojan horse for socialism. Much of what the World
Bank said about the environment in the several years after Stockholm seemed
intent on demolishing the idea of limits to growth. Little effort was made to set
out a more positive agenda based on analysis of the environmental problems of
developing countries (Haq 1972).
In short, the Bank’s borrowers and most of its staff were sceptical about intro-
ducing explicit environmental considerations and self-styled environmental
professionals. The Stockholm conference provided them with an excuse: it set up
a new UN agency, the United Nations Environmental Programme (UNEP), to
carry forward the Stockholm agenda. Its members could now say: let the Bank
take care of development, let UNEP take care of environment.
Suspension of disbursements
At the working levels alarm bells continued to ring. A nine-member mid-term
review mission went out in November 1984 and presented its report in late
February 1985. The report documented at length the many failings.6 Soon after
the mid-term review was presented in March 1985, the decision was made to
suspend disbursements until a ‘Corrective Action Program’ could be agreed
upon and certain specific measures taken for Amerindian protection.
Then came two changes in the larger context. First, the Bank was hit with
intense public criticism over what US and Brazilian environmental groups
were calling the Polonoroeste ‘debacle’. The NGOs were demanding suspen-
sion, and powerful figures in the US Congress were insisting that the United
States cut its contributions to the Bank. Second, Brazil’s first civilian govern-
ment in twenty years had just taken office and accepted the suspension as an
indictment of its predecessors rather than itself. Five months later, in August
1985, when the Brazilian government presented to the Bank an action plan to
deal with the problems, and showed evidence that the settlers had been
removed from the recently invaded Indian reserve, the Bank resumed
disbursements.
After 1985
In the period from 1985 to the effective end of the Polonoroeste project in 1989,
the Brazilian government somewhat strengthened the implementing capacities of
the state agencies, roughly demarcated most of the reserves, and provided some
of the infrastructure of the settlement projects. Gradually the government on the
ground began to make some progress in doing some of the things it had agreed
to do years before.
Yet the OED study found that ‘Polonoroeste appears to have been largely
unable to implement and/or sustain many of its environmental protection
measures or to avoid the continuing invasion of reserve areas by loggers,
prospectors, and spontaneous settlers’ (World Bank 1992: 108). In retrospect,
the outcome could hardly have been different. It was not just that the Bank
and Brazil had few data on such fundamentals as soils and their distribution. It
was, more basically still, that the Bank hardly addressed the question of the
ability and willingness of the federal and territorial agencies to do what the
plans required them to do. The Bank’s desire to lend to Brazil and at the same
time show the world how to conduct rain forest settlement well, coupled with
its general avoidance of political analysis, led the relevant people to make
The World Bank and the environment 79
largest share of voting rights in the Bank. They would publicize a small
number of large projects against which it would be easy to mobilize opposi-
tion. Using these few projects as levers, they would build pressure on member
governments to move the Bank, through the executive directors, to institute
environmental reforms.
Then they persuaded the chairman of a House committee dealing with inter-
national development issues to hold hearings before going to legislation. The
hearings would generate useful publicity. Referring to the Polonoroeste project in
northwest Brazil, the witnesses argued that had the Bank not helped to finance
the 1,500-kilometre highway, considerably fewer colonists would have come into
the area and the environmental and social damage would have been much less.
In the end, the House sub-committee issued nineteen recommendations, concen-
trating on actions that could be monitored by Congress and the public, in
December 1984. The Treasury agreed with most of the recommendations, and
assigned a full-time staff member in its Office of Multilateral Banks to monitor
the environmental aspects of multilateral bank loan proposals.
This caused a firestorm of criticism across the Bank. Many people said that it
entered ‘political’ territory that the Bank had no business to be in.
When the EA draft reached the President’s Council in late August 1989,
another hot issue came up. When should the EA be released to the executive
directors, and to others? Senior Vice-President Stern reported that US Treasury
Secretary Nicholas F. Brady had recently sent a letter to the Bank asking for
substantial advance notice – for the EA to be delivered to the US executive
director well before the project came to the Board. Stern also reported that
The World Bank and the environment 85
NGOs were pressing hard for the EA to be disclosed long before the project
design was set.
Some twenty-six drafts later, the final OD was ready by the time of the
Annual Meetings of 1989.18 The vice-president for central operations, the
director of the Environment Department, and members of the writing team
gave a presentation to an invited audience of some 300 government officials.
They later did the same at a meeting of a hundred or more NGO representa-
tives and others.
The NGOs were disgruntled, however, because they had not been consulted at
any point in the drafting of the OD, and for reasons to do with the Narmada
campaign (explained later in this chapter) were especially powerful at this time. In
response, the Bank committed itself to an early revision to take account of NGO
reactions. The revised version, OD 4.01, October 1991, said: ‘The purpose of EA
is to ensure that the development options under consideration are environmentally
sound and sustainable.’ This made clearer than had the earlier version that
‘sustainability’ was not a value to be traded off in an economic analysis. Rather, it
implied that all the options under consideration should meet sustainability criteria.
By the late 1980s the Bank came under a second wave of attack for its environ-
mental and social record, this time mounted by an international coalition of NGOs
and eventually joined by several “rich countries” governments. What sparked this
second attack were the Narmada projects in northwest India. This time the Bank
was pressured to go further in integrating environmental and social criteria into its
lending and advice, in the direction of the ‘environmental management’ paradigm.
situation. Scudder was ‘appalled’ by what he found.19 Nothing had been done to
inform villagers about resettlement options and rehabilitation packages.
In 1987 a resettlement mission went out to see what progress had been made
in the meantime. It found that those villagers who had already been moved to
make way for the dam were still languishing in resettlement villages on sterile
land without even rudimentary infrastructure. On its return the mission recom-
mended that the Bank threaten India with cancellation for non-compliance with
the resettlement agreement.20
At the Board approval meeting in 1985, only one executive director worried
about potential environmental problems. The staff replied, ‘although a full
environmental impact assessment had not been completed, a comprehensive first-
stage assessment had been conducted by the University of Baroda and then
examined by members of the World Bank appraisal team’. This ‘comprehen-
sive first-stage assessment’ was a short, general document dating from the early
1980s, which could not remotely qualify as an environmental assessment. By
describing it as ‘first-stage’ the staff covered themselves; and by reporting only
the finding that there were no endangered species in the area, the staff gave
the impression that the environmental situation was better than it was.
By 1990 everyone was at everyone else’s throat. The India Department
blamed the Asia RED, the environment people blamed the project people, Bank
staff blamed the Indians, the central government blamed the states, the states
blamed the central government, and everyone blamed the Bank.
External pressure
Meanwhile, a local NGO had come to prominence in the Narmada Valley, later
called the Narmada Bachao Andolan (NBA), translated as Save the Narmada
Movement. The NBA by 1987 had linked up with the US-based Environmental
Defence Fund (EDF). There, a new recruit, Lori Udall, took up the Narmada cause
full-time, encouraged by EDF’s seasoned Bank campaigner, Bruce Rich. Instead of
pushing for better resettlement it launched a ‘Stop the Dam’ campaign. To many
international NGOs, Stop the Dam was more attractive than Better Resettlement.
Udall coordinated the international campaign in the period from 1988 to
1992. First, she identified groups within the more important Part I countries that
might support an anti-Narmada/anti-Bank campaign. Second, she prepared
menus of actions they might take in the circumstances of their own countries:
parliamentary or congressional hearings, public fora, press conferences, lobbying
key officials, and letter-writing campaigns. She especially encouraged them to
contact their country’s executive director and to go to legislators. Third, she
prepared information packs for them, drawing on materials sent by NBA and
other Indian activists.
In 1989 the US-based NGOs in the campaign persuaded a congressional sub-
committee to hold hearings specifically on Narmada. These hearings mark a
watershed in the international criticism of the Bank. Thereafter the interna-
tional anti-Narmada/anti-Bank campaign took off.
The World Bank and the environment 87
The Bank’s management said: ‘A decision by the Bank not to get involved
could well mean that the project in question will still proceed but under much
less favourable circumstances’.24 It did not say, though this was in its mind, that
cancellation would have severe consequences for the Bank’s reputation as an
infrastructure lender in India and elsewhere.
At the Board meeting a prominent Part I country executive director asked the
key question: had the ‘relevant authorities’ agreed to the benchmarks (meaning,
had the state governments agreed)? The management said yes. On the strength
of this assurance, the executive director voted with the Part II countries, tipping
the balance in favour of continuing subject to review against benchmarks six
months later. The majority ‘wished to give the benefit of the doubt to the new
Government of India [at the federal level] and to acknowledge the recent efforts
made by the Indian authorities’.25
At the end of March 1993, the Board was scheduled to decide whether to
continue. The South Asia vice-president, Joseph Wood, who had resisted suspen-
sion or cancellation since taking charge in 1991, became persuaded there was no
alternative to cancellation. The government of India and the government of
Gujarat attitude was: ‘Damn the NGOs, we are not going to submit to cry-
babies, we will continue to build the dam.’ They did not wish to accommodate
the Bank’s attempts to respond to world outrage. In the end, President Preston
informed the prime minister that Narmada was jeopardizing IDA, which would
hurt India. The vice-president for South Asia told the Indian government:
‘Either we cancel or you tell us you will not submit requests for disbursements.’
A few days before the Board meeting, the government of India announced
that it would not ask the Bank for more disbursements. The central government
was not unhappy to cancel. The project was generating too many headaches,
and the benefits of Bank involvement went largely to Gujarat, not to the centre.
In private, Indian officials said that what the Bank had been doing was ‘not in
keeping with the country’s self-respect’ (National Herald 1993). The NBA then
succeeded in getting the Supreme Court to halt dam construction at the begin-
ning of 1995, until resettlement was carried out in line with India’s and the
Bank’s policies.
Why Narmada?
Narmada became a focal point for NGO activity because it had several charac-
teristics that lent itself to the NGOs’ general opposition to the World Bank: it
involved the forced displacement of large numbers of people, many of whom
could be presented as sympathy-deserving ‘tribals’; forced relocation could
support a radical campaign to stop the dam; local opposition was well organized,
led by a charismatic figure (Patkar); the international campaign benefited from
unusually energetic and tenacious organizers (in particular Udall and EDF);
some Bank staff members and Bank consultants were severe critics of the way
the project was being implemented, and could help the external critics with
information; and the local opposition to Narmada began to reach a crescendo
The World Bank and the environment 89
around 1986, just as Polonoroeste was losing its appeal to the NGOs. Finally,
location in India also helped, because international NGOs had good access to
English-language information and because India’s democratic polity and free
press allowed opposition.
What did make Narmada unusual was its timing, which put it in a set of
‘hinge’ projects. It was prepared, appraised, and approved at about the same
time that the Bank introduced quite new directives on ‘non-economic’ criteria –
resettlement and environment. The operational people, including South Asia
Vice-President David Hopper, stoutly resisted these ‘non-economic’ criteria and
directives inside the Bank. Their resistance, combined with ambiguity about the
status of ‘directives’ (as analogous to national laws or as guidelines for what
would be nice to achieve), allowed the project people to continue to prepare the
project as they had prepared projects before the resettlement and environmental
directives were introduced.
they proposed that the Congress redirect its IDA money to other organizations
that were more accountable and democratic than the Bank, should it not carry
out the two reforms by June 1994 (Udall 1998).28
The accountability campaign focused on the sub-committee of the US
Congress in charge of authorizing US contributions to IDA. The chairman of the
sub-committee, Representative Barney Frank, informed Ernest Stern in private
that the Bank had a simple choice: either it adopted an acceptable information
policy and independent appeals panel, or it got no US money for IDA 10. The
Bank took the threat seriously. It secretly sent drafts of the new information policy
and a resolution creating an independent ‘inspection panel’ to Frank and his sub-
committee for comments, before presenting them formally to the Board.
The new information policy approved by the Board in August 1993 fell short
of what the NGOs and Frank were demanding, though it also represented a
substantial change from the old policy.29 The Board also approved a resolution
creating an independent inspection panel in September 1993 (World Bank 1993;
Shihata 1994). This, too, fell well short of what the NGOs had envisioned. Its
basic principles of operation as approved by the Board gave it much less inde-
pendence than had the independent review for Sardar Sarovar. Nevertheless, the
creation of the inspection panel did represent a major departure from previous
practice, and its existence owed much to the precedent of the independent
review for Sardar Sarovar.
Critics of the panel, including many Bank managers, also said that the panel
discouraged staff from seeking imaginative and risky solutions and caused
management to steer away from projects that were inherently difficult to ‘panel-
proof ’, such as dams. It imparted a legalistic thrust to Bank work, eclipsing
substance (as in the injunction: ‘Make your projects panel-proof ’), and strength-
ening an existing tendency toward ‘OD absolutism’, with ODs being interpreted
by outsiders as legally binding, like the laws of nation-states. As the drive to
codify procedures intensified in the late 1980s and early 1990s, task managers
complained of being ‘OD’ed [overdosed] on ODs’. A study of ODs covering
Bank projects showed that as of 1992 they specified a total of about 200 sepa-
rate tasks for task managers to carry out, and ODs then in the pipeline were
expected to double that number.30
Conclusion
The history of the Bank’s attempts to come to grips with the ‘environment’ can
be read as a great battle over values, attitudes and images. As in religious wars,
the (environmental) facts have often ended up as relatively unimportant details
compared with the symbols and postures and the struggle for power. Yet there are
no ‘objective’ standards of value and no consensus about causal relationships.
In principle, all Bank work should now be assessed for its effects on economic
growth, poverty reduction and environmental sustainability. The change has
consisted of a paradigmatic shift from ‘frontier economics’ before 1987, to ‘envi-
ronmental protection’ up to the early 1990s, and on to the more comprehensive
92 Robert Wade
tlement) standards. Do these standards create such a cost burden that they signif-
icantly impair the Bank’s ability to compete against other sources of funds that
are less stringent (the Japan Import–Export Bank or the regional multilateral
banks, for example)? Should the standards be varied by country groupings rather
than made uniform for all? The Bank’s environmental critics have tended to
forget that it is, at base, a lending institution; its ability to carry out its develop-
ment-within-the-limits-of-sustainability function rests on its ability to lend, and
hence on finding governments willing to pay its prices.
The Bank has moved from Old Testament harshness (‘environment versus
growth’) to New Testament reconciliation (‘environmentally sustainable develop-
ment’). But it has yet to engage in an open internal debate about what it should
be doing in the environment field, a debate in which the sort of questions raised
in this chapter can be tackled – and disagreements honestly aired – with a view
to finding answers that command some consensus and are operationally mean-
ingful. This would be difficult, however, without reforming the command and
control style of management and introducing ways to evaluate staff by the effec-
tiveness of their projects more than by their reliability in moving them to the
Board. Failing some change in the system of internal incentives, there is a
danger that New Testament reconciliation may remain at the level of images
and values and bring little improvement to what happens on the ground.
Notes
1 The following draws on Colby (1989).
2 Mahbub ul Haq had been secretary for planning in Pakistan. At this time he had just
joined the Bank as a senior economic adviser, recruited directly by McNamara.
3 McNamara, interview with the author, 20 February 1995.
4 See The Ecologist 15 (1–2): 1995.
5 The World Bank did not make any estimates of the effects of the highway on migra-
tion, nor did it work out alternative scenarios based on different migration
assumptions.
6 World Bank, mid-term review, internal memorandum of 25 February 1985, cited in
World Bank (1992).
7 David Knox, who became vice-president for Latin America in time for the mid-term
review of Polonoroeste, interview with the author, 15 May 1995.
8 This is not literally true. The Bank had long had contact with foundations such as
Ford and Rockefeller, drawing on their expertise in policy making and in particular
projects. It also established an NGO–World Bank Committee in 1982. It was window
dressing, without significance, until the late 1980s, when it began to include southern
NGOs and more radical northern ones (such as Development Gap).
9 The Green Party had been active in mobilizing opposition to Polonoroeste in
Germany.
10 Robert Gonzalez Cofino, chief, Brazil Division, to Bruce Rich, NRDC, 7 November
1984.
11 Letter, Senator Robert Kasten to A.W. Clausen, 24 January 1985.
12 A.W. Clausen to Senator Robert Kasten, 1 March 1985.
13 IBRD, Articles of Agreement, Article III, Section 2.
14 See Interaction Newsletter (February 1986) published by the Global Tomorrow Coalition.
15 Written by Bruce Rich and Steve Swartzman.
94 Robert Wade
16 His admission upset members of the Polonoroeste project team, who continued to
think that the project was much better than it would have been without the Bank.
17 This was a common perception, yet operational staff would also agree that quite a
number of individuals in the department, name by name, were exceptionally able.
18 ‘Environmental Assessments’ is formally presented as ‘Annex A’ to OD 4.00; the OD
itself was then unwritten.
19 Thayer Scudder, interview with the author, 3 November 1995.
20 Formally, the recommendation was for suspension followed by cancellation, since
Bank procedures require that suspension precede cancellation.
21 This was four days after the World Bank rose from Rio as the key agency to implement
‘Agenda 21’, an informal intergovernmental agreement on global environmental
priorities and actions. A draft had been discussed over two days in May by a group of
eleven staff and three panel members.
22 Known as the Cox Mission, after its leader, Pamela Cox, a member of the India
Department who had not previously worked on Narmada.
23 Bradford Morse and Thomas Berger to Lewis Preston, 13 October 1992.
24 The quotation comes from the first draft of the Bank’s management’s response to the
independent review, dated 23 June 1992, p. 12.
25 Chairman’s summary, ‘India: Sardar Sarovar Projects’, executive directors’ meeting,
23 October 1992.
26 Lant Pritchett, interview with the author, 10 December 1996.
27 Andrew Steer, interview with the author, 28 October 1994.
28 See also the testimony of Barbara Bramble on behalf of the National Wildlife
Federation, and the testimony of Lori Udall on behalf of Environmental Defence
Fund, before the Sub-committee on International Development, Trade, Finance and
Monetary Policy on 5 May 1993.
29 See ‘Bank Procedures, Disclosure of Operational Information’, BP 17.50, September
1993.
30 Critics of the panel also say that it is a vehicle for a small number of Washington-
based NGOs to gain funding and prominence by initiating and preparing cases to go
to the panel. The Centre for International Environmental Law, linked to the
American University in Washington DC, has been especially active in this way.
7 Sustainable development
and the World Trade
Organization
Morten Bøås and Jonas Vevatne
Introduction
The World Trade Organization (WTO) was established on 1 January 1995, as
part of the final agreements of the Uruguay Round negotiations. The establish-
ment of the WTO is one of the most significant moments in the recent history of
multilateral institutions, because ‘its establishment provides a sister institution for
the Bretton Woods pairing of the International Monetary Fund (IMF) and the
World Bank some 50 years after their creation’ (O’Brien et al. 2000: 68).1 In the
predecessor to WTO, the General Agreement on Tariffs and Trade (GATT), no
explicit reference was made to the environment.2 GATT’s first experience with
environmental issues came when the GATT Secretariat was asked to report to the
UN Conference on the Human Environment (UNCHE) in Stockholm in 1972. GATT’s
report, International Pollution Control and International Trade, was a strong reflection of
the dominant free-trade paradigm in GATT (Nordström and Vaughan 1999).
The basis of GATT’s approach to trade and environment was that trade had to
be protected from environmental measures and not the other way around (Lund-
Thomsen 1999: 51). As a follow-up to this report, it was decided that GATT
should establish a Working Group on Environmental Measures and International Trade
(EMIT). This group was supposed to review all kinds of trade-related aspects of
measures for pollution abatement and preservation of the human environment
(Nordström and Vaughan 1999). However, this group existed only on paper. The
GATT did not adopt the notion of environment in its work and EMIT did not
meet until November 1991. In fact, in almost all other comparable multilateral
institutions, the idea of sustainable development was already firmly established by
the time the idea was finally also taken up by GATT/WTO.
Already in the 1980s, the World Bank and other multilateral institutions were
strongly challenged on environmental grounds by international environmental
NGOs (see Chapter 6). GATT, however, did not receive much attention from
these organizations. GATT was therefore able to continue the Uruguay Round
without making any reference to sustainable development in the negotiations.3
The reason for this, we suggest, was mainly the low level of public awareness of
both GATT and the environmental impact of international trade. The low level
of public attention and the non-existence of formal relations between GATT
96 Morten Bøås and Jonas Vevatne
and civil society organizations left GATT out of the public eye, and, therefore,
there was hardly any pressure at all on GATT to address environmental issues.
The traditional, technical and juridical approach to international trade (law)
could therefore prevail. However, in the early 1990s GATT’s lack of concern for
environmental issues came under fire from two sides. The European Free Trade
Area (EFTA) countries, and in particular the Nordic countries, started a process
at the Brussels Ministerial Meeting in December 1990 with the aim of bringing
the work of the World Commission on Environment and Development (WCED)
into GATT; and in the United States, the outcome of the Tuna–Dolphin
Dispute between the United States and Mexico raised public awareness of both
the trade–environment nexus in general, and in particular about the position
and role of GATT within this nexus.4
The objective of this chapter is thus to explore GATT and WTO’s encounter
with the environment and sustainable development. More precisely, the major
task is to explain why it took so long before GATT/WTO adopted the idea of
sustainable development. In order to accomplish this task, we will build our
exploration around a package of assumptions presented below. These will be
analysed in the remaining parts of this chapter.
