THE WORLD BANK’S EVOLVING CONCEPT OF GOOD GOVERNANCE AND ITS
IMPACT ON HUMAN RIGHTS
Doctoral workshop on development and international organizations
Stockholm, Sweden, May 29-30, 2010
Nicole Maldonado
PhD candidate
University of Bonn
Law school
Germany
TABLE OF CONTENTS
A.
Introduction ............................................................................................................ 3
B.
The Bank’s notion of good governance ............................................................... 3
1.
Origins of the concept........................................................................................... 4
2.
Contents of good governance ............................................................................... 5
Public sector management ................................................................................ 5
b)
Accountability .................................................................................................. 6
c)
Legal framework for development ................................................................... 8
d)
Transparency and information .......................................................................... 9
3.
Corruption........................................................................................................... 10
4.
Participation ........................................................................................................ 11
5.
Résumé ............................................................................................................... 12
C.
E.
a)
Good governance and human rights ................................................................... 13
1.
Human rights in the Bank’s concept of good governance .................................. 13
2.
The World Bank as specialised agency of the United Nations .......................... 19
Conclusion ............................................................................................................. 22
2
A.
Introduction
This paper analyses the World Bank’s notion of good governance and how it has
changed over the past 20 years, focussing especially on the perception of human rights
by the Bank. It is based on a PhD thesis in Public International Law in progress.
The concept of good governance has been on the agenda of development
institutions now for more than 20 years and it has become indispensable in development
co-operation. The term was introduced in the development discussion by a World Bank
study, which focussed on the role of the state in the development process. With this new
view on the state and its overall performance, various new topics became important for
the work of development institutions as the World Bank, e.g. the negative effects of
corruption, the need for participation of the population and also the importance of
human rights.
The new focus on the performance of a state was combined under the term ‘good
governance’. The contents of this concept were adressing the way power is exercised in
the management of a country’s affairs.
This paper analyses the evolution of the World Bank’s concept of good
governance, with special regard to human rights within the good governance agenda.
The role the World Bank plays in the enforcement of human rights will be highlighted.
Finally, short reference will be made to the importance of international economic
agreements for human rights.
B.
The Bank’s notion of good governance
This section of the paper describes the origins of the debate on good governance
and the evolution of the concept since its emergence more than 20 years ago. Special
attention is put on the contents of good governance and the expansion of the concept to
principles as the fight against corruption and participation. The role of human rights
within the good governance agenda will be discussed separately in the third section of
the paper.
3
1.
Origins of the concept
The concept of good governance emerged at the end of the 1980s, at a time of
unprecedented political changes. The collapse of the Berlin wall on 9th November 1989
set off the desintegration of the Soviet Union which as a consequence thereof also led to
the decay of the political and economic alliances of the Eastern bloc. These political
changes created the breeding ground and gave way for a serious discussion on how a
state has to be designed in order to achieve (economic) development, i.e. a discussion
on good governance.
The 1989 World Bank Study “Sub-Saharan Africa – from Crisis to Sustainable
Growth” analysed the development problems in Sub-Saharan Africa. In the 1980s, the
economic performance of the countries in the region had worsened despite the
implementation of the Bank’s structural adjustment programs (SAP’s). The SAP’s
introduced conditionality on a marcoeconomic level into the Bank’s lending activities.
At the same time, the Bank changed its lending policy from project financing to
program financing.1
In the 1989 study the term “governance” was first used to describe the need for
institutional reform and a better and more efficient public sector in Sub-Saharan
countries. The former president of Senegal, Abdou Diouf summarised these findings:
“Africa requires not just less government but better government”.2
The Africa-study defined governance as “the exercise of political power to
manage a nation’s affairs”. The concept of governance was further developed in the
Bank’s 1992 publication “Governance and Development”. In this publication,
governance was defined as “the manner in which power is exercised in the management
of a country’s economic and social resources for development”.3 Two years later, the
Bank substantiated this definition:
„Governance is epitomized by predictable, open, and enlightened policymaking
(that is, transparent processes); a bureaucracy imbued with a professional ethos;
This change was critical because the World Bank’s articles of agreement only provide for project
financing, see art. III sec. 4 (vii): Loans made or guaranteed by the Bank shall, except in special
circumstances, be for the purpose of specific projects of reconstruction or development. The
permissability of program financing is explained by Shihata 1991, pp. 25 et seq.
2
World Bank 1989, p. 55.
3
World Bank 1992, p. 1.
1
4
an executive arm of government accountable for its actions; and a strong civil
society participating in public affairs; and all behaving under the rule of law”.4
More than 20 years later, these definitions still represent the basis of the Bank’s
perception of good governance.