The argument
Our first assumption is that there are very few multilateral institutions in which
the neoliberal orthodoxy is more dominant than in GATT/WTO. Our argu-
ment is that this has made it difficult for the organization to adjust to
perspectives that potentially are different/diverging. The WTO Secretariat is not
only strongly influenced by neoliberalism; it also adopts a highly technical
approach to international trade. Our point is that new ideas do not enter an
institutional vacuum. ‘They are inserted into a political space already occupied
by historically formed ideologies. Whether or not consolidation occurs often
depends on the degree to which the new model fits with existing ideologies of
important economic and social groups’ (Sikkink 1991: 2).
This implies that the meaning of a new idea is derived largely from the polit-
ical and ideological context of the institution it is absorbed by. We define the
institutional identity of WTO staff members in terms of neoliberalism and tech-
nicality, and argue that staff members’ institutional identity and loyalty was
strengthened when they suddenly (and for them rather surprisingly) were
confronted with strong criticism from the NGOs. The environmental criticism of
the NGOs challenged the very foundation of WTO, namely its free trade theory;
and when confronted with this criticism, staff members closed ranks around the
WTO and its core ideas.
WTO inherited from GATT not only the dominance of neoliberalism and a
technical approach to international trade, but also a tradition of secrecy and lack
of transparency. GATT/WTO’s organizational routines and procedures for
formal relations with civil society are therefore not much developed, and staff
members can isolate themselves from new impulses and competing worldviews
Sustainable development and the WTO 97
and perspectives. This may help to explain the shock felt by WTO staff
members when they witnessed the events in Seattle in 1999.
These three assumptions constitute the major basis for the following analysis
of sustainable development and WTO. Before we turn to these tasks, it is neces-
sary to briefly revisit the events that led to the inclusion of this idea in the
Marrakech Declaration that established the WTO.
The environmental NGOs were instrumental in the last stages of the Uruguay
Round. The United States in particular was pressured by strong national environ-
mental NGOs. The result was that the United States demanded that a clear
reference to sustainable development be made and that a committee on trade and
environment be established. If not, the US argued that the strong domestic envi-
ronmental opposition that the government was faced with would make it
impossible for it to secure a majority in Congress for the ratification of the Uruguay
Round Agreement. From the last negotiation meeting in December 1993 to April
1994, when the agreement was signed in Marrakech, the United States prepared
the ground for a separate statement on trade and environment and for a direct
reference to sustainable development in the preamble of the agreement that estab-
lished the WTO. In the Final Act of the Uruguay Round (April 1994) sustainable
development was therefore included in the rules of the international trade regime
through the so-called Marrakech Ministerial Decision on Trade and Environment,
and at the Marrakech Ministerial Meeting a reference to sustainable development
was agreed upon and included in the preamble of the new organization:
allowing for the optimal use of the world’s resources in accordance with the
objective of sustainable development, seeking both to protect and preserve
the environment and to enhance the means for doing so consistent with [the
parties’] respective needs and concerns at different levels of economic devel-
opment.
(WTO 1994)
had no standing operating procedures for relations with civil society organiza-
tions, and the institution had little awareness of how important the
trade–environment nexus was becoming in the eyes of not only the NGOs, but
also large segments of the population in important member countries.
Thus, when the idea of a world trade organization was placed on the agenda
in the latter part of the Uruguay Round, the increased scope, permanence and
rule-making authority of the proposed organization alarmed environmentalists
and other civil society actors. The suggestion that authority over vital national
decisions was about to be transferred from the nation-state to a supranational
organization shrouded in secrecy was an idea many civil society organizations
found alarming (O’Brien et al. 2000: 136). Their main concern was precisely that
during GATT’s history, the institution had failed completely to establish any
formal linkages with NGOs or other civil society organizations. Conditions for
consultations with NGOs had been clarified in article 87 (2) of the Havana
Charter. However, the failure to establish ITO made the preliminary GATT last
for forty-seven years, and the culture of secrecy in the multilateral trade negotia-
tions that evolved effectively kept NGOs and civil society organizations outside.
The argument from the NGOs was that access to information and participation
was not only vital for democracy, but would also improve the policy outputs of
the WTO.
The WTO was forced to take some of these issues seriously. Article v.2 of the
Agreement establishing the WTO institutionalizes some standard operating
procedures for consultation with NGOs: ‘the General Council may make appro-
priate arrangements for consultation and co-operation with non-governmental
organizations concerned with matters related to those of the WTO’. And it was
also suggested that NGOs could be consulted through the dispute settlement
mechanism (DSU). Article 13.2 of the DSU states that: ‘Panels may seek infor-
mation from any relevant source and may consult experts to obtain their opinion
on certain aspects of the matter.’ In July 1996, the secretariat was also empow-
ered to engage directly with NGOs (WTO 1996a). The Secretariat was therefore
now given the responsibility for liaison with NGOs. In the same year, the
General Council of WTO also agreed to declassify documents that previously
had been kept from the public (WTO 1996b).
The more reform-oriented of the NGOs are aware that the nature of trade
negotiations means that open-access for all civil society organizations is not
possible. However, they have argued strongly that membership of the WTO
Committee on Trade and Environment (CTE) should be enlarged to include
NGOs. They have criticized the DSU for not making more use of independent
experts. And on the issue of transparency they have focused on the existing
arrangements for declassification of WTO documents. In their view, the current
practice of keeping documents restricted until six months after being issued is
seriously handicapping civil society’s ability to monitor the WTO. The WTO on
the other hand is mostly concerned with what the organization sees as the ever-
present threat of the forces of protectionism, and will therefore not encourage
the involvement of what it sees as potentially protectionist groups.
102 Morten Bøås and Jonas Vevatne
Institutional identity
Each multilateral institution has its own identity, and we will argue that the insti-
tutional identity of the WTO is formed around an organizational culture of
neoliberal trade theory, a technical approach to trade issues and a culture of
secrecy. There is clearly both an internal and an external side to an organiza-
tion’s identity, and for us it is clear that ‘the response of the WTO to the
environmentalist challenge has been shaped by its organizational ideology, orga-
nizational characteristic and the ability of environmental NGOs to threaten its
core objective of trade liberalisation’ (O’Brien et al. 2000: 141).
The way WTO met its critics in the NGO movement should be interpreted in
light of the Secretariat’s identification with the core of free trade theory. The
lack of knowledge among WTO staff members about environmental issues and
their links to international trade issues is one important reason why the environ-
mental challenge was interpreted within a traditional free trade versus
protectionism context. The environmental challenge was beyond their knowl-
edge frame, and the response was therefore to treat it as a threat. The basic point
is that ‘knowledge is produced within a frame of reference that embeds certain
cognitive interests’ (Nustad and Sending 2000: 60), and the meeting between
trade and environment was, if not a clash of paradigms and cultures, at least a
clash between different types of knowledge. The vision, language, strategies,
procedures and traditions of the environment movement are fundamentally
different from those of the free traders of the WTO. The very different
approach, measures and vision that the environmental NGOs promoted had few
if any tangible points in common with the trade regime of the WTO.
1996 (Nordström and Vaughan 1999). The process in the CTE has primarily
been driven by the member states, but the WTO Secretariat also has contributed
to some reports and statements. According to Esty (1997: 15): ‘The debates to
date have been dominated by trade officials with little contribution from an envi-
ronmental perspective.’ The CTE is therefore perceived by the NGOs as being
biased toward the protection of free trade and not towards environmental
protection and sustainable development.
CTE’s first report to the WTO Ministerial in Singapore in December 1996
was considered a disappointment by the NGOs: the CTE had not been able to
clarify central issues such as the status of Multilateral Environmental
Agreements (MEAs) in relation to international trade law and the issue of eco-
labelling. A new attempt was made by the CTE to respond to environmental
criticism prior to the Seattle Ministerial. This new report discussed the
trade–environment nexus, and in particular it addressed the so-called ‘race-to-
the-bottom debate’. The general conclusion of the report was that trade
liberalization reinforces the need for environmental cooperation. Apart from this
conclusion, however, the report is more than anything a manifestation of the
kinds of values that are embedded in the WTO. The study on which the conclu-
sion is built is significantly influenced by the assumption that trade always leads
to greater prosperity and improved environmental conditions. This assumption is
arrived at via the environmental Kuznets curve hypothesis. The problem for the
WTO with this kind of argument is that the environmental Kuznets curve is not
only disputed among academics, but to most NGOs it also illustrates an econo-
metric neoliberal worldview.
The argument from the majority of the NGO movement was therefore that
not only has the CTE failed to make any progress on the trade–environment
nexus, but it has also threatened the existing consensus by seeking to enlarge
WTO’s jurisdiction. In one interpretation of CTE’s activities, it is suggested that
trade measures agreed in multilateral environmental agreements could be taken
before a WTO Dispute Panel. In other words, WTO members could try to use
the dispute settlement mechanism in the WTO to undermine already existing
agreements on trade and environment (O’Brien et al. 2000). This perception led
the NGOs to shift their attention towards the WTO’s dispute settlement system.
Conclusion
The WTO has adopted the concept of sustainable development, but only into its
preamble, not into its trade rules. The main reasons for this are the WTO
Secretariat’s technical approach to international trade and the ideological hege-
mony of neoliberal free trade theory in the WTO. This has influenced its
interpretation of non-trade concerns, such as sustainable development. In addi-
tion, we would draw attention to the fact that WTO employees’ institutional
identity was strengthened when confronted with the environmental NGOs’ criti-
cism because this criticism challenged the organization’s foundation: free trade
theory. Confronted with this external critique, the employees’ loyalty to the
WTO and its core idea increased. Related to this is the fact that the organiza-
tion’s lack of procedures for formal relations to civil society made WTO
employees isolated from new impulses and competing views in the broader polit-
ical economy.
An important insight to be gained from this case study is therefore that for an
idea such as sustainable development to make a significant impact on an organi-
zation like the WTO, that idea and its promoters cannot be seen as contradicting
106 Morten Bøås and Jonas Vevatne
the hegemonic knowledge system and the collective identity formed around this
knowledge system. The main reason why the idea of sustainable development,
which has had a lasting impact on other multilateral institutions, has failed to do
so in the case of the WTO is precisely because the whole idea and its promoters
were seen as in opposition to the raison d’être of the whole organization, namely to
be the guardian of free trade.
Notes
1 The roots of the WTO can be traced back to December 1945 when the United
States invited fourteen countries to begin negotiations on liberalizing world trade.
The negotiations had two objectives: (1) to create an International Trade
Organization (ITO) that would facilitate trading relations as the World Bank and the
IMF facilitated monetary relations; (2) to implement as soon as possible an agreement
to reduce tariff levels. The second exercise resulted in the GATT, which was signed
on 30 October 1947. The idea was that once ITO was completed the GATT would
be subsumed in the larger organization. However, the US Congress refused to give its
agreement to the ITO. In fact, congressional opinion was so strong against the ITO
that in December 1950 the US administration dropped the initiative and asked
Congress to continue giving its support to the GATT.
2 The only reference to the environment in the GATT rules is GATT Article XX:
general exception; (b) ‘necessary to protect human, animal or plant life or health’
and (g) ‘relating to the conservation of exhaustible natural resources if such
measures are made effective in conjunction with restrictions on domestic production
or consumption’.
3 The agenda for the Uruguay Round was agreed upon in Punta del Este, Uruguay in
December 1986. The report of the WCED was launched four months later. In the
report of WCED both development and environment preservation are emphasized
and the report tries to strike a balance between them. The concept of sustainable
development was not new, but the WCED gave it a new and broader definition than
the former more narrow environmental interpretation of the concept. The WCED
underscored solidarity both within and between generations, by defining sustainable
development as the ability ‘to meet the needs of the present without compromising
the ability of future generations to meet their own’ (WCED 1987: 43).
4 The root of the Tuna–Dolphin Dispute is the US Marine Mammal Protection Act
(P.L. 92–5222, 86 Stat. 1027), enacted in 1972. This law requires the US government
to take steps to curtail the incidental killing of marine mammals by commercial fish-
ermen, both domestic and foreign. Specifically, this law instructs the secretary of
commerce to prohibit the importation of tuna products from countries whose dolphin
kill ratio (dolphin deaths per net dropped) exceeds that of US fishermen beyond a
certain margin. In 1988, Earth Island Institute, a California-based NGO, sued to
enforce this law, and a federal judge agreed that the US government was failing to
uphold the law and ordered Mexican tuna imports banned from the United States.
Mexico then asked for a GATT dispute settlement panel to adjudicate the matter. In
September 1991, the panel concluded that the United States was in violation of its
GATT obligations. This decision provoked heated debate over the fairness of GATT
resolutions of trade and environment conflicts. For further details see Esty (1994).
5 Authors’ translation from the Norwegian.
6 The only important exception is the European Bank for Reconstruction and
Development. This MDB was established after the end of the Cold War with the
objective of transforming the former planned economies of Eastern Europe into
market economies.
Sustainable development and the WTO 107
7 Personal interview with Risa Schwarz (WTO’s Trade and Environment Division), 13
October 1999.
8 Personal correspondence with Bernard Kuiten (External Relations Officer, WTO), 27
April 2000.
9 It is only states that participate during the year-long negotiation rounds, with little or
no participation from the parliaments and often with limited public debate, too. Only
parties to the Convention (states) are allowed to submit objections/papers to the
dispute settlement mechanism. WTO does not accept, as other international institu-
tions do, that non-state actors file complaints or submit amicus briefs to denounce or
allege a failure (ICTSD 1999). Despite the Appellate Body’s opening for amicus briefs
from non-state actors, the practice was again limited in the Asbestos Dispute (see
Bridges 2000a: 1).
8 Social capital and the World
Bank
Desmond McNeill
Introduction
The idea of social capital has been very actively promoted by the World Bank
in recent years, and in this chapter I am concerned specifically with how and
why this came about; and with the tensions, contradictions – and perhaps reso-
lutions – that result from seeking to apply it in development policy. The
concept, as presented by the political scientist Robert Putnam in his book
Making Democracy Work: Civic Traditions in Modern Italy (Putnam 1993a), became
astonishingly popular among academics and the wider reading public, at least
in the United States, in the space of a very short time in the late 1990s.1 Why
this enormous appeal? One reason, which many have noted, is that the
concept – and the main thesis of Putnam’s book – appeals to a perhaps
nostalgic view of community, and values which are in danger of being lost in
the modern world. But Putnam also offers a hard-headed argument in favour
of such values: that they actually encourage economic growth. The concept of
social capital helps one to believe that community, trust and shared values are
‘a good thing’ – as demonstrated by Putnam’s comparison between the very
different economic fortunes of Northern and Southern Italy. And academics
with widely differing perspectives find it appealing. As one reviewer puts it: ‘He
[Putnam] has interpreted his results in such catholic terms that students of
cultural interpretation and public choice – who differ in so many ways – can
find common ground in the outcome’ (Tarrow 1996: 396).
Although it was the political scientist Putnam who hit the headlines, sociolo-
gists – notably Coleman and Bourdieu – played a major part in establishing the
concept of social capital within their discipline.2 It has in recent years been
applied in a number of different fields, including the study of management.
Within development studies, the concept and the argument fit very well with
current debates among researchers and development assistance agencies
concerning ‘governance’, ‘democracy’, ‘civil society’ and related issues: debates
that badly need a strong empirical and theoretical base.
The first World Bank Working Paper on the subject refers to three alternative
definitions, of which:
Social capital and the World Bank 109
A second and broader concept of social capital was put forth by Coleman (1988)
who defines social capital as ‘a variety of different entities, with two elements in
common: they all consist of some aspect of social structure, and they facilitate
certain actions of actors – whether personal or corporate actors – within the struc-
ture’. In fact, this view of social capital captures social structure at large, as well as
the ensemble of norms governing interpersonal behaviour. A third and most
encompassing view of social capital includes the social and political environment
that shapes social structure and enables norms to develop (World Bank 1998b: 1).
This third and broadest definition, I suggest, appears to include almost
anything, and certainly extends social capital well into the domain of gover-
nance. This becomes clear in the World Bank Working Paper by Knack, ‘Social
Capital, Growth and Poverty: A Survey of Cross-country Evidence’:
In keeping with the scope of the World Bank’s Social Capital Initiative, it is
defined broadly here to include features of both government and civil
society that facilitate collective action for the mutual benefit of a group,
where ‘groups’ may be as small as households or as large as a nation.
(Knack 1999: 1)
The analysis in this chapter will be structured in relation to these three points.
But I will preface this with a few words about the World Bank, which may help
to explain its interest in the idea of social capital.
110 Desmond McNeill
There has, in recent years, been an increasing recognition, in the World Bank
– and more generally among development assistance agencies – of the impor-
tance of community participation. This is manifested in, or at least related to, an
increasing involvement of ‘civil society’ – often, in practice, taken as synonymous
with non-governmental organizations (NGOs) – both in the planning and imple-
mentation of projects in the field, and in consultation processes at headquarters.
Also related is the increasing number of anthropologists and sociologists working
for the Bank, and organizational changes, which have given greater prominence
to social issues (Cernea 1994). There has also been a significant shift within the
Bank towards the inclusion of political issues, notably through the Bank’s work
on ‘governance’. These changes have given greater recognition to the need for
insights from disciplines such as sociology and political science.
The World Bank has always had an ambition – one which it has generally
been rather successful at achieving – to be at the forefront of ideas; if not initi-
ating them, then at least rapidly taking them over (Ranis 1997; Stern and
Ferreira 1997). The discipline and language, of economics has for many years
been dominant within the World Bank, and especially in its Research
Department. New ideas must, therefore, in order to be accepted, survive criti-
cism by this particular discipline.3 The reason why the concept of social capital
is so attractive for the World Bank is that it allows the dominant economic
perspective to take into account sociological and political considerations which
have increasingly been recognized as important.4 The concept fits well at the
interface between economics and sociology – in the so-called ‘new institutional
economics’.5 Thanks to the work of Putnam, Coleman, and others, staff in the
World Bank could thus adopt a new term which was at the forefront of both
academic and popular debate; not only within the disciplines of sociology and
political science but – most important (for the Bank) – perhaps also in
economics. It is therefore understandable that research-minded Bank staff had
an a priori interest in the idea.6 This was a necessary condition for its success, but
hardly sufficient. The rapid progress of the idea required its being actively taken
up by those that count.
Who decides what ideas are to be taken up in the Bank? This is a complex
question to which I shall return below, which relates to the ethos of the Bank as a
whole, and what constitutes the reference group or groups of individual staff
members. As in any organization, certain key individuals play an important role,
and in this case several seem to have played a part in giving the idea of social
capital prominence in the Bank.7 Edwards (1999: 2) gives the credit to the
President, James Wolfensohn, and Joe Stiglitz, Chief Economist and Senior
Vice-President. The former has certainly shown a special interest in participation
and involvement of NGOs, which created a supportive context; while the latter,
who has a very high reputation for his work on the economics of information
and institutions, has also helped to legitimize the concept. But a very important
role was undoubtedly played by Ismail Serageldin, formerly Vice-President,
Sustainable Development, who has had a keen interest not only in the environ-
ment, but also in the social dimension of development – as evidenced from his
Social capital and the World Bank 111
writings on ‘culture and development’ and the ‘ESD triangle’ which combines
the economic, the environmental and the social perspectives (Serageldin and
Steer 1994).
External actors have also played a significant part – at the invitation of key
individuals within the Bank. Mancur Olson was actively involved at an early
stage, before his untimely death. Others participated in workshops and other
events where World Bank staff and academia were in dialogue.8 Putnam was
brought in and participated in the Social Capital Initiative (SCI) of the Bank,
including giving a high-profile public lecture at the 1999 conference.
According to Collier, ‘Putnam was the most important. … You can get any old
fad going, but to be sustainable it must have a core of rigour to it. That comes
from the academic side’ (personal communication, 1999). Neither Olson nor
Putnam is an economist, but – in what may be seen as an important tactical
move – a number of very prestigious economists, including Nobel Prize
winners Arrow and Solow, were invited to informal meetings at the World
Bank to discuss the concept.9 It was of crucial importance that senior
economists within or close to the World Bank should take it seriously. But opin-
ions among influential figures in the Bank apparently differed. One regarded
the empirical results claimed as ‘terribly contrived’; while another felt that
there was a ‘pot of gold’ here.
In addition to enlisting the interest, and in some cases support, of prestigious
economists, Serageldin was also active in obtaining external funding – from
Norway and Denmark – for the two research programmes on social capital
described below.10 Serageldin’s definition of social capital is broad: ‘the institu-
tional and cultural basis for a society to function’ (Serageldin 1996: 1888). Like
others, he saw it as a natural addition to earlier types of capital – but in his case
linked expressly to the concept of sustainable development. As he put it in the
foreword to SCI Working Paper 1: ‘The traditional composition of natural
capital, physical or produced capital, and human capital needs to be broadened
to include social capital’ (World Bank 1998b: i).
In brief, a conjuncture of key individuals and structural factors may be said to
have played their part in causing the concept of social capital to achieve such
rapid prominence in the Bank. The two major research programmes on social
capital which I shall describe may be seen as both a symptom and also a contrib-
utory factor.
The conference
The World Bank recently completed two major research programmes on social
capital: one financed by Norway, the other by Denmark. Norway supported a set
of three major studies – in Indonesia, Burkina Faso and Bolivia: the Local Level
Institutions (LLI) Project.11 The preliminary results from these three studies were
presented at a small workshop in Bergen in May 1999 attended by about thirty
participants, approximately one third of whom had been involved in the
research itself. Denmark supported a larger number (twelve) of smaller studies –
112 Desmond McNeill
• researcher – economist
• researcher – social scientist13
• policy staff – economist
• policy staff – social scientist
• operational staff
I have claimed that the concept of social capital may serve to bridge three
different ‘gaps’, and I shall structure my discussion of the issues by focusing on
these three in turn, offering in each case a brief analysis of the issue and some
symptoms of the tensions. But first I will give a little more background informa-
tion about the conference itself. Here I quote one of those who had been heavily
involved in the research programmes:
The Social Capital Initiative (SCI) was established three years ago at the
initiative of Ismail Serageldin (then Vice-President, Environmentally and
Socially Sustainable Development). The purpose was to understand it,
measure it, and monitor its effect on development. There was much scepti-
cism, in view of which he saw the need to set up a research programme …
to demonstrate [its importance] empirically in a rigorous way. Support was
received from Denmark to finance 12 teams in 15 countries. The studies
were multidisciplinary, involving economics, sociology, anthropology, polit-
ical science and other disciplines. They ranged from quantitative to
qualitative studies, and entered uncharted territory.
(policy staff – economist)
Another staff member, also very closely involved, expressed support for the
concept and the research:
At long last, having used the word in numerous meetings, I can find out
what it means. [There has been an] evolution of thinking in the Bank: from
financial capital to physical capital, and then human capital. Now we need
to add natural capital and social capital. I think it is a very profound concept
and one that we absolutely have to come to grips with. … Fascinating pieces
of work, really at the cutting edge, which could have a profound impact on
the way we do our work at the Bank.
Complexity/simplicity
While policy makers and operational staff favour simple (‘common sense’) analysis
and approaches, researchers revel in complexity. As I have argued elsewhere, this
arises from the very nature of their differing tasks, and the imperatives that drive
them.
This gap was very evident at the conference, in the comments and discussion.
For example, one of the comments on a paper was that it offered ‘commonsen-
sical conclusions’. The commentator (operational staff) asked whether ‘all this
wonderfully complex [analysis] was needed’ (This evoked laughter from the
audience).
In response it was claimed: ‘The insights are commonsensical – but common-
sense is not always evident in development thinking. Perhaps social capital can be
a bridge between community needs and development theory. To bring common-
sense into the mindset of development work’ (researcher – social scientist).
114 Desmond McNeill
Importance/non-importance of definitions
Academic social scientists, and perhaps especially economists, tend to be very
concerned about definitions, and may devote enormous effort to competing
alternatives. Policy makers often see this as a waste of time: ‘academic’ in the
pejorative sense of the word. At the conference there was some reference to this
issue. One of those presenting the findings of their research: ‘We did not have a
clear idea of what was meant by social capital, beyond a sense of cohesion
leading to reduced transaction costs’. And another (policy staff – social scientist):
‘Which definitions are most useful? – those which lead to what is fruitful in oper-
ational terms.’ On the question of definition: ‘It is all right if we [economists and
sociologists] do not talk to each other’ (researcher – economist). And: ‘We need a
refutable concept, relatively crisp.’
Here it is relevant to quote SCI Working Paper 1:
On a good day in my old job at the World Bank, I would be asked to define
‘civil society’ by any number of sceptical colleagues. … On a bad day they
would ask me … ‘what is social capital?’ But worst of all was the inevitable
sequel: in that case, what’s the difference between social capital and civil
society? Before I’d reached the end of my first paragraph of long-winded
explanation, the questioner would have disappeared around the corner,
back to the ‘real work’ of lending billions of dollars to recalcitrant govern-
ments. … In the World Bank, as in all bureaucracies, this year’s theory will
be next year’s policy.
(Edwards 2000)
Once everyone realized that market failures are the rule rather than the
exception and that governments are neither smart enough nor good enough
to make things entirely right, the social capital rage was bound to happen.
Conservatives love it. … Those to the left of center are no less enchanted.
(Bowles 1999)
Social capital and the World Bank 117
For the concept to get a hold it has to be pushed out into the other sectors of
the Bank and operationalized [with] indicators and measurement [leading
to] mainstreaming in the World Bank, and other agencies.
(operational staff)
surely be to ‘build social capital’, to those who wondered whether the lesson
might be very different – that an understanding of social capital should induce
the Bank to restrict its activities – or at least to modify the form of its interven-
tions. There was, in other words, a disagreement between those who sought to
intervene or not intervene.
The three ‘gaps’ just described constitute a challenge both for the institution
and each person within it. The actions of the World Bank are the outcome of
many actions of many individuals. In determining what attitude to take to a
new concept such as social capital, individuals within the World Bank ask
themselves not only ‘Will this concept lead to better policies?’ but also ‘Will
this be good for my institution?’, and further, perhaps, ‘Will this be good for
my department?’. And ‘good for me?’. In asking the last of these questions,
each person necessarily relates to a peer group, or perhaps more than one peer
group – for example of other staff within the same division and of academic
economists. Under normal circumstances, the boundaries and distinguishing
features of the different peer groups are fairly clear, though a person’s place-
ment within them may be less so. Thus each individual has a rather clear map
of the territory, but may either feel that they move within it, or are not entirely
sure where they fit. This then raises the question of who defines the territory,
who marks the boundaries, who guards the boundaries, etc. There is a consid-
erable literature on this subject within the social sciences, though I shall not
attempt to explore it further here. I do, however, suggest that the boundaries in
the Bank have been challenged and perhaps redefined in the debate over the
concept of social capital. But what has happened to the idea of social capital
in the process?
It is apparent that it has been required to satisfy a wide range of largely
conflicting purposes. It is my contention that this is both its strength and its
weakness. To the extent that it provides a substantive bridge across these
different gaps it is commendable. But if this bridge is illusory; if consensus is
achieved only because the concept means all things to all people, then it has little
value.
The term social capital featured quite significantly in the World Bank’s
controversial World Development Report 2000/2001 on poverty, and before
concluding this chapter it is worth commenting briefly on this document, which
illustrates the continuing tensions, and to what extent these were reconciled in
the World Bank’s annual flagship document.
The poor typically have a plentiful supply of bonding social capital, a modest
endowment of bridging social capital, and almost no linking social capital.
(World Bank 2000a: 4.4)
This claim may be true by definition (depending on how you define ‘bonding’,
‘bridging’ and ‘linking’ social capital). But it has not been shown empirically, and
its speculative nature is indicated by the give-away qualifier ‘typically’. The final
version is certainly more circumspect on this point (World Bank 2000b: 128).
Turning from analysis and description to policy, it is interesting to contrast the
following two quotations, again from the draft:
To reduce poverty and empower the poor the key issue is to find ways of
creating synergies between civic and state institutions and between formal
and informal institutions.
(World Bank 2000a: 4.9)
The first is an economistic, and technocratic way of presenting the issue; indeed,
a rather extreme example. The second is less so, but not particularly specific. A
third quotation, by contrast, indicates the potential dangers of intervention,
giving grounds for a cautious approach:
were markedly differing views as to what the World Bank should make of the
concept. But in the final version the term itself is used far less, and the differ-
ences of view are barely apparent.22
Conclusion
It is not my purpose in this paper to prescribe, or even forecast, the fate of social
capital in the World Bank, but this case study of an ‘idea’ and a development
agency provides valuable insights into the inner workings of a single, powerful,
multilateral institution. Between, and also within, development assistance agen-
cies there is a degree of competition; but the contests are fought within a
consensual arena, in that the explicit aim is common for all: namely better poli-
cies. Each institution (and perhaps especially the World Bank) seeks to lead the
rest of the development community in ‘the right direction’; to be first with the
good ideas.23 And social capital appeared to be such an idea. I suggest that the
concept of social capital is potent. It is seen as having power in two respects: not
only to steer policies in a good direction, but also the power to give authority – to
an individual and/or an institution (or part of an institution).
This case study is interesting because the World Bank here took a leading,
decisive role in promoting an idea which might, on the face of it, appear to be
risky in both academic and policy terms. It was risky in academic terms because
– at least within economics – it had yet to be tried and proved worthy. It was
risky in policy terms because it drew the World Bank further into the morass of
politics at the micro level. To push the point further, and develop the analogy of
Collier, I suggest that the Bank actively intervened in the marketplace of ideas – in what
turned out to be a hazardous venture.24
But then the question arises: who is the World Bank? Who was promoting the
idea? I have named some of those involved – such as Stiglitz and Serageldin –
and it seems that Wolfensohn himself was important; not perhaps in relation to
the concept of social capital itself, but in creating a supportive environment for
such ideas. And this helps to explain why others in the World Bank who might
have been expected to be not simply sceptical but actively opposed have not
been so; because the ethos of the World Bank is, perhaps, itself in flux – thanks
in part to the efforts of its president. Staff of the World Bank also have – under
normal circumstances – a fairly clear idea of what I might call the ‘ethos’ of the
institution as a whole, and of the different groups that they feel they belong to;
that is, their shared norms and values (whether explicit or implicit). But the
World Bank has, in recent years, been in a state of uncertainty, and perhaps
significant change. Under the leadership of Wolfensohn, it has presented itself
not only as a ‘leader in ideas’ but also as a ‘listening bank’. And it appears to be
listening to some ideas which, for the World Bank, are quite novel. Does this
imply a change of a very fundamental kind in the World Bank ethos, relating to
what might be referred to as the deep ideology of the Bank?25 Or are these
merely surface changes? As I have sought to demonstrate, there are very diverse
attitudes to the concept of social capital. It is accurate to state that the World
Social capital and the World Bank 121
Notes
1 The study ‘caused a sensation outside academic circles’ (Tarrow 1996). The idea
apparently even inspired a passage in Clinton’s State of the Union address in 1995.
2 Not in collaboration; they adopt rather different approaches.
3 Economists may not be in the majority in numerical terms, but the dominance of
economic thinking is well established. The following comment by the Director of the
Economics Research Group is very pertinent:
4 This view is implied, though not necessarily shared, by Grootaert (an economist) who
states in SCI Working Paper 3:
The term social capital has found its way into economic analysis only recently.
Some social scientists claim that the term social capital has been coined only to
make the underlying concepts acceptable to economics. Economists reply that
institutions and other aspects of social capital have always been present in
economic analysis. Economists have added the focus on the contribution of
social capital to economic growth.
(Grootaert 1998)
122 Desmond McNeill
5 This is closely linked to rational choice theory in sociology (e.g. Coleman). Whether it
fits the ‘old’ institutional economics of Polanyi (1944) and Veblen (1953 [1899]) is
more doubtful.
6 By calling them ‘research-minded’ I deliberately blur the issue as to whether this refers
to where they work in the organization (e.g. the Research Department), what are their
current tasks (e.g. writing working papers), or what they are most interested in.
7 I have not included here those who have been most directly involved in the research
programmes I shall describe – notably Gloria Davis (anthropologist), Deepa Narayan
(sociologist) and Chris Grootaert (economist).
8 For example, the sociologist Norman Uphoff (Esman and Uphoff 1984), who was
invited to a session at the rural development conference on George Washington
campus in 1995, chaired by Ismail Serageldin; and later attended the 1997 workshop
and the 1999 World Bank conference. The World Bank also maintained an email
discussion group on social capital – ‘Let’s Talk’ – for over two years (Deepa Narayan,
Let’s Talk posting no. 25, 10 Feb 2000, 07.12). Michael Woolcock acted as moderator
for the year 1999.
9 This initiative led to the publication of a book by Dasgupta and Serageldin (2000)
including contributions by several of the figures that I have referred to. Many are
positive, but both Arrow and Solow express considerable doubts about the use of the
term ‘social capital’ to refer to the phenomenon under study.
10 I was informed that these two programmes account for some 80 per cent of the work
undertaken on social capital in the Bank.
11 This involved large-scale household surveys in the three countries, which provided
strong empirical evidence, expressed in econometric terms, of the positive economic
contribution of social capital. (The research was initially planned without the concept
of social capital, as a study of local institutions.)
12 I have used the classification system partly to provide anonymity, but have named
individuals where I believe their formal position warrants it.
13 It is a debatable point whether these should properly be classified as ‘other social
scientist’. As Collier noted in a revealing comment on the place of economics in the
World Bank, there is a ‘very interesting usage in the Bank. They use social scientists to
mean non-economists. I was fazed by it!’ (personal communication, 1999).
14 It is relevant to add another quote, this time from one of the local researchers on the
Burkina Faso (LLI) study, at the earlier workshop in May 1999, who characterized the
World Bank as ‘a cumbersome, cold machine. … Not qualified to work at the local
level. … Knows how to deal with big things, not little things’, but added: ‘We are
delighted to have the concept of social capital.’
15 In a brief but interesting paper Edwards distinguishes three groups: ‘the enthusiasts
(mainly economists in the World Bank’s research division). … The tacticians (mostly
other social scientists in various parts of the Bank) … the sceptics (activists and
academics outside the Bank and a few iconoclasts within)’ (2000: 3).
16 An extreme (and perhaps intentionally provocative) example: ‘Putnam had a neat
idea, but it should not become a cult. If you cannot measure it, it is very unlikely
anyone is going to do anything about it’ (operational staff).
17 But see McNeill (1999b) and Becher (1989).
18 A World Bank Staff member suggested that with social capital one might achieve
‘Integration of quantitative and qualitative. … Precision vs. meaningfulness. … Social
capital as heuristic, not analytic’. Here may be an appropriate place to note that the
study in Tanzania, ‘Cents and Sociability’ (Narayan and Pritchett 1997) which played
a significant part in establishing the credibility of social capital within the World
Bank, was written jointly by a sociologist and an economist. The latter’s reputation as
a reliable econometrician was apparently very important.
19 It is not unusual for economists (who favour quantification) to claim that they apply a
greater degree of rigour than, say, anthropologists. But anthropologists might argue
Social capital and the World Bank 123
that their discipline, although not employing quantitative methods, is more demanding
in relation to the empirical basis of its research, and rigorous concern for context and
local meanings.
20 There are similarities here with other earlier ‘ideas’. The informal sector seemed to
provide a bridge in the ‘redistribution vs. growth’ debate; and ‘sustainable develop-
ment’ a bridge in the ‘growth vs. sustainability’ debate.
21 The term appears twice or more on every page from 4.2 to 4.10 in the draft. In the
final version, it appears fewer times – and then mainly in ‘boxes’.
22 The World Bank should, in my view, be highly commended for making the draft
publicly available. It gives not only an opportunity for readers to comment, but also
an invaluable insight into the debates as they unfold.
23 This has become even more apparent recently, notably with the World Bank’s initia-
tive to take a leading role in the ‘Global Knowledge Network’.
24 See also e.g. Colander and Coats (1993).
25 This ‘deep ideology’ is difficult to describe, but an important aspect is an emphasis on
results and a rejection of approaches which are ‘soft’. (As the latter word exemplifies,
the language of the World Bank is revealing. Other expressions which are commonly
used include ‘touchy-feely’, ‘gooey’ and ‘flabby’.)
26 I must here again stress the distance between the researchers and policy makers in
Washington and the operational staff in the field. Even if major changes occur in
relation to the former, these may not reach to the latter.
9 Hegemony, neoliberal ‘good
governance’ and the
International Monetary Fund
A Gramscian perspective
Ian Taylor
Introduction
The promotion of ‘good governance’, as advanced by international institutions
such as the International Monetary Fund (IMF), is a powerful example of how
certain ideas are constructed as common sense. In this analysis, good governance is
seen as a hegemonic discourse pursued by the North in an attempt to define the
South in its own image. A form of transformation, akin to a passive revolution,
seeks to co-opt and assimilate elites within the South into a broader transnational
historic bloc, sharing the assumptions and class interests of the dominant fractions
centred in the core. Such ongoing impulses contribute to the reconfiguration of the
South in an epoch of global restructuring. Crafting consent to such favoured solu-
tions, this process is integral to a neo-Gramscian understanding of the role of
international institutions in global politics. This being so, the promotion of ‘good
governance’ reflects the potent role of ideas in international politics and the part
played by multilateral institutions in such endeavours.
Currently, ideas surrounding the economic and political principles referred to
as ‘neoliberalism’ are immensely powerful. Amongst a transnational elite class
they have achieved hegemonic status on how best to restructure political and
economic life. Although technological innovation and changes in production
root much of this in the material realm, the importance of ideas is quite
apparent when attempting to understand how neoliberalism is currently domi-
nant. This is particularly so in trying to understand how these ideas are
propagated by international financial institutions.
It is this chapter’s contention that ideas centred around notions of what consti-
tutes ‘good governance’ have been promoted by the IMF as an ultimate attempt to
reconfigure territories in order to make them most attractive to international
capital. Michel Camdessus, former head of the IMF, was quite open about this,
asserting in 1998 that ‘in a world in which private capital has become more
mobile, there is mounting evidence that corruption undermines the confidence of
the most serious investors and adversely affects private capital inflows’. He also
made claims to a consensus over what such good governance was, saying that ‘a
broader consensus has emerged on the central importance of transparency and
good governance in achieving economic success’ (Camdessus 1998). Indeed, the
Hegemony, ‘good governance’ and the IMF 125
IMF’s own prescriptions for designing ‘good governance’ structures draw upon
what the body refers to as ‘broadly agreed best international practices of
economic management’ (IMF 1997a).
Currently, many of those state elites perceived to stand in the way of restruc-
turing and who flout the IMF’s concept of good governance, stand to lose out,
with loans from the body being withheld; the withholding of $53 million in aid to
Zimbabwe by the IMF in August 1998, after Mugabe’s government failed to meet
the organization’s demand for good governance, being a prime example.
Obviously, in discussing such issues one is not siding with tyrants such as Mugabe,
nor arguing for poor governance. However, it is important to make the link between
the recent emphasis on good governance within the IMF and how this informs its
lending policies, and the wider neoliberal agenda that ‘good governance’ advances.
The theoretical insights provided by neo-Gramscian scholars, particularly vis-à-vis
the role of ideas and the notion of hegemony, are utilized as a point of departure.
Hegemony derives from the ways of doing and thinking of the dominant
social strata of the dominant state or states insofar as these ways of doing
and thinking have inspired emulation or acquired the acquiescence of the
dominant social strata of other states. These social practices and the ideolo-
gies that explain and legitimize them constitute the foundation of the
hegemonic order. Hegemony frames thought and thereby circumscribes
action.
the rules and practices and ideologies of a hegemonic order conform to the
interests of the dominant power while having the appearance [italics added] of
a universal natural order of things which give at least a certain measure of
satisfaction and security to lesser powers.
(Cox 1989: 825)
126 Ian Taylor
the regulative effect of international organizations (Gale 1998: 274). The actors
in this process are the dominant elites at the centre, who extend their conception
of social and political order to the international and transnational level by
exporting their preferred societal model through international institutions. These
institutions then act as socializing agents of change, helping to draw in partners
who share a particular worldview. Local elites come to share in the social values
of the dominant core elite, as such interests consolidate their own class position
at home.
In the current world order, with its shift from the Keynesian compromise to
neoliberalism, there has been a
many of the adjustment packages [of the IMF] are thought to have gone
beyond traditional structural reform strategies, designed not only to restore
stability to the regional financial markets and to reform banking sectors, but
actually to contest the nature of the political process.
(Higgott 2000: 259)
a clear bias towards the assumption that it is free market governments with
sound macro-economic policies which are more reliable. … There is also a clear
inclination to emphasise, or even equate good governance with the technical
qualities of efficient management and the main accountability of client
governments to funders/creditors and other external agencies.
(Keet 2000)
The International Monetary Fund (IMF), and the World Bank, were origi-
nally formed at Bretton Woods in 1945 as twin pillars in the post-war capitalist
dispensation (see Helleiner 1994). The World Bank’s role was to promote post-
war reconstruction, whilst the IMF was conceived as the protector of the
capitalist global economy, promoting international trade and regulating national
exchange rates. The value of cooperating currencies was secured to the dollar
whilst the American bank of issue promised to exchange dollars for gold.
Concurrently, dealing in currencies was regulated by official exchange controls,
thus fostering currency stability and allowing states to effectively plan their
economies. In addition to this surveillance role, however, the IMF also took on
providing short-term financing to states experiencing currency problems and/or
failing to satisfy their trade obligations. It is important to note here that the insti-
tution’s role then was to provide temporary liquidity to existing economies,
rather than trying to restructure them.
A more limited role for the IMF was very much in line with the ideological
underpinnings of the post-war capitalist world order, whereby various Keynesian
welfare nationalist schemes established a tacit consensus by which the system was
managed (Marglin and Schor 1990). During a period of unprecedented stability
and growth, the ideas and institutions that fostered this order remained essen-
tially harmonious and acted to bind together a strong working alliance between
the elites in Washington, the NATO states, and Tokyo – a trilateral cooperation.
This alliance emanated from the core state, the United States, and can be seen as
an international historic bloc, which in turn cemented the post-war international
economic order that became known as Pax Americana (Gill 1990a: 97).
However, dependent as it was on American largesse, this order began to
unravel once Washington sought to stem the growing negative effects on its
economy brought about by a decline in productivity growth and its competi-
tiveness. Furthermore, an increasingly transnationalized capital began to see
such restrictions as a dampening device on their profitability and ‘freedom’,
and began pushing for a re-negotiation of the post-war consensus. Nixon’s
suspension of the convertibility of the dollar into gold and the setting of
exchange rates based on market valuations, plus the imposition of import
surcharges by Washington, rapidly forced an adaptation by the rest of the capi-
talist trading states. As a result, the world monetary system relied on a dollar
(not gold) standard. An inflationary macro-economic policy served to share the
costs of America’s expensive adventurism in Vietnam, achieved through a
devaluation of the dollar and a depreciation of external dollar-denominated
holdings.