The 1989 study on Sub-Saharan Africa introduced governance without explicitly
referring to the connotation “good”. It was only in the foreword, that former World
Bank president Conable used the term “good governance”, referring to it as a “public
service that is efficient, a judicial system that is reliable, and an administration that is
accountable to its public”.5 In following publications the Bank firstly avoided the
frequent use of the word “good” in connection with governance. According to
Frischtak6 a reason for this reluctance could have been that the use of the adjective
“good” referred to a subjective view on the performance of a state and that
interpretation of the meaning of “good governance” could vary.7 Nevertheless, the Bank
started using the term “good governance” more and more frequently.
2.
Contents of good governance
Public sector management, accountability, a legal framework for development
and transparency and information have been initially identified as core elements of
governance. While the topic of public sector management (PSM) had already been on
the agenda of the World Bank before, the other elements of governance had to be filled
with content. Furthermore they had to be reconciled with the prohibition of political
activities laid down in the Bank’s Articles of Agreement (see below).
a)
Public sector management
The issue of public sector management referred to the classical field of work of
the Bank, i.e. public expenditure management, civil service reform and public
enterprises, to sum things up: improvement in efficiency of public institutions. Special
attention within the topic of public expenditure management was put on public
investments, budget planning concerning operation and maintenance, and on
strengthening the budgeting process. Civil service reform in context of the good
4
World Bank 1994, p. vii.
World Bank 1989, p. xii.
6
Frischtak, p. 11 ref. 11.
7
See also van Dok who discusses the „moral in the title“ in good governance.
5
5
governance agenda meant in principle assistance to borrower countries in their efforts to
“redimension” the state and “help the affected borrower countries manage less but
manage better”.8 Reform of public enterprises included privatisation of those public
enterprises that were not commercially viable, improving the market and competitive
conditions, and the reform of co-operation mechanisms between public enterprises and
the governments in order to strengthen the management of public enterprises and so
give less opportunity for politically motivated influence.
This concept of public sector management reform are still relevant today. The
Governance Indicators of the World Bank Institute define “government effectiveness”
as: “measuring the quality of public services, the quality of the civil service and the
degree of independence from political pressures, the quality of policy formulation and
implementation and the credibility of the government’s commitment to such policies”.9
b)
Accountability
Accountability, by contrast, constituted an innovation in the Bank’s sphere of
action and has been described as being “at the heart of governance”. 10 In the beginning
of the governance debate, accountability was described as “holding public officials
responsible for their actions”.11 Another description of the contents of Accountability
was: “Accountability (...) has to do with holding governments responsible for their
actions. At the political level it means making rulers accountable to the ruled, typically
through the contestability of political power”.12
According to these definitions, accountability works in two directions: On one
hand there is an internal effect within public institutions regarding financial
accountability and the creation of internal control mechanisms. This is very much
related to the topic of PSM as explained above. On the other hand, there is also an
external effect of accountability which relates to involvement of the population. The
internal effect of accountability is referred to as “horizontal accountability”, the external
effect as “vertical accountability”.
8
World Bank 1991, p. 14.
Kaufmann et al. 2008, p.7.
10
World Bank 1994, p. 12.
11
World Bank 1992, p. 13.
12
World Bank 1994, p. 12.
9
6
In principle, the Bank followed Hirschmann’s concept of “exit and voice”,
which had been further developed by Paul who applied the concept on accountability.
In this context, “exit” means the possibility of the public to gain access to other servicesuppliers in case the state does not provide for the services in a satisfactory way.
“Voice” refers to the possibility of the public to influence the quality and quantity of
public services by e.g. improving access to information and involving nongovernmental organisations (NGOs). This meant that in contrast to the Bank’s policies
in the era before good governance, the quality of a government with regard to the
performance in satisfying the needs of the population was put up for discussion, not
only its economic performance. Especially the “voice”-mechanisms gave way for a
more participatory approach to development by focussing on access to information and
including NGOs as partners in the development process. This more participatory
approach was pursued from the very beginning of the governance debate and can be
seen as the underlying principle of the Bank’s governance agenda: „The global trend is
toward less authoritarian modes of exercising power“.13
In the past 10 years, the debate on accountability concentrated very much on
efforts to describe and concretise the content of “vertical accountability”, i.e. the way
how the population can be involved in decision-making processes. While in the
beginning of the 1990s the main focus of the Bank’s work on accountability was on
providing access to information, in recent years the importance of parliament as a major
tool to enable citizens to participate in the political processes was stressed. Also, the
double function of parliament in the so called “chain of accountability”14 was
highlighted: On one hand, parliaments strengthen horizontal accountability within
public institutions, especially by controlling the government; on the other hand, they
also provide platforms for citizens to address their representatives in a vertical way to
denounce deficits.15
A very import topic related to accountability is the fight against corruption.
Since corruption has become an independent issue within the debate on good
governance it will be discussed separately below.
13
World Bank 1994, p. 13.
Stapenhurst/ O‘Brien, p. 1.
15
Stapenhurst/ O‘Brien, p. 2.