Hegemony, ‘good governance’ and the IMF 129
This has been done with grave consequences: the IMF, staffed with macro
economists, does not have the expertise to provide the kind of advice that it
is dispensing today. Nor is the IMF, which has no independent evaluation
unit and has been labelled one of the most secretive public institutions in the
world, held accountable for the policy advice that it gives.
(Welch 1998)
formidable since, in the aftermath of the debt crisis, all other potential sources of
credit, bilateral or otherwise, required an IMF stamp of approval … before any
credit was extended’ (Adams 1997: 162). Developing countries increasingly
required the IMF’s approval in order to secure new aid flows in order to help avoid
defaulting on outstanding loans. Obviously, this gave the IMF an amount of influ-
ence over the economic policies of debt-ridden administrations. State
administrations were repeatedly ‘advised’ that economic recovery was dependent
upon what was vaguely termed ‘business confidence’, and that this in itself hung
on a disciplined labour force and a state that pursued ‘good governance’.
Such advice has been part and parcel of the Structural Adjustment Facility
(SAF) and Enhanced Structural Adjustment Facility (ESAF) loan programmes of
the institution. The conditions attached to such loans can include the disman-
tling of labour regulations, increasing foreign investment incentives, and
privatization schemes. Yet such conditionalities and negotiations between the
IMF and the host state frequently present what are essentially the interest of
particular fractions, both national and international, as being in the interests of
the wider populace. Concessions, such as the (limited) advancement of what are
termed ‘social issues’ allow the IMF and the negotiating state parties to pass off
conditionalities as being concerned with protecting the poorest. O’Brien et al.
(2000: 178) remark that such interventions allow the IMF to cast general interests
as paramount, thus strengthening the legitimacy of IMF prescriptions and main-
taining political support for them. One such tactic is to stress ‘ownership’ of IMF
prescriptions by implementing states and to portray IMF strictures as being
voluntarily followed by administrations pursuing the general interest:
[M]anagement and staff at the IMF have gone some way to accepting the
importance of ownership, at least in so far as it may be an indispensable
ingredient for successful policy implementation. …
That said, the change in rhetoric has not to date always translated into
substantially different behaviour at the Fund. … For the IMF, ‘ownership’
has tended to mean acceptance by the borrowing government and its citi-
zens of Fund prescriptions. As one official has typically put it, ‘we have to
persuade the population that an adjustment package is legitimate’.
(O’Brien et al. 2000: 187)
One way this has been done is for the IMF to move even further beyond its
original mandate of facilitating short-term loans. Previously, it is true that the
institution provided varying degrees of technical advice and assistance, often
with conditionalities attached. However, traditionally the IMF’s main focus was
on encouraging administrations to ‘correct’ macroeconomic imbalances, reduce
inflation, and embark on reforms amenable to the private sector. We can call this
process ‘first stage restructuring’, referring to the package of measures adopted
at the behest of the IFIs to open up domestic markets.
The IMF has increasingly promoted ‘second stage restructuring’ (centred
around the ideas of ‘good governance’), after it became apparent that much of
132 Ian Taylor
the initial restructuring programmes were not working. Pinpointing exactly when
this occurred is problematic, but according to one source,
through 1982, less than 5 per cent of [IMF] upper tranche arrangements
contained more than 11 or more performance criteria [i.e. conditionalities
related to governance]. By the end of the decade, more than two thirds of
such arrangements had 11 or more criteria.
(Kapur and Webb 2000: 2)
It rapidly became apparent that the IMF saw good governance as a corner-
stone in its new reconfigured mission, and that adherence to the ideas not
promoted by the institution was not an option for administrations seeking IMF
largesse. The IMF Director Michel Camdessus went so far as to warn state elites
that ‘every country that hopes to maintain market confidence must come to
terms with the issues associated with good governance’ (IMF 1997b).
These rules of behaviour reflect the second stage of capitalist restructuring that
has already been mentioned, as state elites in the periphery are encouraged to
lock-in the liberalization process by enacting good governance prescriptions that
serve to isolate, and at the same time legitimize, economic reforms along neoliberal
lines. This process is not simply a top-down activity that strips Southern elites of
their agency. Indeed, circumstances may actually mean that liberalization and the
134 Ian Taylor
selling-off of public enterprises may serve the interests of entrenched elites and
their local and international class allies. In this sense, good governance rhetori-
cally advances ‘common sense’ notions of governance by promoting sectional
interests as the common interest and by appearing to be reasonable and beyond
reproach, whilst actually covertly advancing liberalization. The good governance
project is a highly effective strategy. As George and Sabelli remark, ‘being
against good governance is like being against motherhood and apple-pie’, yet the
IFIs’ definition of governance ‘nicely circumvents the issue of politics by
focusing on … the solely economic’ (1994: 150).
According to Gill, the locking-in of reforms and the granting of legitimacy is
at the heart of ideas surrounding new constitutionalism and good governance
issues as propagated by disciplinary international institutions (Gill 1998). Good
governance ideas can be seen as a means to ‘reformulate and redefine the public
sphere and rules for economic policy, according to orthodox market-monetarist
postulates in macroeconomics (fiscal and monetary policy) and microeconomics
(e.g. trade, labour market and industrial policy)’ (ibid.: 30). They serve as the
vanguard in the second stage of neoliberal restructuring, further acting to lock-in
domestic elites, whilst at the same time bolstering the position of those fractions
sympathetic to an increasingly cohesive transnational neoliberal power bloc. It is
this which has been instrumental in efforts to create a mode of international
economic policy coordination which is intended to ensure the coherence and
stability of a new transnational accumulation regime.
Though there is, to be sure, a large degree of top-down coercion involved in
this restructuring process, consensual elements are present, particularly on the
part of the outwardly oriented fractions of capital in states in the periphery, as
well as their elite allies within the state administrations. In this sense, the promo-
tion of good governance can also be seen as an attempt to formulate and
reformulate hegemony at the local level around neoliberal ideas, and is not a
process devoid of agency on the part of Southern elites. Good governance ideas,
as they are currently configured, may be seen as attempts to reconstruct hege-
mony through a reformulation of the mode of political rule: from the unstable
and unpredictable to one that is most attractive to international investors.
Whilst the implementation of structural adjustment programmes may erode
legitimacy in the eyes of some, the turn to ‘clean government’ does help amelio-
rate negative pressures. After all, the state is supposedly operating a tight ship
and cannot be held accountable outright to dislocations that may occur – these
are the ‘natural’ workings of the market! In addition, the involvement of institu-
tions such as the IMF in promoting neoliberal ideas within borrowing states can
also act as a useful alibi to be deployed in defence of administrations that intend
to embark on neoliberal restructuring. As a Bank for International Settlements
report put it, ‘in many countries, explaining monetary policy decisions in terms
of external constraints has been helpful in securing public acceptance’ (Bank for
International Settlements 1992: 124).
Furthermore, by holding administrations accountable to good governance
strictures, institutions such as the IMF also avoid censure and can be actually
Hegemony, ‘good governance’ and the IMF 135
seen as allies of the downtrodden citizen – even whilst the IMF’s very policies
contribute to the further erosion of citizens’ livelihoods. Indeed, by advancing
the classical liberal separation of the political from the economic, good gover-
nance strictures serve to obscure the real problems regarding social and
economic power imbalances that characterize most states. By elevating good
governance prescriptions into legally binding guidelines, and by predicating
further funding on the compliance to such precepts, the IMF and other IFIs
bolster the position of the neoliberal-inclined elites.
Equally important, by advocating good governance, the IMF and other
intervening bodies help build up a considerable and influential support
constituency in civil society. As one analysis framed it, ‘local and foreign
NGOs, the media, religious institutions, chambers of commerce and
employers’ organisations quickly mesh together as a local network of non-
governmental bases of support to meet [the institution’s] objectives’ (Toissaint
1999: 149). This can be seen as part and parcel of ‘a global strategy to
promote Western values and institutionalise political regimes that are likely to
be non-belligerent and generally positive towards the realisation of the [neo-]
liberal paradigm’ (Hyden 1997: 236).
Conclusion
The promotion of certain ideas relating to good governance reflects develop-
ments within global capitalism in the era of globalization and where the
ideology of neoliberalism is hegemonic. Good governance is part of a broader
attempt to legitimize the political authority of liberalizing elite fractions in the
South. These ideas have been advanced by international financial institutions
such as the IMF as part and parcel of the neoliberal order. It is a reflection of
the success of neoliberalism as a hegemonic project that particular ideas of
‘good governance’ now appear to be common sense, if not unquestionable. The
incantations sounded by the organic intellectuals tied to this project whenever
criticism is raised make its almost hallowed status quite clear. Williamson’s
remarks in defence of the consensus give a taste of such reflexes, claiming as he
does, that neoliberalism is the ‘spontaneous, automatic expression of economic
facts’:
Having said this, the promotion by the IMF of good governance ideas must
be contextualized within a broader framework incorporating notions regarding
the power of ideas within international politics. In fact, it is accurate to say that
what the IMF and other disciplinary institutions are promoting is a form of
‘passive revolution’ that seeks to achieve the hegemony of neoliberalism. By
appealing to the rule of law and emphasizing safeguards for market reforms,
notions of governance more specifically related to liberalization, alongside issues
such as corruption, can be covertly ‘smuggled in’ and entrenched at a constitu-
tional and legal level, thereby locking-in administrations to the restructuring
process (Cutler 1999).
In essence, good governance promotion can be seen as an expansion of the
IMF’s mandate into the realms of advocating constitutional and legal safeguards
for transnational capital. In doing so, the harmonization of business practices is
the ultimate aim, but so too is the defence and enlargement of a project in
furtherance of a world-wide restructuring. In doing so, consent in supporting
many of the prescriptions of good governance – a supposedly universal and
‘neutral’ set of values – is equally as important as the more coercive nature of
institutions such as the IMF: ‘Since the ideological formation of hegemony is
necessary for the creation of consent, the reproduction of hegemony is dependent
… upon its ability to operate as a universal language’ (Keyman 1997: 117), so
that different interests belonging to different states are made compatible with one
another. The extent and form of IMF interventions of course fluctuates over
time and space, depending on the balance of class forces within each particular
state. Nonetheless, good governance has become what development and
modernization were two decades ago: a hegemonic discourse that seeks to allow
the North to define the South in its own image. This is not to say that compli-
ance with such governance strictures is automatic, and Southern elites have been
at times quite successful in ducking such prescriptions. But questions over
compliance or non-compliance to a degree miss the point. It is the legitimizing
function that strictures on governance perform, attached as they are to liberal-
izing projects, that makes such projects incredibly powerful. Such prescriptions,
even if ignored by the affected elites, serve to advance the idea that sectional
interests are actually general interests and that restructuring, however unpalat-
able to many on the ground, ‘at least’ brings with it conditionalities that may rein
in the corrupt rapacity of local elites, even if this actually does not happen.
Good governance projects then serve at one level to obscure the actual implica-
tions of neoliberal programmes, whilst dressing them up as good common sense
which may ameliorate the dire economic and political conditions of much of the
South. They act as a means of legitimization and socialization. In this sense, the
promotion of ‘good governance’ notions by bodies such as the IMF reflects the
potent role of ideas in international politics, and the part played by multilateral
institutions in such endeavours.
10 Balancing between East and
West
The Asian Development Bank’s policy
on good governance
Janne Jokinen
Introduction
This chapter looks at the Asian Development Bank’s (ADB) policy document on
good governance, with the purpose of clarifying how its contents were influ-
enced by the political and institutional environments within which it was created.
The analysis begins with a discussion on the factors that led to its creation. The
focus then shifts to the contents of the document: how do they reflect the ideo-
logical and political framework within which the Bank’s management functioned
in the early and mid-1990s when the policy document was drawn up? Two
themes are highlighted: the definition of the proper role of the state in develop-
ment, and the manner in which the policy on good governance is reconciled with
the ‘apolitical’ role of the ADB.
The policy on good governance was adopted because the major Western
donor countries wanted it. They were able to use the negotiations for the replen-
ishment of the Bank’s Ordinary Capital Resources (OCR) and the Asian
Development Fund (ADF) to persuade the opponents of the policy to accept it.
However, the policy was not just a product of the Western donors. Its contents
were influenced by Japan, which was strengthening the policy aspect of its devel-
opment cooperation in the late 1980s. The document was also modified to make
it palatable to the Developing Member Countries (DMCs) and ease its integra-
tion to the ideological framework of the Bank. Consequently, the ADB policy on
good governance differs in some important aspects from similar policies adopted
by other development agencies in the 1990s.
Bank and the International Monetary Fund (IMF), and the East and Southeast
Asian supporters of the ‘Developmental State’ model.2 The intensity of the
debate reached its peak at the same time as the policy document was under
preparation.
The question of what good governance is and how it should be operational-
ized in developing countries became a key bone of contention in the debate, as it
came to signify an extensive package of issues (see Bøås 1998). The Washington
Consensus advocated a limited economic role for the state, while supporters of
the Developmental State model argued for an active one. After the collapse of
the Soviet Union, the linkage to human rights and democracy gained in
emphasis. The relative merits of collective economic and individual political
rights were widely debated, as were those of authoritarian political systems
(‘guided democracy’) and liberal parliamentary democracy.
Japan’s position in the post-Cold War development debate was particularly
interesting because it was so ambivalent. Japan agreed with many of the argu-
ments of the Washington Consensus, but also sympathized with its opponents.
This was understandable, as it was Japan’s own post-Second World War develop-
ment strategy that had been refined into the Developmental State model. All the
main contenders were members of the ADB, and the Bank thus became an
important forum for the debate. Moreover, the ADB was at the time seeking to
broaden its role from that of a project financier to what it called a ‘broad-based
development institution’ (ADB 1998: 20–21). Whether or not the Bank should
promote good governance, and by what means, was closely connected with what
kind of an identity it was going to have in the future.
grounds. Behind the campaign for good governance they tended to see a plot to
keep Asian countries subservient to the West by undermining the strengths on
which their success was based: an active dirigiste state, and the placing of collec-
tive economic rights before individual political rights. The critics referred to
experiences from Africa and Latin America, where World Bank and IMF-
enforced Structural Adjustment Programmes (SAPs) had been applied since the
early 1980s with poor results. These programmes contained the same policy
package that was now offered to Asians (Zakaria 1994; Yasutomo 1995; Root
1996; Gwynne and Kay 1999).
The supporters of the Developmental State model emphasized that the role
of the state was crucial, especially in the initial phases of economic develop-
ment. Technological adaptability and the accumulation of capital would be
promoted by forceful policies, including protectionist ones. Public resources
would be applied pragmatically to search for and implement market-
augmenting and market-accelerating measures in cooperation with the private
sector. Only after domestic corporations, and the society at large, were strong
enough to withstand foreign competition in both home and international
markets would the national economy be gradually opened up (Yasutomo 1995;
Gore 1996). The rapid economic growth that first Japan and then several other
East and Southeast Asian societies had experienced in the 1970s and 1980s
was presented as evidence of the success of the Developmental State model.
Since the end of the 1970s, Japan had greatly increased its Official
Development Assistance (ODA). It had also become the largest creditor in the
world. At the end of the 1980s, Japan’s Asia policy changed. It redirected its
development aid to new recipients as a result of the ‘economic miracles’ that had
taken place in several countries that it had assisted in the past. At the same time,
Japan launched a campaign to match its political influence in international orga-
nizations with its financial contributions to them. A characteristically Japanese
ODA philosophy had to be created to provide a substantive basis for a more
prominent political role (Yasutomo 1995).
In the 1980s, humanitarianism and interdependence had been highlighted as
the rationales for Japan’s development assistance. In the post-Cold War era, the
efforts of aid recipients to strengthen democracy, human rights and the market
economy would be rewarded, while increasing military expenditures, develop-
ment of weapons of mass destruction and arms exports would result in the
reduction or discontinuation of assistance.3 These principles, together with envi-
ronmental concerns, were codified in the ODA Charter adopted in 1992
(Yasutomo 1995).4
Japan’s position in the international development debate became more
prominent at the beginning of the 1990s. At the same time, it moved closer to
the opponents of the Washington Consensus. At the World Bank, Japan ques-
tioned the neoliberal approach to development operationalized in the SAPs, and
sought the role of a mediator between the DMCs and the United States and
other Western donors (Yasutomo 1995).5
140 Janne Jokinen
security alliances in Asia at any cost was no longer felt necessary, and the focus
shifted to opening Asian economies for American exports and investments.
There was less need to channel money to Asian allies through the ADB. The
United States opposed the Fourth General Capital Increase of the Bank’s OCR
(GCI IV) and the Sixth Replenishment of the ADF (ADF VI), which were being
negotiated in the beginning of the 1990s. Japan reacted by redirecting its efforts
to keeping the Americans involved in the ADB, for example by serving as a
mediator between the United States and its opponents the same way as it had
done at the World Bank (Yasutomo 1995).
The ADB itself was undergoing deep-reaching changes in the early 1990s. Its
management was seeking to change the Bank into a ‘broad-based development
institution’, a move supported by many donors but opposed by some DMCs.
The Bank needed new resources from the donors for the replenishment of its
OCR and the ADF. Consequently, it had to adopt their agenda, in which good
governance was a key theme at the time. At the same time, the ADB manage-
ment had to make sure that its new identity would be acceptable to its powerful
DMCs as well.
The same theme was picked up in an important report drawn up by the Task
Force on Improving Project Quality, which was completed in January 1994. The
Task Force stressed the importance of increasing DMC capacity for policy anal-
ysis, formulation and management, as well as strengthening the ‘ownership’ of
projects by executive agencies and potential beneficiaries. The Bank was to
encourage DMC governments to give up tasks that could be handled better by
the private sector (ADB 1994; 1995).
At the same time as the Task Force was winding up its work, the preparation
of the policy document itself was underway. This process was led by Dr Hilton
Root, who served as the Chief Adviser on Governance at the ADB from 1994 to
1997. He had previously worked as a consultant for the World Bank and the
United States Agency for International Development (USAID). Root borrowed
DMC and ADB staff, gathered the views of donors on governance, and
prepared a draft policy document to serve as a basis for discussion (Root 1996).
In April 1995 the ADB organized the Governance and Development
Workshop. It brought together experts who had been involved in drawing up the
development strategies of Hong Kong, Indonesia, Japan, the Republic of Korea,
Singapore and Taiwan. The workshop drew attention to the widespread impres-
sion in Asia that the existing definitions of governance reflected only the
experience and interests of Western countries, and did not take into account
Asian experiences. This despite the fact that in East and Southeast Asia, it had
seemingly been possible to create rapid economic growth through interventionist
industrial policies while maintaining equity and limiting the amount of bureau-
cratic corruption (Root 1996; Bøås 1998).
The participants of the workshop stressed that no standard measurement of
good governance should be adopted because each country had its own political
history, political system, institutional culture and level of development, none of
which could be accredited with a comparative advantage. Many institutional
alternatives permitted sound development management. The key issue was the
capacity to successfully implement economic and social policies. This depended
especially on the capability of state bureaucracy and the effectiveness of the
state/society interface.
The conclusions made at the Governance and Development Workshop were
taken into the policy document on good governance almost ad verbatim, which
made it acceptable to the DMCs (ADB 1995; Root 1996). The document was
brought to the ADB’s board of directors as a Working Paper in May 1995 and
formally adopted by the board the following October (ADB 1995).
interests of domestic with those of foreign investors, and so on. The scales of this
balancing act are not equally weighted, however.
The policy document was drawn up and adopted because the Western donors
wanted it (ADB 1995; Bøås 1998). This is reflected in its contents, where stan-
dard arguments of the Washington Consensus are repeated. The document
concentrates on the role and practices of public authorities. Most reforms either
derive from, or aim at, increasing the role of domestic and foreign private enter-
prise in the national economy. Privatization and the integration of Asian
economies to the global marketplace are important objectives (ADB 1995; Bøås
1998). The overall goal of the policy seems to be to facilitate the transformation
of the institutions and practices of the borrowing DMCs so that they become
compatible with the values and practices of the North American and European
donors. The policy also seeks to make ADB investments in development projects
in the DMCs more cost-effective – a traditional donor concern (ADB 1995).
The objectives of the policy on good governance are clothed in economic
parlance to make it acceptable to DMCs and to reconcile it with the ADB
Charter. It is repeatedly stressed that the ADB is only concerned with ‘sound
development management’ – that is, the efficiency and effectiveness of the insti-
tutional environment within which citizens and corporations interact with their
government agencies and individual officials – and not with governance as
democratization or the strengthening of individual human rights. The document
argues that the Bank is not interested in the specific sets of economic policies
DMC governments are pursuing, let alone their political systems; the Bank’s sole
concern is that those policies have their desired effects (ADB 1995).
As its point of departure, the policy document takes the definition of the term
‘governance’ from Webster’s New Universal Unabridged Dictionary of 1979: ‘the
manner in which power is exercised in the management of a country’s economic
and social resources and development’ (ADB 1995).6 Based on this definition
and a World Bank discussion on the matter,7 the ADB describes governance as
being directly concerned with the management of the development process. It
encompasses the functioning and capability of the public sector, as well as the
rules and institutions that create the framework for the conduct of both public
and private business. Accountability for economic and financial performance,
and regulatory frameworks relating to companies, corporations and partnerships
also fall under the term ‘governance’ (ADB 1995).
The policy document seeks to deflect DMC misgivings by stating that Asian
experiences have shown that there is no direct correlation between the political
environment and rapid economic and social development; democracies have
fared no better than non-democracies in terms of good governance (ADB 1995).
The ideological orthodoxy of the document is confirmed by the argument that,
generally speaking, the market mechanism is to be preferred to state direction:
markets allocate resources more efficiently than governments because the latter
have limited access to information (ADB 1995).
The state can best carry out its tasks by concentrating on guaranteeing a ‘level
playing field’ for private actors. Equity can be safeguarded by maintaining the
144 Janne Jokinen
made clear, however, by simply listing the topics that it deals with: the proper
role of the government in society, the policies that flow from this role, the prin-
ciples according to which state administration should be ordered, and the
ADB’s role in moulding DMC societies according to the model defined in the
policy. Although the document maintains that it is only concerned with ‘sound
development management’, which sounds ‘scientific’ and non-controversial, it
is actually concerned with the way societies organize themselves. The use of
economic parlance, and promises to act only at the request of the DMCs,
appear already in the Bank’s charter. The ADB was created in 1966 to change
(‘develop’) Asian societies, but given the image of a bank, an institution that
was considered to be apolitical by the founding fathers and thus acceptable
even to the newly independent DMCs that were sensitive about their
sovereignty.8
The point of departure adopted by the policy document on good governance
is the definition of governance as the manner in which power is exercised in the
management of a country’s resources and development. However, the political
aspects of governance are immediately discarded. The document does recog-
nize, for example, that making participation more effective may have a positive
impact on democratization or individual political and human rights, but
promises that the Bank will not directly support such goals (ADB 1995).
According to the policy document,
the Bank will steer clear of overtly political goals, such as parliamentary
democracy and human rights (however desirable these may be, for their own
sake). That being said, however, it also needs stressing that, in many ways,
the Bank’s operations are conducive, albeit indirectly, to the pursuit of these
goals (e.g. through wider participation in development activities, raising
living standards, expanding access to public goods and services, women in
development). Hence, though the charter provisions explicitly preclude any
role for the Bank in the political aspects of governance, efforts to enhance
the quality of economic governance in DMCs (i.e. management of
resources for development) could well redound to the benefit of the former.
(ADB 1995: 14)
The ADB policy document focuses on the role of the state, and says little on
good governance practices in the private sector. The reason given is that the
Bank has more experience of dealing with governments and thus more insights
to offer to them than to private corporations (ADB 1995). However, one is
tempted to see also another, ideological motivation for concentrating on the
state. In the neoliberal economic development discourse of the 1980s and the
1990s, the state and public agencies were seen mainly as the problem, obstacles
to development, while the market and private economic actors were believed to
be the solution and agents of development. This view is repeated in the ADB
policy document on several occasions, for example when the proper functions of
the state are discussed (ADB 1995).
The ADB’s policy on good governance 147
Bank has traditionally maintained that it does not subject its lending to political
conditionalities, and has used this argument to ward off pressure from donors,
this has never been strictly true even before the 1990s (Kappagoda 1995).
The concept of ‘economic considerations’ can be quite flexible, as the policy
document on good governance shows. Moreover, the shift in the Bank’s opera-
tional strategy from projects to programmes, sector activities and policy dialogue,
together with the emphasis of its development ideology moving from the devel-
opment of physical infrastructure towards social development, increased its
policy making role in the DMCs. The use of development performance as a
criterion for lending potentially made its influence even more tangible in the
smaller DMCs who are dependent on external assistance.
Conclusion
The ADB was the first multilateral development bank to adopt a policy on good
governance. There are several reasons for this. The Bank was a key forum where
supporters of the Developmental State model and supporters of the Washington
Consensus were present and able to argue their cases. At the beginning of the
1990s the ADB was in need of additional resources. This provided the opportu-
nity for donors to call for the adoption of the policy in return for new
contributions. The DMCs and the Bank’s management were forced to give in
but were able to influence the contents of the policy. In creating the consensus,
the mediating role of Japan was important. The result was the balancing act that
the ADB policy document on good governance represents: terminology
borrowed from the Washington Consensus and neoliberal economics to give the
Western donors what they wanted, but with a redefinition of key concepts, as
well as an emphatic restatement of the ‘apolitical’ role of the Bank to protect the
integrity of its charter.
The way in which the proper role and functions of the state in a developing
country are defined provides an example of one of the balancing acts. The
document does suggest a model that the DMCs are to apply if they wish to
achieve development in the most effective way possible: the one promoted by the
Washington Consensus. However, the document notes the value of Asian experi-
ences and states that each society should find its own solutions to good
governance. Furthermore, it is repeatedly promised that the ADB will not force
reforms on the DMCs, but will act only if and when they want its advice.
This does not change the fact that the policy document provides only one set
of solutions that the ADB is to promote. The real significance of the policy
becomes clear when its role in lending decisions is considered. The DMCs will
be rated according to their success in following the guidelines of the policy, and
those who fail to meet the requirements will have difficulties in getting loans in
the future. For those developing countries that depend on ADB assistance, this is
a powerful inducement to conform.
What, then, is the role that the ADB is playing in the DMCs? The Bank has
always treasured the self-image it has derived from its charter: an impartial, tech-
The ADB’s policy on good governance 149
nical institution working objectively to assist its DMCs in their economic devel-
opment. It lends money to worthy causes but it leaves the social and political
effects of projects to the care of the borrowing governments.
However, as the ADB’s operational environment has changed over the years,
a rift has appeared between its self-image and actual activities. Especially in the
1990s, the Bank has moved to areas generally considered political. The ADB
Charter cannot be changed and the self-image is too valuable to be relinquished.
It has therefore been necessary for the Bank to reinterpret what the ‘economic
considerations’ mentioned in the charter signify.
The ADB undeniably has an important role to play in helping make gover-
nance – both in public and private – sectors more efficient and effective in the
DMCs. During its history, it has accumulated a great deal of experience and
expertise on what development means in various Asian and Pacific contexts.
Moreover, it has had access to talented individuals from both DMCs and donors,
and considerable financial resources at its disposal. It should thus be well suited
for this task. It can carry it out in an ‘Asian’ way, through non-confrontational
consultation, as it has been wont to do in the past. This may be an inefficient
way to do things, but it is still better than dictating ready-made solutions to coun-
tries in dire straits.
The fates of many of the Asian ‘miracle economies’ during the economic
crisis that broke in 1997 highlights the importance of a constructive role. The
crisis was dubbed by the dominant school of economic thought a crisis of gover-
nance: the Asian economies crashed because they were not practising
accountability, participation, the rule of law and transparency in their public
(and private) governance. The crisis was presented as proof that Asian experi-
ences were, at best, misleading. The ADB was eclipsed by the IMF and the
World Bank, which took the lead in providing both financial aid and a stringent
package of reforms to the countries hit by the crisis. The practical effects of the
ADB’s policy on good governance were hidden by the impact of these reforms
and the turmoil that engulfed some of the countries in question.
Critics of the Washington Consensus have seen the Asian economic crisis as a
crisis of the very model of development advocated by Western institutions. If
this is true, the IMF/World Bank-imposed reforms (providing that they have
been implemented) have sown the seeds of future crises. The ADB as a regional
institution has a special responsibility to seek good governance practices that are
suited to local conditions in Asia and the Pacific. After all, it is Asians who should
have ownership of their own development.
Notes
1 For a concise presentation of the ideas typical of the Washington Consensus, see
Standing (2000).
2 For a presentation of the basic tenets of the Asian Development Model, as seen by
the Japanese, see Yasutomo (1995). For an illuminating discussion of the Washington
Consensus vs. Developmental State debate, see Gore (1996).
150 Janne Jokinen
3 Interestingly in its 1992 Asian Development Outlook, the ADB presented the results of a
study on the levels and growth of military expenditure in the DMCs. No conclusions
were drawn from the results, however. See Kappagoda (1995: 150–51).
4 See also http://www.mofa.go.jp/policy/oda/summary/1999/ref1html.
5 Some of these results were expressed in the 1991 World Development Report of the
World Bank. However, the report itself was The East Asian Miracle, which the World
Bank published in 1993. See also Gore (1996).
6 This definition is repeated in the ‘Governance’ section of the ADB Operations
Manual. See http://www.adb.org/Documents/Manuals/operations/om54aps.
7 The policy document gives as the source for this section the World Bank paper
Managing Development: the Governance Dimension, published in June 1991.
8 See e.g. Bøås’ (1998: 120) comments on the impact that adopting good governance
policies will have on the role of MDBs in the DMCs.
9 See also Article IV, Section 10 of the World Bank’s charter.
11 ‘Good governance’ and the
Development Assistance
Committee
Ideas and organizational constraints
Ken Masujima
more precisely the power of the secretariat, as it operates under the constraints of
the organization. Among scholars who underline the role of organizational struc-
ture, Sikkink (1991) distinguished a difference between organizations charged with
development in Argentina and in Brazil. However, such authors basically compare
organizations across nations. It is necessary to adapt these previous approaches for
an analysis of an international organization. For that purpose, one should speak of
‘organizational constraints’, which derive from the characteristic of the organiza-
tion, and which hinge upon the choices available to policy makers.
We can distinguish the following three organizational constraints:
1 Internal structure: In the case of DAC, we can discern three points. First, the
fact that DAC is not engaged in any operations (technical cooperation, etc.)
is important. The contrast with the World Bank and UN agencies such as
UNDP (United Nations Development Programme) could not be clearer.
Second, the relatively weak role of the secretariat should be underlined. The
intergovernmental structure, with the committee at its centre, clearly limits
any multilateral ambition of the secretariat. Third, the composition and size
of the secretariat need to be emphasized. The relatively small size of the
staff and its composition (mostly economists) has an impact on how ideas
are treated in the DAC.
2 Representation (extra-unit, unit and sub-unit): For an organization with an inter-
governmental character, the question of representation is crucial. For DAC,
the problem was posed at the following three levels of representation: extra-
unit level, unit level and sub-unit level.
Extra-unit level representation refers to the relationships with other interna-
tional organizations. DAC, like any other international organization, is
engaged in a permanent competition with other international organizations.
Thus rivalry with other international organizations in the same field (the
World Bank, etc.) is an important constraint on DAC.
Unit level or national representation refers to the membership of the orga-
nization. Thus in the case of DAC, the fact that it is composed solely of
donors has a significant impact. Sub-unit level representation refers to
which ministries are in charge of DAC within each member government.
Many members are represented by aid agencies (or ministries), but some
are represented by the foreign ministry, and still others by the finance
ministry. Most importantly, the fact that the US is represented by USAID
(and not by the US State Department) has had an extremely important
impact on the positions taken by the US and hence on the positions taken
by DAC as a whole.
3 Culture: The question of structure and representation is important, in its own
right, in constraining directly the choices of agents. However, it is also
important in bringing about certain forms of organizational culture. Kier
(1996) defines organizational culture as ‘the set of basic assumptions, values,
norms, beliefs, and formal knowledge that shapes collective understandings’.
It should be noted that factors other than internal ones relative to the orga-
‘Good governance’ and the DAC 155
nization in question could also shape its culture. Especially important are
the international norms prevalent at at any given time (human rights,
democracy, self-determination, etc.).
Such organizational cultures are important because choices are constrained not
only by objective conditions but also by cognitive factors. In the case of DAC,
one can point to a certain attitude of the organization as a whole, evident since
the time of its creation, as regards its mandate. There is a certain hesitancy on
the part of DAC to talk about the internal structure of developing countries.
The fact that these countries are not represented on the committee has not made
it easier to discuss their internal affairs. Another example of the organizational
cultures at work in DAC is related to the sub-unit level representation. The fact
that aid agencies, which typically hold particular views on development, different
from those of the treasury, are dominant representatives at DAC, reinforces its
ideational outlook. The neoliberal economic doctrine, which swayed the Bretton
Woods institutions, has never predominated at DAC.
In what follows, four periods in the adoption of a good governance agenda are
examined, based on the analytical framework presented here. The relatively
short time-frame chosen is justified in view of the dramatic transformation that
the world was undergoing during that period.
The debate on growth and equity goes back to the beginning of the 1970s
when the idea of ‘basic human needs’ came to the fore of the development
agenda, but it surfaced again at the end of the 1980s. It was the US which took a
position in favour of a growth-oriented approach, insisting in particular on the
force of the market economy. It argued in fact that the DAC work on develop-
ment strategies for the 1990s be entitled ‘Broad-based Economic Growth’.
Although the US side took note of the vulnerable groups who do not benefit
from the market economy, it basically emphasized the crucially important role of
market-oriented policies. Some countries showed more interest in the social cost
of the adjustment process, and they argued that DAC should put more emphasis
on equity.
It is, thus, in large measure a compromise between the two camps that lies
behind the coexistence of ‘growth’ and ‘equity’ in the press release of the HLM
of December 1988. Following the HLM, Joseph Wheeler, chairperson of DAC,
explained that ‘equity’ is shorthand for a variety of concepts such as ‘broad-
based development’, a ‘participatory approach’, ‘basic human needs’, ‘human
resources development’, ‘common drive to eliminate the worst aspects of
poverty’, and ‘investing in people’ (OECD 1988: 27).
However, the transition from ‘equity’ to ‘participatory development’, which
occurred in 1989, is not very clear. Although in the press release of the 1988
HLM the term ‘participatory development’ was used for the first time, it occu-
pied rather small place in the text. It was used in a paragraph enumerating
major developmental challenges in the years ahead: ‘A need to ensure broad-
based growth and participatory development’ (OECD 1988). The notion of
participatory development was put forward especially by UNRISD in 1985, and
therefore was in circulation at the end of the 1980s in the development commu-
nity.5 We have merely to note that ‘participatory development’ in DAC
discussions came gradually to replace the notion of ‘equity’.
Up until 1989, discussion of the internal political factors of developing
countries was confined to three considerations regarding economic develop-
ment. First, the neoliberal economic doctrine was important in raising an issue
of political nature which had been judged too sensitive up till then. At the
HLM in December 1988, the most influential presentation was made by the
US, which argued for ‘broad-based economic growth’. The US emphasized
the positive role of a free market economy. It was argued that some measure
had to be taken to ensure access of the broad mass of people to the fruits of
growth, to enable them to participate in the productive process. This US posi-
tion thus opened the way for discussion of equity, participation, human rights,
and the political structure of developing countries.6 Second, concerns with the
social impact of structural adjustment programmes were raised at the HLM.
They were voiced especially by countries such as Canada, Norway and
Sweden, but other countries also expressed concern. Although no country was
opposed to growth as such, there were differences as to what kind of growth
should be sought. This debate on the relationship between growth and equity
continues to this day. Third, the HLM’s press release spoke of ‘political bottle-
‘Good governance’ and the DAC 157
However, the question was still treated under the umbrella of PD. Thus at the
SLM of 17–18 June 1991 it was agreed to launch a survey of DAC members’
policies and practices on PD. The emphasis was put on gaining information on
‘good government, democratization, and respect of human rights’. In the field of
‘good government’, the DAC distinguished between, on the one hand, ‘more
traditional’ aspects, which had been treated in ‘Principles for New Orientations
in Technical Cooperation’ (OECD 1992: 51–64) under the heading ‘institutional
development’, and on the other hand, ‘more political’ aspects, in the context of
strengthening transparency and accountability, and assuring broader participa-
tion in decision making processes.
Following the decision at the HLM of 1990, DAC continued its work on the
question, and the interim result of its reflection was published in the 1991 edition
of the DAC chairperson’s report, written around September 1991. It noted:
In the short time since the High-Level Meeting of last December, the
dialogue has moved markedly to expand discussion beyond traditional
160 Ken Masujima
The DAC’s HLM of 1991 is remembered for announcing the link between the
allocation of aid and progress in this area. It also led the way toward an
approach on the issue, which came to be referred to as the ‘PD/GG’ approach
(Robinson 1999). It was thus important in marking the transition from ‘participa-
tory development’ to ‘PD/GG’ at DAC. It should be noted, however, that good
governance is employed here still in the sense of ‘administrative governance’ à la
World Bank. In the HLM’s press release, mention was made of ‘good gover-
nance within the framework of law’, which was preceded by a reference to
‘representative government’.
For explaining the adoption of the PD/GG agenda, international explana-
tions apply. The continuing democratization on the world scene contributed to
the consolidation of the agenda at DAC. However, the existence among DAC
members of divergent views on the question was largely to account for the
outcome. Some countries did not want DAC to tackle the issue of good gover-
nance, which was considered more political than participatory development.
These countries were cautious, not wishing to be seen as interfering in the
domestic affairs of sovereign nations, for various reasons. But the US, supported
by several other countries, proposed the creation of a new permanent structure
within DAC to tackle the issue of PD/GG. The US government even offered a
voluntary contribution toward that goal. However, the US was only partially
successful, for as we shall see, only an ad hoc working group was created, and for
a short, fixed term. It was evident that as long as there were countries opposed to
the modification of the work programme (France was most vocal in its opposi-
‘Good governance’ and the DAC 161
the linkages among them. It was not clear, for example, whether democracy fell
under PD or GG, or was to be treated separately under its own heading. This
was true of ‘DAC Orientations on Participatory Development and Good
Governance’ (OECD 1993), a kind of good practice/guidelines document
endorsed by the HLM in December 1993.
The 1993 HLM set up, for a three-year term, an Ad Hoc Working Group on
Participatory Development and Good Governance. This submitted, at the end of
its three-year term, a final report. At the same time, the DAC Expert Group on
Aid Evaluation published a thick synthesis report in 1997. The term of the Ad
Hoc Working Group was not renewed, and instead an informal network on
PD/GG was established to continue work on PD/GG issues. This informal
network concentrated on ‘pilot studies’, involving donors and partner countries,
and produced findings for Benin, Bolivia, Burkina Faso, Malawi, Mauritania and
Uganda. It was decided that the informal network on PD/GG be merged with
DAC’s nformal network on institutional and capacity development (I/CD) in
February 2001 (called GOVNET – Governance and Capacity Development
Network). It remains to be seen how much of DAC’s activities on good gover-
nance will continue after the fusion with I/CD, which regroups officials in
charge of traditional technical cooperation activities in the capitals.
In explaining why DAC ceased to treat the problem of PD/GG as a principal
item after it had become the lead theme in 1992, national explanations, which
highlight the lack of consensus among its member countries (notably the opposi-
tion of certain countries toward the idea of a permanent structure in charge of
PD/GG at DAC), are valid. However, transnational explanations also seem to
account well for the outcome. The fact that a distinct network of aid agency offi-
cials in charge of PD/GG in the capitals did not materialize (in contrast to the
issue of gender, which saw the institutional establishment of sections in charge of
the issue, and which led to the establishment of the Working Party on Gender
Equality) was important in limiting the eventual creation of a permanent
PD/GG organ at DAC.
However, with the passing of time, the limits of DAC as an institution
became apparent. To put it bluntly, DAC does not have much to say about
PD/GG beyond carrying out surveys of donor practices. Above all, as discus-
sions on PD/GG, especially GG, became more and more sophisticated, the DAC
secretariat was not sufficiently equipped for dealing with the technical matters in
depth. Besides, competition with the World Bank played a role. DAC, under the
leadership of a new director of the secretariat, turned increasingly to the ques-
tion of conflict (peace-building) to show its distinctiveness. It is revealing to note
that the question of conflict and development came before PD/GG in the 1997
edition of the report of the secretary-general which referred to the activities of
OECD in 1996. Further, when it came to questions of more political nature,
DAC was not a favourite place for bilateral donors either. It should be noted that
important diplomatic questions have always been discussed outside DAC. On the
most politically sensitive issues of political conditionality, i.e. democracy and
human rights, member governments did not find it useful to come to DAC. The
‘Good governance’ and the DAC 163
Notes
1 The distinction between forum organizations and service organizations was made by
Robert W. Cox and Harold K. Jacobson (Cox and Jacobson 1973).
2 The Development Assistance Group (DAG) was created at the meeting of representa-
tives from twenty governments on 14 January 1960. The OECD came formally into
being on 30 September 1961. The relationship with the DAG was one of the issues of
the negotiations leading to the creation of the OECD (Masujima 1999).
3 For an overview of the work on inter-organizational perspectives, see Finnemore
(1996b).
4 Miles Kahler distinguishes between ‘multilateralism with large numbers’ and ‘multi-
lateralism with small numbers’, referring to patterns of coalitions in multilateral
organizations in the post-war period (Kahler 1992).
5 UNRISD’s study on popular participation was published in 1985.
6 It should be noted that USAID’s new policy on democracy promotion also originated
partly from the neo-conservative economic doctrine. It is also probable that USAID
intentionally adopted the neo-conservative tone in its discourse to justify its develop-
ment agendas (Carothers 1999).
7 USAID issued a series of four initiatives in December 1990 to help shape its
programme for the crucial issues of the 1990s. One of these was the ‘Democracy
Initiative’. Following this paper, USAID published its policy statement on democracy
in November 1991 (USAID 1991).
8 Interview with Mr Helmut Führer, Director of the Development Cooperation
Directorate of the OECD from 1975 to 1993, 26 August 1996.
12 The evolution of the concept
of poverty in multilateral
financial institutions
The case of the World Bank
Alice Sindzingre
strong capacity to absorb them by hiring these individuals as staff members and,
in this way, to absorb their ideas too. Changes are also introduced as a result of
developments in the domestic policies of member countries. Thus the evolution
and differences in the ‘messages’ emitted by the Bank can only be noticed over a
significant time-span.
The Bank is, first and foremost, a bank and not a research institution. It
continues to be dominated by economists and financiers (and also engineers).