14
7
c)
Legal framework for development
The legal framework for development represents the Bank’s rule of law
approach in governance. Schlemmer-Schulte described the relation between the rule of
law and good governance as follows: “The rule of law represents the legal dimension of
good governance by a country”.16 For the Bank an economic environment where
business risks may be rationally assessed and the cost of transactions are lowered
requires stability and predictability.17 Both aims will only be achieved in an appropriate
legal system. Also, the Bank stressed that the law could make “an important
contribution to an equitable and just society and thus to prospects for social
development and poverty alleviation”.18
Within governance, the Bank distinguished between two dimensions of the rule
of law: an instrumental one referring to the formal basis of the system of law, and a
substantive dimension which included the contents of laws and legal concepts such as
justice, fairness and liberty.19
In the first years after the introduction of good governance, the Bank focussed
very much on the creation of laws, their implementation and application – especially
with regard to their impact on private sector development -, and the communication of
rules to the public. This focus changed in the following years as the World Bank began
to work more in the field of dispute settlement mechanisms.20 The Bank also started to
concentrate more on the individual rights of the citizens.
Summing up, judicial reform within good governance is now being understood
as a comprehensive approach that encompasses the improvement of the judicial system
– including dispute settlement mechanisms -, legislative reforms, and the improvement
of legal education and training. It is noteworthy that the Bank’s engagement in judicial
reform - as far as substantive law is concerned - for a long time ignored the whole sector
of criminal law. Even after former World Bank president Wolfowitz -together with the
United Nations- initiated the Stolen Asset Recovery (StAR) Initiative in 2007, criminal
16
Schlemmer-Schulte, p. 697.
World Bank 1994, p. 23.
18
World Bank 1994, p. 23.
19
World Bank 1992, p. 30.
20
See World Bank 2004, p. 3.
17
8
law reform has not been put high on the agenda, but it is mentioned as only one means
along many others to fight corruption.21
The judicial reform approach of the World Bank was not only further expanded
as regards content; the use of terminology also started to change around 2004. Since
then, instead of “judicial reform” the Bank is using more and more the term “rule of
law”.
d)
Transparency and information
The issue of transparency and information within good governance took account
of the fact, that “a competitive market economy requires that economic actors have
access to relevant, timely, and reliable information”.22 According to the World Bank,
transparency and information would be beneficial especially regarding three areas:
economic efficiency, prevention of corruption, and in the analysis, articulation and
acceptance of governmental policy choices.
Economic efficiency was particularly understood as the access to information on
governmental economic policies and as transparency of the decision processes in this
regard. It was foremost the private sector who would benefit from this understanding of
economic efficiency. But the Bank also stressed that the population should be given the
possibility to influence the decision-making processes. Looking at the financial crisis
we have to face actually, it is noteworthy that the Bank already at that time highlighted
the need for improved transparency and information of the financial markets at the very
beginning of the debate on governance.23
With regard to corruption the Bank pointed out that the main weapon against
corruption was to reduce the opportunities for it to a minimum. Although the Bank
referred to the issue of corruption in this context without mentioning possible problems
arising from addressing this issues with regard to its mandate, it can not be ignored that
corruption has been a very delicate issue for the Bank until the late 1990s. Corruption
until then was perceived as a highly political issue that could not be tackled because of
21
Cf. World Bank 2004, p. 9, listing 60 areas of law for Bank engagement without mentioning any
section of criminal law.
22
World Bank 1992, p. 39.
23
World Bank 1992, p. 40.
9
the Bank’s articles of agreement. According to the Bank, the challenge to improve the
interaction between government and the public in terms of rendering more transparency
in the decision-making processes had to be addressed not only by the state concerned; a
very important role in this process was rather given to civil society institutions as e.g.
labour unions, universities and, with a special focus, the media. For the Bank the
freedom of the press was an essential condition for enabling the public debate.
Thus, in principle, the Bank’s approach to transparency and information was
highly oriented towards the development of the private sector, i.e. it was in particular
economically oriented. But the Bank’s approach in this regard also encompassed from
the very beginning the issues of corruption and freedom of the press, which broke new
grounds in the Bank’s work. The approach also paved the way for the introduction of
these issues - which where until then perceived as too political for the Bank - into the
Bank’s agenda.
3.
Corruption
As already mentioned above, the issue of corruption has been conceived as a
very delicate topic to deal with for the World Bank, it was nearly considered a “taboo
subject”.24 Until the 1980s, corruption was not mentioned in the Bank’s development
strategies as it was perceived as too political, even though it soon became very clear that
corruption had a negative effect on an country’s economic development and therefore
would fall inside the Bank’s mandate.25 With the introduction of the Bank’s structural
adjustment programs, the fight against corruption became an increasingly important
topic for the Bank.26
Within the Bank’s good governance agenda, the fight against corruption was
mainly discussed as a matter of transparency and information. But it was always also a
cross-cutting theme, touching the subjects of accountability, the rule of law and PSM.
The Bank defined corruption as “the abuse of public power for private gain”. 27 Thus,
corruption encompasses two elements: first, a moral abjection in terms of misuse of
power, and second, as a result, the substantive or incorporeal gain.