Proof based on econometrics and cross-country regressions is the fast track
towards validation. Among the mechanisms constraining the evolution of ideas,
the literature of the Bank is deeply self-referential (making extensive use of grey
literature from inside the institution). Another mechanism is the phenomenon of
amnesia vis-à-vis previous work. This is not peculiar to the Bank but characterizes
the development discourse and agencies in general. Furthermore, the Bank has
become increasingly a producer of knowledge about development, perceiving it
as a global public good, and of economic analysis.2 Research has been in an
expansionary mode, and the sizeable financial and logistical resources of the
Bank, compared to academic research centres or bilateral agencies, facilitates the
construction of vast original databases, the conducting of surveys, and the
collection of information from national institutes, which few can afford.3 The
Bank has the capacity to attract and hire the best scholars and experts on the
international market, as well as former ministers and other high-profile personal-
ities. It also pursues a policy of high visibility through journals, a number of
publications about development, networking and training, addressed to scholars
and officials in developing countries.
data for researchers and policy makers on a global scale. Presented in the World
Development Report of 1990, following the WDR of 1980, the key ideas relative
to poverty were economic growth based on rapid market liberalization, the provi-
sion of basic health, social services, and safety nets. The WDR 2000/1 on poverty
(World Bank 2000b) is a balanced and heterogeneous mixture of internal and
external influences. A kind of ‘third way’ is being advocated, reflecting the notion
developed by centrist political parties in the United Kingdom and the US in the
nineties, and its alternative policies to free marketism and active state interven-
tionism. It refers to market forces but is accompanied by redistributive policies
and institutions of social support (Kapstein 1998–99; Sachs 1999), and it is a
rather consensual notion. Yet the ideas surrounding the WDR 2000/1 are still the
consequences of fierce debates originated by the staff – operations, research –
and member countries. Growth is still considered to be the best instrument for
poverty reduction, as well as opportunities created by the private sector, but poli-
cies must address social inequalities within and between countries and the possible
short-term negative consequences of liberalization.5
This has the dual advantage of offering better conditions for external validation,
and exerting a stronger influence on the discipline of development economics.
Political scientists or sociologists have been hired, but in terms of decision
making their power is weak. These disciplines are confined to specific topics, e.g.
‘social’ topics, gender, education, health, refugees, community participation, in
the case of sociologists; and the public sector, decentralization and corruption in
the case of political scientists. This prevents new approaches to problems, partic-
ularly those that are considered to be of a purely economic nature and,
therefore, within the strict competence of economists, such as macroeconomic
shocks, trade relations, financial crises, and so on.
favours growth, the openness of markets, particularly open capital markets, liber-
alization, free trade, privatization, and a minimal state role. Growth and
market-oriented policies are perceived as serving national security, foreign policy
and economic interests (Bergsten 1998). In line with its domestic policies, the US
does not have a strong interest in poverty reduction per se in its development poli-
cies. This is visible, for example, in the traditional policies advocated by USAID,
and in the treatment of poverty within the US, where growth is a more urgent
priority than poverty reduction. This approach has been supported by the
decrease in poverty that has accompanied the exceptional period of continuous
growth in the nineties. In this particular instance, by putting poverty at the fore-
front, the Bank cannot be criticized for reflecting slavishly the economic views of
the US government, and it can even claim to be independent of its influence.
As revealed in the WTO summit at Seattle in 1999, the US defends the idea
of core labour standards and the interdiction of child labour supported by
unions. These views imply policies against poverty that are opposed to others
advocating export-led growth, the openness of developed countries to products
from poor countries, or observations that child labour is, in the present context,
one of the means for the poor to escape poverty (Basu 1998). The latter views
are backed by some developing countries, and such issues continue to be the
subject of fierce controversy.
Other rich countries have different ideas and try to voice them inside the
Board. For instance, Japan would give the state in developing countries a more
interventionist role than would the US.13 The UK, like the Netherlands, has
become active in aid for poverty, both on a bilateral basis as well as through the
multilateral system, with an emphasis on human rights.14 Scandinavian countries
take into consideration recipient countries and their poverty the most seriously.
Being major bilateral donors, whose funds are welcomed by the Bank, there is a
certain rivalry between these countries over the leadership of European coun-
tries in terms of models of poverty policies (Cox et al 2000). Generally, European
countries tend to be more cautious about a minimized role for the state and the
intrinsic virtues of market policies and growth. Yet all the rich countries of
OECD participate in the Development Aid Committee, which has elaborated
common objectives on poverty reduction, the International Development
Targets. Likewise, the framework of the Poverty Reduction Strategy Papers
(PRSPs) initiated in 1999 has been designed by the Bank with the objective of
being a common basis of poverty reduction strategies for all donors as well as
recipient countries.
There are differences in the concepts of poverty adopted by each country. For
instance, the quantitative poverty criteria used in the US are not accepted by
other countries that follow relative poverty criteria and consequently place more
emphasis on inequality and exclusion (Atkinson and Bourguignon 1999). Similar
problems affect the themes of safety nets, taxation and social protection.
Moreover, poverty as a concept may not belong to a country’s intellectual tradi-
tion, as in France where social protection is more relevant. Second, institutional
arrangements and decision making procedures differ between member countries
The evolution of the concept of poverty 171
and influence their stand on particular issues. The influence of the ministries
(finance, foreign affairs, cooperation) in charge of relations with the Bretton
Woods institutions can vary. Third, member countries may use their own
national research institutions in order to have at their disposal possible alterna-
tive analyses to those of the Bank, or they may prefer to use the Bank’s research.
Furthermore, the influence of domestic public opinion on the positions of
member countries in the Board differs, reflecting their different forms of democ-
racy, lobbying, role of NGOs and citizen’s voicing (see Bøås and McNeill 2003).
several streamlining schemes in the past. But bilateral institutions are unable to
compete with the vast resources of the Bank when it is a question of hiring the
best experts and producing data and studies. Some agencies consider this to be
unnecessary, and choose instead to adopt the conceptual framework proposed by
the Bank.
All countries accept the policy frameworks of the Bretton Woods institutions
because they are members. A number of countries impose the signature of an
agreement with the Bretton Woods institutions as a condition for their own bilat-
eral loans and grants. But it can happen that at the level of their bilateral policies
within a developing country, in the field, even within this common framework
and apparent acceptance, donor countries give only weak support to IMF and
Bank policies. Donor countries also give themselves room for manoeuvre in their
bilateral relations with developing countries (e.g. the aid-dependent sub-Saharan
Africa), where their political and economic interests can be expressed clearly,
using bilateral aid as a more direct dimension of their foreign policy.
context of a rivalry between the IMF and the Bank over the best development
model, despite the official division of labour.
The Bank has reacted to its critics by pushing poverty to the top of its agenda,
and poverty reduction has now become a major component in its programmes
and projects. But for poor countries, programmes and conditionalities are drawn
up jointly with the IMF (following the ESAFs, the PRSPs). In this way, the IMF
has also extended its brief to poverty. NGOs, religious representatives and trade
unions are invited to participate in the process. The objective of poverty reduc-
tion has to be included wherever possible, and the Bank has increased its lending
for Human Development (from 5.1 per cent of total lending in 1980 to 21.8 per
cent in 2000) (World Bank 2000b).
schemes concentrated on employment; while they reduce poverty, this is not their
primary objective (Sindzingre 1997).
Adjustment programmes follow a relatively standard framework, and their
design is indirectly inspired by macroeconomic research and by models.
Likewise, projects follow from the internal rationale of disbursements and
management of a portfolio, and cover standard sectors, for example the public
sector or the banking sector. They are accompanied by a series of reports
relating to the project cycle, but not necessarily by research. In the nineties, the
move towards poverty as a visible objective acted as a driving force to launch
new programmes, poverty reduction being the key theme. These involved the
PRSPs designed with the IMF, the replacement of the ESAF facility by one on
Poverty Reduction and Growth (PRGF). Yet there is a risk that although the
word ‘poverty’ may be included in project documents, many projects are not in
reality focused on poverty.
Notes
1 A tough critique has been made by Srinivasan (1994).
2 Squire (2000: 111) shows that Economic and Sector Work (ESW) has accounted in
the early 1990s for around 30 per cent of the operational budget.
3 In 1996, expenditure on development research amounted to $25 million, or about 2.5
per cent of operating expenditure.
4 See the influential Prebisch Lecture (Stiglitz 1998).
5 As summarized in Kanbur and Vines (2000); see Wade (2001a) on the politics of the
WDR 2000/1.
6 Keefer and Knack (2000); outside the Bank, among a growing literature, for instance
Perotti (1996); Rodrik (1998)
7 This is analysed in several papers by Martin Ravallion; see the review of the literature
by Kanbur and Lustig (1999).
8 See the controversial paper of Dollar and Kraay (2000).
9 The WDR 2000/1 and The Quality of Growth (2000) have been described as ‘harmful
muddle’ in the Economist (30 September 2000: 108).
10 For instance by Jagdish Bhagwati or T.N. Srinivasan; Naim (2000: 508) concludes that
the so-called Washington Consensus is much more a ‘Washington confusion’.
11 For instance Amartya Sen, Dani Rodrik (Rodrik 1998; 1999), Jeffrey Sachs, or Alan
Winters (Winters 2000a; 2000b).
12 For instance over Joseph Stiglitz’s arguments that development is a transformation of
society entailing not only the creation of market institutions but also of political insti-
tutions (Stiglitz 1998; 1999).
13 As shown by the tensions surrounding the World Bank’s study on the East Asian
Miracle in 1993; see Amsden (1994). Japan’s efforts to put forward the lessons of its
own experience of development are examined in Gyohten (1997).
14 See the White Paper issued in 1997, ‘Eliminating World Poverty’.
15 See the ‘Meltzer’ report, set up by the US Congress in 1999.
13 The role of ideas in the
United Nations
Development Programme1
Asuncion Lera St Clair
Introduction
The United Nations Development Programme (UNDP) was created to function
as the specialized agency that coordinates all the development assistance and
technical cooperation of the United Nations (UN). Since its creation in 1965,
UNDP has evolved from an agency giving technical and scientific assistance to
less developed countries (LDCs) to become a post-project agency, a policy agency
whose role is to provide advice, advocacy and resources to empower the poor.
Ideas in UNDP have changed significantly over time, particularly when we look
at the changes in values embedded in this organization’s view of development
and poverty. In the 1960s poverty and lack of development were conceptualized
by UNDP as income and consumption problems, supposedly solved by increases
in economic growth and external aid. Since the 1990s UNDP has promoted
‘human development’, in part based on Amartya Sen’s ‘capability approach’,
and has lately reformulated this development perspective in terms of human
rights and freedoms. Such conceptualizations of development and poverty
explicitly look at the ends and means of the process of development in terms of
intrinsic values and what these mean for people’s lives. In short, UNDP has
moved – at the conceptual level – from endorsing an economic view of poverty and
development to increasingly include an ethically formulated perspective that conceptu-
alizes and evaluates the role of development in terms of securing the freedom,
well-being and dignity of all people, and framing these goals in terms of social
justice.
This explicit concern for ethical issues has evolved unevenly, but has eventu-
ally emerged in UNDP’s official statements and documents as a means to
respond either to crises in the world or to weaknesses in the theories used to
conceptualize development and poverty. This has helped to draw attention to the
fact that development theories have important ethical components. Although
some use the term ‘development’ in a descriptive sense, meaning a process of
economic growth, modernization or industrialization, there is also a normative
sense of the term. Most would argue that development per se is a value-laden
term that tacitly entails that certain types of economies and societies are better
than others (Dower 1983). Some moral principles are relevant to the relations of
The role of ideas in the UNDP 179
richer countries and international agencies with poorer countries; and we may
ask questions such as: What is good development? How is good development
related to human well-being or a good life? Who is or should be responsible for
bringing about good development? What are the most important obstacles to
good development? The value dimensions of development – as well as the moral
costs of development and poverty eradication policies – have been the subject of
study by a heterogeneous – and in many cases disconnected – group of
researchers since the early 1970s (Crocker 1991; 1998; Dower 1998; Gasper
1986; Goulet 1971; 1995). These authors have promoted ethically explicit
conceptualizations as alternatives to dominant notions, as more appropriate
options precisely because of their moral content. But it is not only moral values
that have an important role to play in accounting for the evolution of ideas in
UNDP.2 This chapter focuses on the role of some cognitive values, such as
measurability, coherence, or simplicity. Like scientific theories, policies have not
only moral or ethical but also non-moral normative constraints. They must be
able to satisfy certain criteria in order to be considered successful, such as testa-
bility, quantification, or simplicity.3 Changes in values are ways to respond to
failures of theories or to crises in the world. Values change at the same time as
theories evolve or are replaced by other theories. Theories – sets of doctrines
and assumptions – in the social sciences, need to offer coherent and adequate
solutions to the problems they aim to solve. Alterations of these theories are a
response to their inadequacies or flaws as much as a response to real problems in
the world (Wolin 1980). Cognitive values are a source of power for ideas. For
example, whether a concept is suited for quantification and therefore easily
measurable has been an important reason for the rapid or slow institutionaliza-
tion of that idea. Furthermore, each science has an ordering of cognitive values;
thus the identification of the roles of such non-moral norms also helps to
account for the predominance (or lack of it) of certain disciplines in the thinking
of UNDP.
The focus on both cognitive and moral values implies blurring the distinction
between facts and values, given that all values – coherence or measurability as
much as goodness – arguably derive their authority from ideas of human flour-
ishing and ideas of reason.4 In an important sense, we take as rational what
helps us achieve what we conceive as good for us as human beings. That is,
conceptions of rationality are always guided by our idea of the good. Ideas can
be powerful for many different reasons, including their moral and cognitive
content. Thus the moral and cognitive values implicit in many ideas used by
UNDP endow them with power: the power of morality and the power of ratio-
nality.5
This chapter begins its analysis with the origins of UNDP, deals rather briefly
with the next twenty-year period, which saw increasing concerns for distribution
and basic needs approaches, and mostly focuses on the new values and goals
brought about by the idea of ‘human development’ in the 1990s. The last
section of this chapter elaborates on what may be characterized as a learning
process in UNDP; how the organization, although unevenly and in a non-linear
180 Asuncion Lera St Clair
way, has not only increasingly accepted more explicitly ethical values as the basis
for its conceptualizations, but has also been forced to keep its conceptualizations
open to public discussion and democratic deliberation.
Yet the values put forward by the UN Charter – freedom from want, human
dignity, human rights, equality, etc. – were not taken as integral elements of the
actual conceptualizations and practices of these agencies. UNDP assimilated the
practical goals of the agencies it replaced and thus continued that trend; and
sharing of technical and scientific expertise, political neutrality, and respect for
self-determination and national sovereignty are principles still embraced by
UNDP today. UNDP also inherited from EPTA its modus operandi. EPTA made
deals only with governments of underdeveloped countries; put its emphasis on
the poorest of those developing countries; gave its funds in the form of grants,
and distributed its funds to other UN specialist agencies according to sectoral
projects. EPTA also started the process of establishing connections in each recip-
ient country through country offices, thereby laying the foundation of the
current UNDP’s field offices network. Last, EPTA operated through collabora-
tion with other specialized agencies, distributing its funds in a sectoral manner.
Health grants were channelled through the World Health Organization (WHO),
support for employment programmes through the International Labour
Organization (ILO), and so forth. The Special Fund, created in 1958, had as its
main goal to provide for pre-investment opportunities for poor countries, and
was headed by Paul Hoffman, former manager of the Marshall Plan. Neither of
the two earlier UN agencies operated under a particular theoretical framework,
nor did they make contact with scholars or use the results of think-tanks working
on the subject of development.7 Economist W. Arthur Lewis, Hoffman’s deputy,
‘gave the Fund an intellectual initiative, drive, and dynamism in the face of
agency opposition and vested interests, but many of his initiatives were dissipated
after he left’ (Mendez 2002).
Although Lewis never thought that economic growth was an end in itself
(Streeten 1993), UNDP seems to have followed the international consensus on
The role of ideas in the UNDP 181
the faith in the powers of industrial progress and the capacity of a strong
economy to solve all problems as the dominant paradigm of development
economics. According to Hoffman, the main goal of development was ‘to help
the people of the low-income countries become more productive and, hence,
able to purchase more, consume more, and contribute more to expanding the
whole world’s economy’ (Hoffman 1970). Finally, Hoffman ordered a study of
the UN system’s capacity for development from one of the leading figures of
development cooperation at the time, Sir Robert Jackson. The Jackson Report
stated that UNDP lacked a think-tank that could work out ideas and launch
them as directives for policy. The report emphasized the need to transform
UNDP into an effective operational organization; it supported the country
approach as a means to assure that national goals were the starting point of all
UNDP assistance; it endorsed the role of UNDP as endowing the LDCs with the
conditions of pre-investment; last, it asserted that the most important goal of
development was the transfer of knowledge – scientific and technological – in
order to raise people’s living standards. The Jackson Report emphasized that
UNDP could only provide training and well-being to people if the needs of the
LDCs, not some other view of aid, were the starting point of UNDP’s
programme design (UNDP 1969).
UNDP officially accepted many suggestions of the Jackson Report, particu-
larly a strong emphasis on the values of science and technology and the
ratification of country programming as its operational strategy. These views
coincided with the principles being put forward at the time by the Second
Development Decade (UN 1970). In short, UNDP embraced an economic
conception of development and its default view of poverty as income poverty
(usually measured using the one-dimensional indicator of individual income). By
the end of Hoffman’s term, UNDP was the coordinating agency of the UN for
development and technical cooperation, it had been endowed with more funds
than ever before, it had started creating its own think-tank, and had accepted the
position of a morally concerned and even obligated international actor; but it
did not include this ethical concern in its conceptual tools.
But UNDP also harvested some concepts that would lead this institution to
become an active actor in the intellectual conceptualization of ethically explicit
ideas. The ‘human factor’ became a subject inside UNDP under the leadership of
Bradford Morse,14 through the inclusion of concern for the interests of women,
and the elaboration of ways to promote self-reliance (an idea which originated in
the dependency school of the late 1960s and 1970s).15 The former led to the
establishment of UNIFEM as an independent part of UNDP in 1985. The latter
idea led the institution to strengthen its operational system, and made the figure
of the Resident Representative a key actor, as UNDP sought to place emphasis on
country offices, which were mandated to deal exclusively with governments; and
to help the LDCs to achieve more self-reliance, UNDP was required to respond to
the needs of central governments, but also to evaluate and assess the needs of
local communities, and all with minimal resources. Even in such a difficult
economic, political and conceptual environment, Bradford Morse succeeded in
shifting UNDP goals towards building self-reliance, strategies that would later be
called capacity development (UNDP 1984). Building self-reliance, in turn, led
UNDP to focus on grassroots groups, in particular minorities (such as women),
and to start building up contacts with non-governmental organizations (NGOs)
(UNDP 1985).
The focus on self-reliance through the establishment of relations with NGOs
was not only a response to political pressures, but ended up also as a conceptual
step in order to accomplish the task posed by the inclusion of social objectives: to
know the context of poverty. The emphasis on self-reliance and NGOs may thus
be seen as linked to the focus on the informal sector, as a continuity of values:
the values and ways of life that come from the particularities of the environment
where the poor live. Contacts with NGOs and a focus on the informal sector
relate to the sociological aspects of poverty; that is, they bring concerns about
the values of social life. What is a society? What are the relations between indi-
viduals and their social environment? What is the role of social foundations in
poverty reduction or creation? The 1980s mark a transition in which UNDP
advances from the position of apparently placing almost no value on the poor, to
one where it conceives of poor people as agents of their own destinies, taking
them at least as informants for – if not designers and implementers of – any
poverty strategy.
It is in 1986, during the Islamabad North–South Roundtable, that the idea of
human development first breaks to the surface (Haq and Kirdar 1986). As early
as 1985, Bradford Morse claimed: ‘In the past, development policies tended to
favour the build-up of physical capacities over human capabilities. More atten-
tion must be given to these latter resources as the true agents and sole objects of
development’ (UNDP 1985). The institution was ripe to take on the challenge
posed by Mahbub ul Haq (1976; 1995), who since the late 1960s had defended
human-centred views of development: to conceptualize and espouse the ideas of
human development and human poverty, developed with the help of Paul
Streeten and Amartya Sen. UNDP created the arena where these conceptions
developed – the Human Development Report Office, although this was an inde-
The role of ideas in the UNDP 185
high human development at modest income levels, and poor levels of human
development at fairly high income levels’ (Rist 1997: 206).
The rapid acceptance of human development within UNDP – including the
increasingly widespread production of country Human Development Reports after
the mid-1990s – and the spread of the idea to other multilaterals and bilateral
donors – with the exception until very recently of the World Bank, which has
been very slow in assimilating the lessons from the UNDP – is due, no doubt, to
the analytical power of this idea as well as to the moral content of its message.17
Haq ‘took on the leadership of large armies of discontent that were gunning,
somewhat sporadically, at the single-minded concentration on the GNP’ (Sen
2000a). Haq’s personality and qualifications made him a respected partner in the
South, given that he was representative of their views, as well as a respected and
recognized economist. Haq was capable of producing an idea that offered an
alternative view able to accommodate a plurality of concerns, thereby coordi-
nating discontent (Sen 2000a).
There is, however, another reason for such rapid acceptance: human develop-
ment gradually evolved several indices, such as the Human Development Index
(HDI) and the Human Poverty Index (HPI). This showed that at least some
aspects of human well-being can be measured – although indirectly – and
UNDP is therefore not departing from the same cognitive values of mainstream
approaches. It is clear, however, that human development and capability poverty
have more elements than those expressed in the main HDR indices.
The rapid acceptance of human development has had a domino effect within
this institution, leading to very substantial changes in many other ideas and in
the operational structure of UNDP. The effort to conceptualize the implementa-
tion of human development has forced the UNDP to re-assess the means used
until now for this purpose. Many of the means now proposed by UNDP are also
viewed as having intrinsic as well as instrumental value. In 1995, UNDP made
poverty reduction one of its main objectives and created a division – the Social
Development and Poverty Elimination Division (SDPED) – to work out ideas
and strategies with enough holistic capacity to integrate the different dimensions
of development and poverty. Capacity building, sustainable livelihoods, and the
Civil Society and Participation Programme (CSPP), among others, are the result
of UNDP’s attempt to reach an understanding of the lives of the poor, and
implement sustainable human development. All these strategies share the
common denominator of looking at the contextual factors of poverty. They
broaden their arena of action to the whole society, to incorporate concerns for
informal patterns of behaviour (social as well as personal), and to look at poverty
as an issue with multiple dimensions as well as changing needs (UNDP/SL
2000a; 2000b; UNDP/CSOPP 2000a; 2000b). The effort of implementing
human development principles leads UNDP to concentrate on the ways in which
the infrastructure of society can be transformed so as to help promote and
respect people’s choices.
The current focus on human rights and governance are, then, further conse-
quences of UNDP’s attempt to deepen the idea of, and implement, human
The role of ideas in the UNDP 187
Western values. Also, some may see UNDP’s ideas as technocratic, grounded
only in Northern knowledge and science. UNDP’s evolution may thus be marked
by a tension provoked by the many possible ways to answer the question: Who,
and for what reasons, decides what is best for the poor? Many of the techno-
cratic and market-based values espoused in the 1960s remain on UNDP’s
agenda, thereby creating a conflict of values. The strategy of taking the particu-
larities of the lives of the poor as a point of departure for poverty reduction
policies, the goals of opening people’s choices and respect for the natural envi-
ronment, or the emphasis on human rights, may sit uneasily with technocratic
rationality – and the aim of continuous economic growth, and the market-driven
diversification of human wants brought about by the apparently inevitable
consumerist side of development.18, 19
It has been argued that UNDP’s increased normativity is not the result of
an effort to include more worthy goals based on the assumption that the poor
are moral agents, but rather a ‘default’ strategy – a way to justify its existence
given its lack of practical power. It is true that there is a discrepancy between
UNDP mandates and principles, and its economic capacity. But to claim that
UNDP is normative by default undercuts the importance of normative justifi-
cation, especially when such justification has some power to appeal to people’s
reason and commitment – as is the case, I argue, with human development.
Aspiring to normative ideals can and should lead UNDP and other multilat-
erals to seek more effective power precisely to protect people from exploitation
and repression.
It is also relevant to note that unlike the World Bank, for example, UNDP has
a democratic voting system that assures, to a certain degree, the presence in its
ideas of various values and worldviews as well as universal membership. Indeed,
the UN as well as the Economic and Social Council (ECOSOC) are normative
institutions: their role is to promote norms and principles, many of them stated
in the UN Charter, which are the result of deliberation among, and the non-
weighted consensus of, member countries. The egalitarian voting system of the
UN and the economically weighted system of the Bretton Woods institutions
have created a substantial philosophical gap between these two types of multilat-
eral institution. The latter have accepted the defence of the principles of the
market economy above any other type of principle, including ethical ones. If the
power of ideas were exclusively derived from their economic support, the
UNDP’s would have close to none, and that is simply not the case. Indeed, the
World Bank is now increasingly following the path marked by UNDP in its
conceptualization of development and poverty (World Bank 2000b). The preva-
lence of UNDP, in this case, can be partly explained by a real moral and
cognitive power in some of this organization’s ideas. Ideas are more important in
development than the public is led to believe. Governments around the world
have a stake in the HDR rankings, and moral blame is starting to be significant
where countries lag behind in certain rankings, even if full responsibility is not
assigned. And that is one of the first steps towards changes in social values and
eventually in policies.
The role of ideas in the UNDP 189
content of means demanded the reconsideration of the goals they had to serve.
The continuous re-evaluation of the means to achieve human development is an
instance of such dynamic processes. Human rights and good governance are
used by UNDP as means to achieve, and in turn re-define, the goal of human
development.
However, UNDP must add to this process of open-ended re-evaluation of
goals and means a renegotiation of ideas, as the social settings of developing
countries change and the shared understandings between aid donors and aid
recipients evolve, which entails that the objectivity of the ideas that form
UNDP’s policies on poverty and development can only be such when seen from
multiple points of view (Hacking 1999; Putnam 1994). In other words, UNDP’s
evolution of ideas is a learning process, as long as we can reconstruct this evolu-
tion of ideas as a move from scientifically proven concepts rooted in the
experience of the North, to broad, open-ended, and pluralistic ideas for contin-
uous re-evaluation and public discussion. As long as UNDP concentrates on a
continuous renegotiation of knowing and valuing, this organization will not be
imposing a particular rationality or a particular set of allegedly exclusively
Western values. In fact, the ethical norms underlying many UNDP documents
since the 1990s are not based on a particular theory of value, but rather on a
theory of valuation. For example, the main normative emphasis of human
development is on a particular formulation of freedom based on Sen’s philo-
sophical work. And Sen argues at length that the freedom he refers to must be
conceived as something whose ‘real’ essence is unknown, because in practice
the idea of freedom refers not to one freedom but many. Furthermore, as long
as the poor are viewed as moral agents with their own particular social settings,
freedoms must be posed in the context of choice situations. The challenge for
UNDP, therefore, is to keep its ideas open to both academic and popular delib-
eration. Such emphasis on public deliberation and its connection to justice are
at the core of Sen’s conception of development as freedom (Sen 1999). Mahbub
ul Haq must certainly have been aware of this when he referred to human
development:
Haq and Sen have raised the stakes high for UNDP. This multilateral agency
must keep its formulations of the good life open to democratic deliberation, and
this entails that the only reasonable way to proceed is by guaranteeing every party’s
participation, including the poor.
The role of ideas in the UNDP 191
Notes
1 The research necessary for writing this chapter was funded by Norwegian Research
Council grant no. 141147/730. Thanks to Desmond McNeill, Morten Bøås, David
Crocker, Desmond Gasper, Nils Gilje, Inmaculada de Melo-Martin, Sanjeev Prakash
and Stephen Turner, for useful comments on an early version. Special thanks to
Richard Jolly for valuable empirical information.
2 Hoksbergen (1986) makes a similar point.
3 The Human Development Report 2000, for example, also links the moral and the non-
moral together, given it argues that there is an ethical duty to quantify the success and
failure of the goals posed by development.
4 Putnam (1990) makes a similar point.
5 The editors of this volume claim that the best theoretical framework to analyse the
role of ideas in multilaterals is a middle path between two theories of international
relations, constructivism and realism. Philosophically, constructivism refers to the
contingency of knowledge and realism and is related to the acceptance that objects
and facts are independent. As much as I acknowledge that knowledge is constitutively
a social product, it is important to distinguish between the ‘idea of x’ and x.
For example the idea of a woman refugee, which is but a classification of certain
type of woman, and the reality of women refugees. Certain social conditions in
certain countries force people into flight (or to flee for their lives), but we cannot
talk about social construction in that context. We must therefore distinguish
between ideas themselves and the matrix of that idea. The matrix in which the
idea of a woman refugee is formed, is a complex of institutions, advocates,
newspaper articles, lawyers, court decisions, [or] immigration proceedings.
(Hacking 1999: 11)
6 The merger was ratified by Resolution 2029 (XX) on 22 November 1965, and UNDP
started functioning in 1966.
7 A UNDP document claims that technical assistance was ‘an inexpensive means of
assisting and uplifting the world’s poor. A few skills imparted, some techniques trans-
ferred, key people trained, some basic equipment provided and the developing
countries would move in unison into the thriving tumult of the world industrial
economy’ (UNDP 1985).
8 Chenery et al. (1974) argued in that direction and aimed to demonstrate that the right
type of distribution would benefit everyone.
9 The World Bank was also instrumental in the spread of this new idea about develop-
ment and poverty. In his address to the Board of Governors in 1973, McNamara
pledged the reorientation of development policies towards the achievement of basic
needs for all (McNamara 1981).
10 It is important to notice that there were substantial differences between the use of
basic needs by multilaterals and the conceptualizations of their creators, Mahbub ul
Haq and Paul Streeten. The move from academia to policy distorted this approach in
a considerable way. For important contributions to the understanding of basic needs,
see Doyal and Gough 1991; Stewart 1985; Streeten et al. 1981; Streeten 1984.
11 I am assuming here that UNDP policies since the 1970s have become more poverty-
oriented. But in an important sense that is not so straightforward as UNDP seems to
believe.
12 This shift from inputs to outputs is very important. Bureaucratic structures usually
concentrate on measuring inputs. A focus on outputs requires an elasticity that
bureaucratic structures usually do not have. This points to a peculiar characteristic of
UNDP: its capacity to decentralize more easily than other multilaterals, to be more
elastic and therefore to tune in easily with the recipients of aid.
192 Asuncion Lera St Clair
Introduction
Unquestionably, the West, and in particular the United States, controls the key
multilaterals (Woods 1999: 9). The US dominates the weighted voting in the
IMF, and the primary producer clause of the WTO codifies the West’s leading
role in shaping the international trading order. However, international institu-
tions also increasingly play an autonomous role. In fact, it was the relative
decline of the US that pushed multilateral institutions into a prominent role.1 As
Escobar argues, albeit in a different context, ‘from these institutional sites’
(Escobar 1995b: 41) flows the ‘process of institutionalisation and professionalisa-
tion’ (ibid.: 45) of dominant forms of knowledge, or in the context of this volume
– ideas. This, nonetheless, is not a tale of metropolises and peripheries because it
describes:
The ‘state’ in this conception, is not the name of an actor, it is the name of
a way of tying together, multiplying, and coordinating power relations, a
kind of knotting or congealing of power.
(Ferguson 1990: 273)
194 James J. Hentz
B’s attributes and actions are affected by A, and vice-versa. Each is not only
influencing the other, both are being influenced by the situation their inter-
action creates. … The behavior of [a pair of units in a system] cannot … be
resolved into a set of two-way relations because each element of behavior
that contributes to the interaction is itself shaped by their being a pair.
( Jervis 1998: 978)
sight has led scholars to ignore significant subsystemic social understandings that
can contradict and overwhelm international prescriptions’ (1997: 32). An instru-
mental complement to the intersubjective ontology of constructivism is
necessary; a theory or model of agency is therefore essential, to complement a
constructivist explanation of interest formation.
Ideas as ‘materials for action’ is the central explanatory variable. Ideas, specif-
ically learning, can account for new interest formation. But, as Hall states: ‘Ideas
have real power in the political world, [but] they do not acquire political force
independently of the constellation of institutions and interests already present
there’ (1989a: 390). Part of that constellation is a web of multilaterals and
academics promoting certain ideas. That is, ideas inform policy not only because
they are vested in interest, but also because they become embedded in institu-
tions (Sikkink 1991; Biersteker 1995).
Constructivism’s anti-positivist ontology led it to mimic neorealism’s systemic
bias and to largely ignore the dynamics of domestic politics. In fact, much of
constructivism was more forgiving of neorealism’s unitary actor assumption than
of neoliberalism’s individualism (for which it claimed greater affinity). It has also
ignored the central place of power in politics.
Blyth 1997). Ideas are treated either as weapons used by competing elites, or one
set of interests among others that powerful groups are promoting. But ideas are
this and more. The causal power of ideas rests in their ability to redefine state
interests. As Ernst Haas stated: ‘learning is but one other word for reinterpreting
one’s interest’ (1980: 370). Learning is stimulated by the introduction of new ideas,
but not just any kind of idea will suffice.
An argument using the spread of neoliberalism to demonstrate the power of
ideas demands confronting powerful materialist counterfactuals,5 such as the
structural power of international capital and the hierarchical ordering within
multilaterals. But which ideas are promoted cannot be explained by purely mate-
rial factors, nor why some gain traction and others do not. Finally, as Blyth
cautions, ‘Attributing a change in behaviour to a change in ideas is tenable only if
it is counterfactually demonstrated that the change could not have occurred
without the ideas’ (1997: 236). This does not imply that ideas must be proven
sufficient for change, but only that they be shown to be necessary for change.
Political actors competing to promote policies favouring their interests are the
intermediaries through which a state’s interest is defined, or redefined. Ideas have
causal power; that is, they ferment policies, precisely because of their advocacy by
powerful groups. If, returning to Haas’ dictum, ‘learning is but one other word for
reinterpreting one’s interest’, what we want to know is what ideas triggered such
learning and how (if ) those ideas have defined or redefined a state’s interests – its
broad objectives of policy. As Nau argues, the policy process is more than interest
(society) and institutions (state). There is a competition within what he calls a
‘cocoon of non-governmental actors’ (1990: 44). That competition plays out on
the ideational plane as well as the political, and each influences the other.
Finally, this volume’s historical perspective highlights the ebb and flow of
ideas within Nau’s ‘cocoon of non-governmental actors’. At different times
particular ideas seem to capture the attention of multilaterals: the informal
sector in the 1970s, sustainable development in the 1980s, and governance and
social capital into the twenty-first century. In remains to be seen how ideas
become locked in, and this reminds us to examine how states gain ownership of
those ideas.
Carr understood the idea of language as power, and that discourse helps shape
politics (Buzan 1996). In fact, as Buzan (1996) notes, even post-structuralists such
as Der Derian and Robert Ashley have found classical realism useful.
Waltz argued that classical realism was limited by its behaviourist method-
ology, which explains political outcomes by studying the constituent parts of a
political system (Burchill 1996). This led to the curious anomaly, from a neorealist
perspective, of what is a rational institutional design, from a rational choice
perspective, being irrational from the perspective of a state trying to survive in the
international system. Classical realists understood this dilemma. Thucydides
noted that states do not always act in a way that maximizes self-preservation
(Bagby 1994). Neither was Machiavelli wedded to the principle of the rationality
of international actors (Forde 1995). The individualist ontology of rational choice
is apparently in direct conflict with structural realism because it does not neces-
sarily lead to optimal state behaviour. States often act irrationally. Conversely,
state behaviour in the face of structural constraints may conflict with what
rational choice might expect at the domestic level. Rational choice and neore-
alism can offer different and conflicting predictions of ‘rational’ state behaviour
because what is rational is defined by the a priori choice of your level of analysis.
The agent/structure model can square the circle. Examining systemic or
domestic logics in isolation cannot solve the riddle of rationality in international
politics, particularly in times of change. The dynamic interaction of agent and
structure creates its own logic. As Ikenberry and Doyle explain:
The end of the Cold War, of course, changed how the units stand in relation
to each other – a structural change. But Waltz’s omitted variables are key for
explaining this. One constructivist explanation of how the international struc-
ture was changed through the actions and interactions of transnational actors
illustrates the weakness of neorealism. Stein argues that the Soviet Union’s reac-
tion under Gorbachev to economic decline is partially explained by the influence
of new thinkers, whose ‘international contacts facilitated the exchange of ideas
between transnational communities and the development of mutually under-
standable vocabularies and concepts’ (1995: 241). Transnational relations
influenced the dynamic interplay of domestic political forces in the Soviet
Union, which led to a redefinition of its security interest (Deudney and
Ikenberry 1991/92). The Soviet Union ‘learned’ that it had to make a tradeoff
between immediate security (a continuing emphasis on heavy industry and
defence spending) and economic reform. The difference, as Brooks points out, is
concern for short-term military security versus long-term military security
(1997). Neorealism argues that states heavily discount the future and thus would
not make such a decision. The Soviet Union should not have allowed its vassal
202 James J. Hentz
The KWS was an essential tool in the West’s defence against the spread of
communism, which had intuitive appeal to the war-torn societies of Western
Europe. Without the Cold War, the structural imperative of the KWS is lost. But
it also had facilitated domestic political coalitions necessary to support the edifice
of the KWS.
Constructivism must account for domestic political power struggles, and the
nature of state institutions. A realist agent/structure model would expect that
these would be reconstituted and constitute the international system. Carr
understood this relationship:
Reason, taken out of the neorealist mix, needs to be thrown back in. And
ideas, or ‘knowledge politics’, play out within and shape domestic political
contests, which are strongly influenced by and embedded in transnational
activity. Constructivists understand this, but the ability of ideas to penetrate
states can vary. As Risse-Kappen argues, state characteristics may facilitate or
inhibit the flow of external ideas (1995). But Risse-Kappen treats state charac-
teristics as given, and little attention is paid to the fact that states themselves
adopt institutional arrangements deemed necessary to adapt to a changing inter-
national environment. The Parliamentary Reform Act of 1832 in Great Britain,
for instance, revised the system of representation, reducing the power of the
landed elites. Without this institutional change, the Corn Laws could not have
been repealed. It was, thus, a reflection of, and an institutionalization of, the
growing power of the industrial class. Eichengreen, for example, argues that the
coalition of specific agricultural and industrial interests that supported the
Smoot-Hawley Tariff was successful because of reforms in Congressional proce-
dures (Eichengreen 1989).
The literature on globalization acknowledges the central role state institutions
play in either promoting or inhibiting that process.10 Maxfield argues that
economic policy is likely to reflect bankers’ preferences under three conditions: an
independent central bank, if the finance ministry is allied with the central bank
and exercises hegemony over other ministries, and if state industrialization or
planning authorities have little ability to control the flow of investment funds
(1990). Other scholars argue that globalization occurs more easily where there is a
concentration of state power (Pantich 1997). But how particular institutional
configurations come about, or how they might change, is not addressed. The
causal arrows actually flow both ways. As Bradshaw and Zwelakhe argue, the
penetration of foreign capital influences state characteristics (1990). Globalization
strengthens certain ministries, typically including finance (Cox 1992a),11 and
these ministries gain strength because, as Haggard and Lee (1993) argue, a
concentration of banking/industrial economic power reinforces the power of
groups in favour of economic liberalism. In South Africa, for instance, Kornegay
and Landsberg argue that a Keynesian economic strategy would demand a
central role for the Ministry of Public Works, ‘which curiously seems to have
adopted a low profile’ (1998: 9). The point is, of course, that a monetarist
economic strategy privileges other departments, such as finance and the reserve
bank. Interests and states are typically treated as separate analytical entities, but
they are better appreciated as being mutually constituted.
204 James J. Hentz
Conclusion
International relations should now build on constructivism’s contributions. This
will entail, however, not further ontological and epistemological entrenchment
where rationalist and reflectivist continue to take shots at each other across the
metatheoretical battlefield, but rather an exploration of the terra incognita in
between. This can include post-structuralist analysis of development.
In fact, although this contribution does not take a post-structuralist posi-
tion, it is consistent with Nustad and Long’s chapters. Both focus on the
development discourse from below, claiming that a technocratic discourse
from above ignored the importance of human agency from below. From a
critical perspective, a positivist/technical discourse of development domi-
nated by the West and its multilateral surrogates entrenches power relations
between North and South. As Nustad points out, Truman’s faith in scientific
and expert knowledge was part of his anti-communist crusade. Similarly,
Waltz’s neorealism has often been labelled conservative. To use Ferguson’s
phrase, ‘the anti-politics machine’ is cloaked in positivist rhetoric and
discourses obscuring political processes and their underlying power relation-
ships. Whether the current international system is most accurately
characterized as multi-polar or loose hegemonic, the power of multilaterals in
international politics is still hierarchically arranged (Woods 1999).
Nonetheless, because agents can affect the structure, the participation of
developing countries in the larger developmental discourse can abrade the
strict hierarchical arrangement of international politics.
The case studies presented provide a rich vein for testing the framework of
analysis offered here. The varied pace and impact of different ‘ideas’ across time
can be explained by a realist agent/structure model. This chapter has therefore
avoided framing the latest dichotomy in international relations as being positivist
vs. interpretive,12 because as constructivism can demonstrate, societal interests
and state institutions are continually reconstituted within a process of reconsti-
tuted interests, where the web of multinationals imbued with the power of ideas
operates.
Notes
1 Hegemonic Stability Theory predicted a decline of the international economic
system as the US slid off its hegemonic perch. However, the international institutions
created during the early post-World War II years sustained relative stability. For a
complete discussion of the central role of international institutions, see the writings of
G. John Ikenberry (1993; 1996).
Across the constructivist/realist divide 205
2 For discussions of this problem see Sandholtz (1993), Wendt (1992) and Cohen
(1990).
3 Although not covered in this chapter, this competition includes alliance-building
between multilaterals and academia, as well as between multilaterals and specific
domestic interests within certain developing countries.
4 For instance, Emanuel Adler (1997) in his seminal study on ‘power of ideology’ never
seems to untangle the two. He considers ideologies as a ‘specific type of idea’, but
uses ideas and ideology as seemingly mutually reinforcing by repeatedly pairing them
together.
5 For a similar agrument see Biersteker (1995).
6 Robert Keohane and Joseph Nye (1987) acknowledged the importance of linking a
process-oriented version of systemic theory with an analysis of domestic politics, but
purposefully limited their analysis to the level of the international system. The subse-
quent literature, as they later pointed out, followed their lead.
7 Two possible exceptions are Risse-Kappen (1995) and Legro (1997). The former uses
different state structures to explain the power of ideas. This might be considered a
reification of the state, since state structures are given. The latter uses the cultures of
national military organizations to specify which norms matter.