24
World Bank 2007, p. 38.
Forsythe, p. 340.
26
The first studies of the World Bank on corruption related to the transition countries in Europe and
Central Asia, particularly analysing the phenomenon of “state capture“.
27
World Bank, WDR 1997, p.102.
25
10
During the first half of the 1990s, the Bank realised that corruption was a much
bigger obstacle to development than initially anticipated. In 1996, former World Bank
president Wolfensohn announced that the Bank would focus more on the fight against
corruption by assisting countries to combat the “cancer of corruption”. In 1997, the
Bank launched its “comprehensive anti-corruption policy framework”; in the same year
the World Development Report focussed mainly on the issue of corruption and nearly
all loans granted by the Bank in that year for PSM contained specific targets with regard
to the fight against corruption.28 Therefore, the year 1997 marked a starting point for the
Bank’s enhanced engagement in the fight against corruption. From the end of the 1990s
on, the fight against corruption became more and more an independent topic on the
Bank’s agenda. As already mentioned, in 2007 former Bank president Wolfowitz and the
United Nations initiated the Stolen Asset Recovery (StAR) Initiative, which aims to
return those state assets stolen through corruption. Also in 2007 “Governance and AntiCorruption Strategy” made clear that governance and anti-corruption are not
synonymous because corruption would also occur in the private sector while
governance was looking at the performance of the state and public institutions. Former
World Bank president Wolfowitz stressed: “Improving governance is certainly about
fighting corruption, although it is also about much more than fighting corruption”.29
4.
Participation
Another issue that is related to the World Bank’s notion of good governance is
principle of participation. Although the Bank did not see this principle as an
independent element of its governance definition, it became clear at a very early stage
that good governance would require a more participatory approach to development. This
more participatory approach had been already highlighted in the Bank’s 1989 Africa
study. Now participation was perceived as being intrinsic to good governance.30
For the Bank, participation is the process through which stakeholders influence
and share control over priority setting, policy-making, resource allocations and access to
public goods and services. That means that all civil groups involved in the development
process have to be included. The importance of participation was highlighted with the
Bank’s “Comprehensive Development Framework” in 1999, in which the aim of
28
World Bank, annual report 1997, p. 79.
Wolfowitz, Paul, speech at the International Conference on Governance and Fighting Corruption,
Brussels, 15 March 2007, available at: http://go.worldbank.org/FRQQCB8740.
29
11
“country ownership” called for participation of all relevant groups in the elaboration of
a national development strategy.
Participation is also a cross-cutting theme throughout good governance.
Especially accountability and transparency and information focus on the participation of
the population. As already discussed above, accountability stresses the importance of
parliament in the participatory process. This reference to democratic forms of
governments has been repeated by the Bank, without, however, directly linking its
perception of participation to a specific form of government. For the Bank, participation
is an overall principle, and democratic forms of governments are one possible way to
get to more participation.31 Though the Bank’s participatory approach does not directly
call for a democratic form of government, it is hard to imagine which form of
government could meet with the requirements of the governance agenda, but a
democratic one.
5.
Résumé
The emergence of the good governance agenda constituted a remarkable change
in the Bank’s view on the state. In the 1980s the Bank’s structural adjustment programs
were directed towards macro-economic reforms in borrower countries. However, with
the beginning of the governance debate, the World Bank looked at the state not only in
terms of its macro-economic policies anymore but also in terms of its institutional
performance. In the course of the ongoing debate, participation and the fight against
corruption were added to the good governance agenda while transparency and
information became a cross-cutting theme throughout governance.
Especially with accountability and transparency and information, the Bank
addressed issues that were until then perceived as too political to discuss, e.g.
corruption, participation of the population in the development process, certain political
human rights (freedom of the press, freedom of assembly). In this regard good
governance represents the change of the Bank’s approach to development to a more
participatory one. This section of the paper also showed, that there is a link between
good governance and human rights issues. Questions arising from this connection of the
two concepts will be discussed in the following section.
30
World Bank 1994, p. 42.
12
C.
Good governance and human rights
When the concept of good governance first emerged, it was clearly linked to
human rights issues. The 1989 Africa study highlighted the need for the rule of law and
called for “scrupulous respect for the law and human rights at every level of
government”.32 This demand was based on the idea that the very core elements of
governance emanated from the Universal Declaration of Human Rights, especially from
some of the political and civil rights contained therein. However, the World Bank,
through its General Counsel Ibrahim F. Shihata, did not endorse this opinion in the
beginning of the governance debate by stressing the World Bank’s non-political
mandate, which would not allow the Bank to deal with political and civil human rights.
In this section of the paper the development of the World Bank’s approach to
human rights with regard to good governance will be described by taking into account
the articles of agreement of the World Bank. Subsequently, the position of the World
Bank as a specialised agency of the United Nations will be discussed, taking especially
into account the possible human rights obligations arising from this status.
1.