8 Kratochwil (1989) and Keohane (1989) both acknowledge the importance of institu-
tionalizing norms, but do not go far enough in explaining the robustness of those
institutions.
9 Blyth (1997) argues that the two main schools of institutionalist theory that focus on
ideas, historical institutionalism and rational institutionalism, suffer from this
problem. The examples he uses for the former are the works of Peter Hall and
Kathryn Sikkink, and for the latter Judith Goldstein and Robert Keohane’s edited
volume, Ideas and Foreign Policy (1993).
10 For an example of the former see Garrett (1995).
11 Weeks (1996) has claimed the same for countries in Southern Africa adopting struc-
tural adjustment programmes.
12 See Keohane (1988) and Adler and Haas (1992).
15 Ideas and institutions
Who is framing what?
Morten Bøås and Desmond McNeill
‘The question is’, said Alice, ‘whether you can make words mean so many
different things’. ‘The question is’, said Humpty Dumpty, ‘which is to be master –
that’s all’.
(Lewis Carroll, Alice’s Adventures in Wonderland )
The former is politically naive, ignoring the fact that there are powerful interests
at stake – both internationally and also within and between different multilateral
institutions. The latter is simplistic, ignoring both the power of ideas and institu-
tionalization, and the complexity of power relationships within multilateral
institutions. For us, the challenge lies not in simply rejecting these two extremes,
but in establishing a coherent intermediate position which is theoretically
rigorous and supported by the empirical experience of recent years.
Our central theme – the relationship between power and ideas – is not new to
the social sciences; it has been debated since humankind started to reflect on the
world and our place in it. But this book has been concerned with the power of
ideas in a very particular setting, namely the system of multilateral development
institutions. Such a system, and the institutions which constitute it, must be
anchored in some sort of perception about what kind of collective good one
Ideas and institutions: who is framing what? 207
would like to achieve, and more broadly in a ‘shared’ set of ideas. An important
question is, therefore, how shared sets of ideas come into being, and change over
time.
We believe that ideas cannot be separated completely from their context or
relationship to various political interests. Even when a potentially challenging
idea is introduced, its power can be weakened, destroyed or redirected to other
purposes than those originally intended. Here, we clearly see the relevance and
the wisdom of the quotation at the head of this chapter, because the question is
not necessarily ‘whether one can make words (ideas) mean so many things’, but
rather, ‘which is to be master’. The role of ideas cannot be separated or analysed
in isolation from considerations about the power relations of the social system
that we wish to study.
The social system that this book explores is a new and different arena for the
literature on the role of ideas, and we hope that by focusing on this particular
social system we may not only enhance our understanding of development
policy, but also make some contribution to theory in general.
and the use of them is dependent upon both material and ideational factors
(Strange 1997). Relational power – as the power of A to get B to do something
they would not otherwise do – does not have to be legitimate in any sense. Its use,
however, is still dependent upon the interplay of material conditions, interests and
ideas; for without ideas there will be no interests, and the wielding of relational
power is built upon interests. Similarly, without interests there are no meaningful
material conditions upon which to enforce one’s relational power. And, finally,
without the material conditions there is no framework of reality in which to act at
all. Structural power is power over the ‘order of things’ and the beliefs sustaining
the ‘order of things’. The structural power of the institutions within the multilat-
eral system is legitimate to the extent that states, firms, NGOs and people accept
it. This way of reasoning suggests that it may be possible to form a bridge
between material and ideational explanations.
To continue further we need to draw on the constructivist perspective. This
perspective implies that the structures of the multilateral system are determined
by shared ideas to a larger degree than by material conditions, and, equally
important, that the identities and interests of the actors within this system are
constructed by social interaction around competing interpretations of different
ideas. However, the relationship between ideas and power in the multilateral
system is not only a question of shared ideas, but equally of opposed and
contested ideas; we must still come to grips with the realities of power. Any
framework for understanding the relationship between power and ideas in the
multilateral system must also take seriously the basic premise of political realism:
outcomes cannot be properly analysed in disregard of the distribution of power.
Equally important, since we here are talking about ideas as collective images, we
need to establish a clear connection between ideas and institutionalization. This
bridge we find in the neogramscian approach and Gramsci’s understanding of
hegemony as a structure of dominance.2 Here, the question of whether the domi-
nant power is a state, a group of states or some other combination of public and
private power is left open. What is of greater importance to this interpretation is
that the position of hegemonic power is sustained not merely by force, but by
broadly based consent through the acceptance of an ideology and of institutions
consistent with this structure. In other words, a hegemonic structure of world
order is one in which power primarily takes a consensual form. We reserve the
term hegemony for a consensual order, whereas dominance refers to a prepon-
derance of material power.
In such a consensual order, institutions and an institutionalized multilateral
system play an important role because they provide ways of dealing with conflict
so as to minimize the use of force. There is, of course, enforcement potential in
the power relations that underlie any social structure, in the sense that the strong
can discipline the weak if they think it is necessary to protect their interests.
However, also more nuanced mechanisms can be used for that purpose. The
strong may make concessions that will secure the acquiescence of the weak in
their leadership. One way of achieving this is for the strong to express their lead-
ership in terms of a constructed ‘global good’, rather than overtly serving their
Ideas and institutions: who is framing what? 209
own particular interests. It is precisely here that the institutions in the multilateral
system may become the locus for such a hegemonic strategy, because through
the ideas and policies they embody they lend themselves both to the representa-
tion of diverse interests and to the universalization of those ideas and policies.
The current struggle over the hegemonic interpretation of governance is but one
example of such processes.
In short, our argument is that a neogramscian perspective has much to offer
for an understanding of the relationship between power and ideas in multilateral
institutions, not least because of its emphasis on the consensual aspect of hege-
mony. However, for a framework that seeks to interpret the relationship between
power and ideas in multilateral institutions, it is but one part of the larger equa-
tion. If we accept the central premise that both ideas (shared and contested) and
the distribution of power (ideational and material) matter, then we need in addi-
tion to study the interplay between actors and structures in the various power
games that take place in relation to these material and ideational struggles in
multilateral institutions.
One possible approach to this issue is to apply elements of structuration
theory, which opens the way for conceptualizing agents (actors) and structures as
mutually constituted or co-determined entities (Giddens 1979; 1984). Social
agents are seen as reflexive and able to gather and accumulate knowledge. They
have an advanced view of the world, and they are able to evaluate their actions
in light of their knowledge and experience. Social agents are therefore constantly
performing actions – often intentionally, but also sometimes unintentionally –
which ensure that social structures are reproduced. ‘Structure’, in this sense, is
rules and resources, recursively implicated in the reproduction of social systems.
Structures exist as memory traces, the organic basis of human knowledge, and as
instantiated in action. ‘A structure constitutes a structure only because of the
behaviour of the agent, which in turn is intimately bound up with knowledge of
the structure’ (Buzan et al. 1993: 107).
Within multilateral institutions there are complex sets of social structures,
sometimes unobservable, that shape the behaviour of the various agents (state
and non-state) involved in the power games that take place in these institutions
concerning the use of ideas. Such structural constraints are observed, not neces-
sarily because of the sanctions imposed on deviants, but because of the reflexive
capacity of the agents concerned to see what would happen in a context of
interaction where such structures did not exist. Structural constraints are effec-
tive only as long as they are reproduced by the action of agents. The
circumstances of social constraint where individuals have few or no alternative
paths of action should not be equated with the dissolution of action as such,
because social constraints do not operate like forces of nature. To have no choice
is not quite the same as being driven irresistibly and uncomprehendingly by
mechanical forces. Rather, within all social systems (multilateral institutions
included) power creates regularized relations of autonomy and dependence
between agents in contexts of social interaction. Nonetheless, in all dependent
relationships, and especially hegemonic relationships, those who are subordinate
210 Morten Bøås and Desmond McNeill
can influence the activities of their superiors. Power will always be expressed in
the duality of structure, where resources are structured properties of social
systems, drawn upon and reproduced by knowledgeable agents during the course
of social interaction.3
(i) the legal and institutional foundation of the world trading system;
(ii) a forum for multilateral trade negotiations;
(iii) a centre for the settlement of disputes.
The summary table gives some support to our general hypothesis. Our
interest is especially in what might be called ‘the economic–technocratic nexus’.
All multilateral institutions are, of necessity, technocratic. In order for ideas to be
used in such organizations they must be translated into terms which can be oper-
ationalized. This, we suggest, (together with the importance of achieving
consensus), tends to involve a process of ‘depoliticization’, and a tendency for
economics to become the dominant discipline. In short, we suggest that ideas
that challenge the conventional wisdom become distorted as a result of a series
of related pressures; depoliticization and ‘economization’, which may be, but are
not necessarily, linked to neoliberal ideology and the material interests of those
countries with most power in the system.
A strong claim is thus that the most powerful multilateral institutions, in terms
of the resources at their command, are controlled by the donor countries (and
most particularly the USA), promote neoliberal ideas, and are dominated by an
economic perspective. Any challenging ideas that arise, if not directly refuted,
are distorted, in keeping with this worldview (and world interest). A weak claim is
that multilateral institutions are necessarily consensual and technocratic; and
that new ideas are diluted and distorted in the process of gaining broad accep-
tance for them, and putting them into operation. The contributors to this
volume occupy varying positions along this range. To present and support our
own position, we need first to elaborate further on key components of the argu-
ment: the role of USA, and the meaning of neoliberalism; the place of
economics and its relationship to a technocratic approach.
The United States – even though its powers vary from one institutional
context to another (e.g. the World Bank vs. the ADB) – is, without doubt the
hegemonic power within this system. It might be argued, with respect to the role
of the United States, that multilateralism under the control of a hegemonic
power is not much different from disguised bilateralism (see Ascher 1992).
However, this would in our view represent a huge simplification of the complex
power structures and relationships that multilateral institutions represent. And
none of the contributions to this volume suggest such an approach. What does
seem to be the case is that strong member countries (and even NGOs with the
Ideas and institutions: who is framing what? 213
It is here that the issue of knowledge and the political neutrality of a certain
type of economics enters the frame, because the World Bank’s ‘legitimacy rests
on the claim that its development advice reflects the best possible technical
research, a justification readily cited by borrowing governments when imposing
Bank policies on their unwilling populations’ (Wade 2001b: 128). The produc-
tion of knowledge in multilateral institutions is therefore produced within a
frame of reference that embeds certain cognitive interests, meaning that knowl-
edge becomes an instrument, a tool, for the identification of manipulative
variables (Nustad and Sending 2000).
There is clearly an enforcement potential in the power relations that lie under
the social structure of multilateral institutions, but most often this enforcement
potential takes the form of more nuanced mechanisms than simply an open
disciplining of the weak by the strong. Even though nearly all the contributions
to this volume in one way or another point towards the strong role played by the
United States in multilateral institutions and the importance of understanding
the hegemonic position of neoliberalism in the policy debates in multilateral
institutions, we find little evidence for a conspiracy approach to the ‘who is
framing what?’ question. Neoliberalism as the current dominant economic
paradigm certainly is important with respect to how the debates around specific
ideas are framed in multilateral institutions. To that extent, we agree with
Taylor’s contribution. The main contention of his chapter is precisely that ideas
centred on notions of ‘good governance’ have been promoted by the IMF as
part and parcel of the neoliberal order and are attempts to reconfigurate territo-
ries in order to make them more attractive to international capital.10 The United
States through the US Treasury is the most important player in most of the
multilateral institutions that we have dealt with in this volume, but to suggest that
the power of a specific idea or interpretation of an idea is simply a matter of
whether or not it is supported by the US is by far too simple an explanation. As
is apparent both from Taylor’s contribution and others in this volume, neoliber-
alism seems to have become some sort of common sense during the two most
recent decades. Theories opposed to the wisdom of neoliberalism have often
been treated during this period ‘with the bemused condescension usually
reserved for astrological charts and flat-earth manifestos’ (Cardoso and Helwege
1992: 8). This implies that the role of neoliberalism as the dominant economic
paradigm in most multilateral institutions should be approached as what Pierre
Bourdieu (1977: 164) entitles doxas:
[S]chemes of thought and perception can produce the objectivity that they
produce only by producing misrecognition of the limits of the cognition that
they make possible, thereby founding immediate adherence in the doxic
mode, to the world of tradition experienced as a natural world and taken for
granted.
This concept of doxa can be equally applied not only to neoliberal economics,
but perhaps to economics in general. The dominant liberal approach to the
Ideas and institutions: who is framing what? 215
However, when we look at the late–comers to an idea, we often find that they
have learned little from the experiences of those institutions that have been
concerned with the idea for some time. This observation becomes strikingly
apparent if we compare the experience of sustainable development in the World
Bank and the WTO (see Chapters 6 and 7 respectively). Wade’s analysis is a
history several decades long that takes us through three paradigmatic shifts from
‘frontier economics’ (prior to 1987), ‘environmental protection’ (up to early
1990s) and ‘environmental management’ thereafter. However, as we can see
from Bøås and Vevatne’s contribution, there is very little evidence that the WTO
has learnt from the World Bank experience. Rather, it seems that the WTO,
when finally forced to confront the issue of environment and sustainable devel-
opment in 1995, adopted an approach quite similar to that of the World Bank
prior to 1987 (i.e. ‘frontier economics’). Both the internal debate in the WTO
and the external debate with its critics in the NGO community bear a striking
similarity to those in and around the World Bank over a decade before. It was
thus only rather a general notion of the idea of sustainable development that
‘travelled’, not the whole debate surrounding it. Yet in other cases communica-
tion between multilateral organizations can be rapid and effective. There is
considerable contact between different and potentially competing parties, not
only through commissions, conferences and regular meetings, but also through
staff members changing their position from one institution to another. But the
extent of this varies considerably. For instance, there seems to be much more
movement of people between the World Bank and the regional development
banks than between UN agencies and institutions like the IMF and the WTO.
The latter two seem to have had a much greater ability to insulate themselves
from on-going policy debates elsewhere in the multilateral system than the other
institutions that have been discussed in this volume. Indeed, one can speak of the
different cultures of multilateral organizations – varying even within one family
(e.g. the IBRD, the IFC and the IMF), and to a greater extent between them (e.g.
ILO and WTO). Each has its own identity, socially constructed through the
practice of specific multilateral institutions (an obvious example is the WTO
secretariat: see Chapter 7). These are also manifest in the publications of these
institutions, for example the Human Development Report, the World Development Report
and the annual reports of institutions like the ADB. These are flagship publica-
tions, presenting an image of independence and conclusions based on empirical
evidence and the best technical research available. They define the ideas the
institutions are most eager to project in the near future.
Each of the multilateral institutions has its own identity – even if it does
change over time, and is perceived differently from inside and outside. As some
of the chapters have suggested, those working within these organizations are
seeking to fulfil perhaps conflicting roles – in keeping with the identities of the
organization for which they work and their own sense of professional purpose.
And multilateral institutions are not static institutions; they do change, and so do
the collective identities which they embody; and ideas play an important role in
these processes of change.
Ideas and institutions: who is framing what? 217
However, for a framework that seeks to interpret the role of ideas in multilateral
institutions, it must be combined with perspectives that enable us to design more
precisely defined actor-oriented studies.
This point takes us back to the issue of the relationship between realism,
constructivism and neogramscianism raised in our introduction to this collec-
tion. Our major point in this regard is that in all social systems (multilateral
institutions included) power creates regularized relations of autonomy and
dependence between agents in contexts of social interaction. However, those
who are subordinate can still influence the activities of their superiors. It is here
that we see the need to revisit the arguments made by James Hentz in Chapter
14. Here Hentz draws our attention to several theoretical points of importance.
First, by utilizing Escobar (1995b) and Ferguson (1990) he draws our attention
to how ideas are marketed as technical solutions to developmental problems.
Constructivism, with its emphasis on the social construction of politics, can help
us understand the construction of political issues as technical solutions (i.e. the
economic–technocratic nexus), whereas realism helps us to expose the political
interests and power relationships that underwrite such constructions. The basic
point, as Hentz argues, is that while the constructivist critique is essential for
understanding the role of ideas, it lacks a clear appreciation of power. Realism
can therefore complement the ideational focus of constructivism. The impor-
tance of understanding the ‘lock-in’ process is evident in several of the
contributions to this volume, but perhaps most strikingly in Taylor’s analysis of
IMF and ‘good governance’: the political implications of locking into the liber-
alization process as legitimate reforms aimed at normalizing the national
political economy. He interrogates the idea of good governance as promoted by
the IMF as a value-free and correct picture of the world. In this argument, the
three main theoretical propositions highlighted in the introduction come to the
forefront and speak to each other: constructivism helps us understand the
process of social construction of governance; realism exposes the power rela-
tions not only beneath this process of social construction, but also how this
interpretation of governance becomes locked in at the country level; and
neogramscianism elucidates the larger macrosocio-economic environment in
which these processes take place.
In summary, we favour an intermediate, and somewhat eclectic approach,
which may be contrasted with two others:
Alternative 3 is the more complex, mixed approach which we favour. Policies are
the outcome of interplay between institutions and ideas; and each of these is
influenced both by material interests and norms.
This implies that one must take account of several different interconnections –
between interests and norms on the one hand, and institutions and ideas on the
other. In brief:
Link 2 Material interests shape ideas: what is agreed – indeed even what is
thought – is strongly influenced by the interests of powerful actors.
Link 3 Norms shape institutions: concepts of the common good and consensus,
as well as bureaucratic rationality, objectivity, neutrality, strongly influence how
institutions are organized and operate.
Link 4 Norms shape ideas: both bureaucratic norms (as above) and also
academic norms (rigour, complexity – perhaps also originality) influence what
ideas emerge and what form they take.
These, then, underpin the relationship with which we are primarily concerned in
this book – between ideas and institutions. To the question: ‘Who frames what in
the making of policy?’, we give no simple answer. It is apparent that ideas can
indeed bring about change in an institution’s policy, but also that institutions
modify and distort ideas.
Central to our argument is the concept of framing – and more broadly the
exercise of hegemonic power. We suggest that powerful states (notably the USA),
powerful organizations (such as the IMF) and even, perhaps, powerful disciplines
(economics) exercise their power largely by ‘framing’: which serves to limit the
power of potentially radical ideas to achieve change. The exercise of framing is
composed of two parts: one, drawing attention to a specific issue (such as the
environment or urban unemployment); two, determining how such an issue is
viewed. A successful framing exercise will both cause an issue to be seen by those
who matter, and ensure that they see it in a specific way. And this is achieved
with the minimum of conflict or pressure. For the ideas appear to be ‘natural’
and ‘common sense’.
Our argument is that neogramscian approaches offer some potential in
helping us to deconstruct such doxas and thereby give them their proper place
within the wider political economy. In this book this is explicitly argued in rela-
tion to governance and structural adjustment in Taylor’s contribution (see
Chapter 9). As George and Sabelli (1994: 150) put it: ‘Being against good gover-
nance is rather like being against motherhood and apple-pie’. An effective
‘frame’ is one which makes favoured ideas seem like common sense, and
Ideas and institutions: who is framing what? 221
Conclusion
In earlier days, a simplistic model of the development arena had capitalism
pitted against communism: the US on one side and the USSR on the other.
More recently the dividing lines have changed: first ‘state versus market’, and
more recently, perhaps, ‘globalization versus local civil society’. Some would
claim that the conflict is – and has always been – between right and left, and that
this is manifest both in relation to multilateral institutions (the extent to which
they are dominated by the US) and in relation to ideas (the extent to which
neoliberal ideas are dominant). We would support only a much modified version
of this argument. Clearly, a policy such as structural adjustment can be seen as
favouring the material interests of the US; and it can plausibly be argued that it
has been promoted by some (e.g. the IMF) and opposed by others (e.g. UNDP).
But such an argument can hardly be applied to all the ideas discussed here. With
the exception of governance, most of the ideas can only to a limited extent be
directly linked to a neoliberal agenda. Rather, one can postulate a continuum of
ideas, according to the extent to which they can be mapped onto a ‘right–left’
axis. Governance would be at one end; poverty, the informal sector and perhaps
sustainable development in the middle; and social capital and reproductive
health at the other.
We suggest that political interests such as those represented by the US
Treasury do indeed exercise considerable influence, but there are two major
limitations with this account. One is, as just noted, that with regard to most of
the ideas that we have discussed, there is not one clear neoliberal position as
such. The second point is that when ideas are contested, at least in the arena of
222 Morten Bøås and Desmond McNeill
Notes
1 Or in the words of Wendt (1999: 96–97):
The proposition that the nature of international politics is shaped by power rela-
tions invariably is listed as one of the defining characteristics of Realism. This
cannot be a uniquely Realist claim, however, since then every student of interna-
tional politics would be a Realist. Neoliberals think power is important, Marxists
think power is important; postmodernists even think it is everywhere. … Better
instead to differentiate theories according to how power is constituted.
autonomous and responsive only to their own endogenous laws of motion (Ruggie
1983). For an excellent review of Ruggie’s work, both with respect to embedded liber-
alism and in general, see Wæver (1997).
9 The term ‘Washington Consensus’ was coined by Williamson (1993) and refers to the
neoliberal economic thinking which shaped development policy in the 1980s and
1990s. Paul Krugman (1995: 28) later elaborated on Williamson’s concept in the
following manner:
By ‘Washington’ Williamson meant not only the US government, but also all
those institutions and networks of opinion leaders centred in the world’s de facto
capital – the IMF, World Bank, think tanks, politically sophisticated investment
bankers, and worldly finance ministers, all those who meet each other in
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Index