Human rights in the Bank’s concept of good governance
The articles of agreement command the Bank to refrain from taking account of
political considerations in its work, especially in Art. IV, section 10:33
“POLITICAL ACTIVITY PROHIBITED
The Bank and its officers shall not interfere in the political affairs of any
member; nor shall they be influenced in their decisions by the political character
of the member or members concerned. Only economic considerations shall be
31
See World Bank 1994, p. 13.
World Bank 1989, p. 192.
33
The prohibition of political activities is also relates to two other articles of the Bank’s articles of
agreement:
Art. III, section 5 (b): The Bank shall make arrangements to ensure that the proceeds of any loan are used
only for the purposes for which the loan was granted, with due attention to considerations of economy
and efficiency and without regard to political or other non-economic influences or considerations.
Art. V, section 5 (c): The President, officers and staff of the Bank, in the discharge of their offices, owe
their duty entirely to the Bank and to no other authority. Each member of the Bank shall respect the
international character of this duty and shall refrain from all attempts to influence any of them in the
discharge of their duties.
32
13
relevant to their decisions, and these considerations shall be weighed impartially
in order to achieve the purposes stated in Article I.” 34
The articles of agreement do not contain explicit provisions on human rights or
on a possible inclusion of human rights in the Bank’s work. Art. I (iii) mentions the
improvement of the “ conditions of labour” as a purpose of the Bank. But, even though
the conditions of labour are covered by various international human rights treaties – e.g.
Art. 6-8 of the International Covenant on economic, social and cultural rights, Art. 6 of
the additional protocol on economic, social and cultural rights of the American
Convention on Human Rights, and the ILO Conventions – this allusion to a single
human rights aspect can hardly be interpreted as extending the Bank’s mandate to cover
human rights issues generally.
Having this in mind, it is understandable that in the early 1990s, the Bank’s
internal debate on good overnance focussed very much on the compatibility with the
articles of agreement and the interpretation of the prohibition of political activities as
laid down in the articles of agreement. In this discussion, the Bank followed a narrow
approach, stressing the wording of the prohibition of political activities and rejecting
political considerations in principle. For the Bank, governance encompassed three
different aspects: first, the form of political regime; second, the process by which
authority is exercised in the management of a country’s economic and social resources
for development; and third, the capacity of governments to design, formulate, and
implement policies and discharge functions.35 The first aspect was deemed outside the
World Bank’s mandate as being political in nature.
By interpreting the articles of agreement, Shihata consistently held the view that
with regard to human rights the Bank could only consider social and economic rights.36
In this context it is worth mentioning that despite this interpretation of the articles of
agreement, the Bank started to work on the topics of involuntary resettlement of
The reason for this limitation of the Bank’s work can be found in its genesis. The history of origin of
the Articles of Agreement is described in detail by Yokota, pp. 39 et seq.
35
World Bank 1994, p. xiv.
36
Shihata 1991, pp. 97, 99 et seq., 109 et seq.
34
14
indigenous peoples and the rights of indigenous peoples from the beginning of the
1990s on.37 Both fields of roghts also touch political issues.
With view to good governance, especially the call for accountability turned out
to be difficult to handle with regard to the articles of agreement. Accountability is also
linked to the political structures in a country by alluding to the issue of responsibility of
the governing to the governed. Similarly, the legal framework for development – today
referred to as the rule of law - contains critical issues in this regard, like e.g. questions
relating a country’s criminal law.
However, the ongoing international debate in the 1990s showed that good
governance was strongly related to issues as participation, freedom of expression,
freedom of association, a free press etc. These insights were included in the World
Bank’s work and the Bank’s view on the topic gradually changed. In 1995, Shihata
again tackled the issue of human rights in the Bank’s work with regard to the articles of
agreement. In a legal opinion he renewed his view that the Bank could not engage in the
enforcement of (civil and political) human rights.38 But he also described two situations
in which the Bank could take violations of individual political rights into account: On
the one hand if those violations had a direct economic effect. On the other hand, the
Bank could consider human rights violations according to Shihata if they affected the
Bank’s aim to promote participation of the population and civil society (e.g. freedom of
association, freedom of opinion).
This legal opinion constituted a first step on the way to a less strict interpretation
of the prohibition of political activities, as it allowed the Bank to consider political
rights in some cases. However, Shihata still rejected claims that called for not lending to
countries with a record of human rights violations.39
Anyway, the issue of human rights could not be ignored by the Bank anymore.
The Bank’s changing approach to human rights can be illustrated by the controversies
regarding loans to Indonesia in 1999. In the course of the referendum on the
independence of East Timor, especially those groups and individuals who endorsed
See World Bank operational directive 4.30 –Involuntary Resettlement- 1990, and World Bank
operational directive 4.20 –Indigenous Peoples- 1991.
38
Shihata 1995, pp. 219 et seq.
39
Shihata 2000, pp. 245 et seq.
37
15
independence experienced outbreaks of violence. In a letter to Indonesia’s president
Habibie, former World Bank president Wolfensohn addressed the human rights
violations happening in East Timor. He also called for the cessation of those violations
and for the restoration of peace as a condition for further aid from the World Bank.40
In 2006, General Counsel Roberto Dañino clarified the Bank’s view on human
rights by stating that human rights were “at the very core of the World Bank’s
mandate”.41 In his “Legal opinion on Human Rights and the Work of the World Bank”42
he pointed out that the question if the Bank was allowed to include human rights
considerations in its work must not be answered by taking the prohibition of political
activities as a starting point but rather by defining the Bank’s mandate. The prohibition
of political activities itself has to be interpreted in the light of this mandate, i.e. the
purpose to assist member countries in their development processes. That’s why,
according to Dañino, the distinction between civil and political human rights on one
hand, and economic, social and cultural rights on the other hand could not be the crucial
point. The decisive question must rather be if the consideration of human rights issues
has economic effects or economic relevance: “(...) the decision-making processes of the
Bank incorporate human rights and any other relevant input which may have an impact
on its economic decisions”.43 According to Dañino, the Bank could take human rights
considerations into account in three situations: First, if the borrowing country asked the
Bank to do so; second, if human rights violations had an economic effect; and third, if a
human rights violation would lead to a breach of international obligations relevant to the
Bank, such as those created under binding decisions of the UN Security Council.44
With regard to the distinction between civil and political rights on one hand, and
social, economic and cultural rights on the other hand, Dañino took the view that „(...)
there is no stark distinction between economic and political considerations: there is
similarly an interconnection among economic, social and cultural rights on the one
hand, and civil and political rights on the other. Indeed, it is generally accepted at the
40
Letter from World Bank president Wolfensohn to the president of Indonesia, 8 September 1999,
reproduced in Steiner/Alston, 2nd ed., p. 1340.
41
Dañino 2006, Development Outreach, p.30.
42
Dañino 2006, Legal opinion.
43
Dañino 2006, Legal opinion, p. 5.
44
Dañino 2006, Legal opinion, p. 7.
16
political level that ‘all human rights are universal, indivisible, interdependent and
interrelated’“.45
This broader approach to the consideration of human rights in the World Bank’s
work was also reflected in World Development Report 2006, which focussed on the
issue of “equity” and stressed that the principle of “equity” is very much related to
international human rights.
Although the Bank’s general view on human rights changed as described above,
the question of human rights within the good governance agenda was not influenced by
the new human rights approach straight away. In 2006, former World Bank president
Wolfowitz in the end still followed the same approach that had been described by
Shihata in his legal opinion of 1995: “An independent judiciary, a free press, and a
vibrant civil society are important components of good governance”.46
It was Dañino’s successor as General Counsel of the World Bank, Ana Palacio,
who applied the broader human rights approach elaborated by Dañino on good
governance:
“The concept of governance is widely acknowledged to be indispensable to
sustainable development. That focus would be significantly strengthened by
anchoring it in the international human rights framework. Human rights offer a
clear conceptual and legal framework for connecting the supply and demand
sides of governance in terms of its basic correlative notions of rights and duties.
Acknowledging the relevance of human rights to the Bank and integrating
human rights into its work is an important element in our efforts to step up the
Bank’s promotion of good governance and its global fight against corruption.
Indeed, in substantive terms, these areas share common legal principles“.47
Although according to this view the consideration of human rights issues in the
Bank’s work on good governance doesn’t seem to face any legal hurdles anymore,
human rights are not part of the operative policies of the World Bank. This has been
45
Dañino 2006, Development Outreach, p 31.
Wolfowitz, Paul, Good Governance and Development – A time for Action, Jakarta, Indonesia 2006,
available at < http://go.worldbank.org/OAIRTYW9X0>. (last accessed: 2 May 2010).
47
Palacio, p. 2
46
17
explained by the fact, that integrating human rights in these policies would have to face
opposition from the Bank’s executive directors.48
A slightly different approach to describe the relation between good governance
and human rights takes Daniel Kaufmann from the World Bank Institute.49 He comes to
the conclusion that the concept of good governance constitutes a link between political
and civil rights on one hand and economic, social and cultural human rights on the
other.50 According to Kaufmann, on one hand, empirical studies have shown that
governance, the fight against corruption and the rule of law can only prosper in an
environment in which basic civil and political human rights are respected. On the other
hand, governance also constitutes a precondition for certain economic, social and
cultural human rights. Therefore, within the good governance agenda, certain civil and
political rights have to be considered in order to realise social, economic and cultural
rights. In this sense, the World Bank’s good governance agenda in the past had
consistently included certain civil and political rights as the freedom of press, freedom
of expression, freedom of information and freedom of assembly as well as the right to
participate in the decision-making processes, as a part of and also a precondition for
good governance. This view of Kaufmann makes also sense looking at the World
Bank’s perception of accountability as a means to restrict the abuse of public power.
The above mentioned individual freedoms that are part of the good governance
definition constitute tools in order to achieve accountability.
Kaufmann describes the relation between human rights and good governance by
using empirical evidence. This is indicative of a trend to perceive human rights merely
as an instrument to achieve the goal of economic development, not as a basic obligation
under international law.51 In the same way the Lawyer’s Committee for Human Rights
already in 1995 summarised the relation between governance and human rights as
follows: “The governance debate looks to human rights not for their intrinsic value but
for their instrumental role in creating an environment in which effective and sustainable
economic development can occur“.52
48
Sarfaty, p. 74.
Kaufmann 2004.
50
Kaufmann 2004, p. 18.
51
See Sarfaty, p. 73, who holds the view that this perception of human rights is due to the dominance of
economists within the World Bank.
52
Lawyer’s Committee for Human Rights, p. 61.
49
18
2.
The World Bank as specialised agency of the United Nations
As mentioned above, former General Counsel Dañino hold the view that human
rights violations, which lead to a breach of international obligations relevant to the
Bank, should be taken into account by it. This begs the question: what kind of
international human rights obligations have to be taken into account by the Bank
besides the binding decisions of the UN Security Council? In the following, this
question is addressed with regard to the general obligations arising from the Bank’s
status as specialised agency of the United Nations.
The specialised agencies of the United Nations enjoy a certain autonomy from
the UN. They are brought into relationship with the United Nations by a relationship
agreement with the Economic and Social Council. These agreements differ depending
on the various agencies. The World Bank’s agreement with the UN stresses the
independence of the Bank from the United Nations by requesting the UN „to refrain
from making recommendations to the Bank with respect to particular loans or with
respect to terms or conditions of financing the Bank”.53 Also, the Bank only has to pay
“due regard” to the decisions of the Security Council, i.e. the final decision on the
application of the Security Council’s decision rests with the Bank.
Despite this independence, the Bank remains part of the UN-System.54 It has
also to be taken into account that the Bank’s members have obligations according to the
UN Charter. Art. 103 UN Charter states, that “in the event of a conflict between the
obligations of the Members of the United Nations under the present Charter and their
obligations under any other international agreement, their obligations under the present
Charter shall prevail”. That means, that the Bank is indirectly bound to the United
Nations through the obligations of its member states.55 A direct obligation of the Bank
to respect the UN-Charter beyond the scope of Art. 103 has been rejected.
Nevertheless, some authors, namely Skogly, argue that the independence of the
World Bank laid down in the agreement with the United Nations does not discharge the
Bank from its obligations under international law as contained in the United Nations
53
Agreement between the United Nations and the International Bank for Reconstruction and
Development, 16 U.N.T.S., 1947, pp. 346 et seq, at art. IV, § 3.
54
Tomasevski 1989, p. 82.
19
Charter.56 This leads to the question, if the UN Charter contains human rights
obligations which would have to be respected by the Bank.
It has been discussed if such an obligation for all specialised agencies arises
from art. 57, 55 UN Charter. This must be rejected, as art. 57 UN Charter does not
contain any reference to the purposes of art. 55, not to mention that there are no
obligations concerning the specialised agencies contained in art. 55 either.
The UN Charter mentions human rights in various articles,57 calling for the
“promotion”, “respect” and “observance” of human rights. Regarding all these
references to human rights, especially Art. 1 para. 3, the respect for human rights has to
be interpreted as a main objective of the United Nations.58 The question if this objective
establishes human rights obligations for the member states has been discussed for a long
time;59 today it is generally assumed that the UN Charter contains human rights
obligations for its member states.60
Besides these obligations for the member states, the UN Charter also contains
human rights obligations for the organisation itself, e.g. art. 55 (c):
“With a view to the creation of conditions of stability and well-being which are
necessary for peaceful and friendly relations among nations based on respect for
the principle of equal rights and self-determination of peoples, the United
Nations shall promote: (...)
(c) universal respect for, and observance of, human rights and fundamental
freedoms for all without distinction as to race, sex, language, or religion”.
With regard to the specific human rights commitments - i.e. which rights are
meant by this obligation? - the Charter does not give a clear answer. In describing the
content of the human rights obligations of the United Nations, allusions are made to the
International Bill of Human Rights, including the Universal Declaration on Human
Rights and the two Covenants on Political and Civil Rights and on Economic, Social
55
Shihata 1991, p. 76 et seq.
Skogly, p. 105; Darrow, p. 125.
57
See preamble, art. 1 para. 3; 13 para. 1 b); 55 c); 56; 62 para. 2; 68 and 76 c) UN Charter.
58
Simma 2002, art. 55 (c) ref. 15.
59
Against such obligations, for example, Kelsen 1951, p. 29; Hudson 1948, pp. 105 et seq.
60
Brownlie, p. 556; Shaw, p. 278; Skogly, p. 117; Schwelb, p. 337, 348
56
20
and Cultural Rights.61 These allusions are very consistent in two ways: firstly, the
reference to human rights made in art. 55 UN Charter does not conatin any restriction
with regard to the nature of the rights included into the mandate of the UN. Secondly,
the described contents of the International Bill of Human Rights are based on United
Nations documents.
Therefore it can be said that there are basic human rights obligations for the
United Nations itself as an organisation. The author of this paper agrees with Skogly
that, as a consequence, these human rights obligations also must bind the UN
specialised agencies and hence, the World Bank.62 But, taking into account that these
obligations do not emanate from a direct contractual obligation and also regarding the
specific tasks of the World Bank laid down in its own articles of agreement, it seems
hard to establish an obligation for the Bank to actively promote human rights. However,
in the opinion of the author of this paper, the Bank has to respect its human rights
obligations under the Charter by ensuring that its activities do not constitute human
rights violations.
In this spirit, the UN Committee on Economic, Social and Cultural Rights stated with
regard to art. 22 International Covenant on Economic, Social and Cultural Rights:
„United Nations agencies involved in the promotion of economic, social and
cultural rights should do their utmost to ensure that their activities are fully
consistent with the enjoyment of civil and political rights. In negative terms this
means that the international agencies should scrupulously avoid involvement in
projects which, for example, involve the use of forced labour in contravention of
international standards, or promote or reinforce discrimination against
individuals or groups contrary to the provisions of the Covenant, or involve
large-scale evictions or displacement of persons without the provision of all
appropriate protection an compensation. In positive terms, it means that,
wherever possible, the agencies should act as advocates of projects and
approaches which contribute not only to economic growth or other broadly
61
62
Tomuschat 2003, p. 32; Steiner/Alston/Goodmann 2007, pp. 133 et seq.
Skogly, p. 120.
21
defined objectives, but also to enhanced enjoyment of the full range of human
rights”.63
E.
Conclusion
The developments in the perception of the role of human rights in the Bank’s
concept of good governance as outlined above show, that the narrow approach towards
human rights has changed notably in the past 20 years. At the beginning of the
governance debate, the Bank limited itself to “purely” economic aspects of its work,
thereby following a strict interpretation of the Bank’s articles of agreement. Now it is
accepted that the Bank’s mandate as a development agency is also related to (political)
human rights issues and that human rights have to be considered in the Bank’s work.
The fact that the fight against corruption has been very high on the agenda of the World
Bank for more than ten years now confirms this assessment.
Good governance in the World Bank’s perception comprises certain political and
civil human rights, as freedom of expression, freedom of the press, freedom of
assembly, freedom of information, and participation in political decision-making
processes. However, for the World Bank human rights are not an independent
component of good governance. Human rights issues arise throughout the whole good
governance agenda. In that sense, human rights constitute a cross-cutting topic, like the
issues of corruption and participation.
Furthermore, according to Palacio and Kaufmann, human rights also form the
basis on which good governance can be realised. This leads to the conclusion that good
governance constitutes an “institution” for the enforcement of those human rights that
are directly linked to good governance. In the same way, Tomuschat says: “It is clear,
that a framework of good governance, if actually established, leads to a significantly
increased effectiveness of human rights”.64
63
UN Committee on Economic, Social and Cultural Rights, General Comment No. 2 (1990), UN-doc.
E/1990/23, para. 6.
64
Tomuschat, Human Rights, p. 55.
22
Additionally, according to the author of this paper, the Bank has human rights
obligations arising from the UN Charter. These obligations have to be taken into
account when interpreting the prohibition of political activities in a way that the Bank’s
activities must not result in human rights violations.
However, the Bank’s role according to its mandate is not to promote human
rights in the first place, but to foster economic development in its member countries.
But, by demanding good governance in the borrower countries and predicating its loans
on the commitment to good governance, the Bank plays an important role in the
promotion of human rights, including political ones. The Bank has to accept this
challenge and consider it in its work in a responsible way.
In this regard it is worth mentioning, that the promotion of human rights through
genuinely economic agreements has become an increasingly important issue in recent
years. For example, the Charter of the Association of Southeast Asian Nations
(ASEAN) contains a commitment to “the principles of democracy, the rule of law and
good governance, respect of human rights and fundamental freedoms”.65 Also, the
Southern African Development Community (SADC) treaty contains a clause calling for
its members to act in accordance with human rights, democracy and the rule of law.66
Last but not least the fair and equitable treatment clauses in international investment
agreements give way for the consideration of certain human rights aspects as e.g. the
prohibition of discrimination or the right to access to courts. This non-exhaustive list of
examples show that human rights play an ever increasing role in the international
economic relations.
65
In 2009 ASEAN adopted terms of reference for the establishment of a regional human rights
mechanism, for an introduction to these terms see 48 ILM 1161 (2009).
66
In a SADC tribunal on the expropriation of white farmers‘ agricultural lands the questions of access to
courts and the prohibition of racial discrimination have been intensively discussed and led to the success
of the complaints, SADC (T) Case No. 2/2007.
23
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