Global Governance and Human Development: Promoting Democratic Accountability and Institutional Experimentation

Abstract

This paper identifies two elements for global governance critical to the pursuit of human development: democratic accountability and institutional experimentation.

The paper stresses the critical importance of organizing effective global institutions for the purpose of human development and briefly discusses some major challenges that can and do affect the international community. It summarizes the theoretical underpinnings for the primacy of institutions as derived from two strands of development theory and the extent towards which these ideas have been acted upon in developing frameworks of global governance. The paper discusses these two principles in light of some of the major challenges that can and do affect the international community as a whole, and some of the decentralized forms of governance that are being developed as developing countries assert themselves in debates on institutional organization. It focuses on the global financial crisis as a case study in the inadequacies of current global governance and the reforms advocated by the Commission of Experts of the President of the United Nations General Assembly on Reforms of the International Monetary and Financial System to redress these failures.

Keywords:

• Human Development
• Economic Development
• Inequality
• Human Rights
• Capabilities
• Health
• Well-being

Notes

See, for example, Chapter Four of The Report of the Commission of Experts of the President of the United Nations General Assembly on Reforms of the International Monetary and Financial System (Commission of Experts, 2009).

The author was involved in the deliberations of the committee and hence the recommendations of this committee will be the major point of focus. Additionally, these recommendations are possibly most pertinent to the issues of United Nations reform, which is of major current interest.

The institutional framework that allowed for this redistributive policy of state actors in East Asia and that prevented rent-seeking and capture is best described as one of ‘embedded autonomy’ in Peter Evans's now classic work (Evans, 1995).

Martin Ravallion (2008) notes that the most compelling recent case of rapid development—that of China—has been marked by a pragmatic experimentation with different policies. ‘In 1978, the Communist Party's 11th Congress broke with its ideology-based approach to policy making, in favor of a more pragmatic approach, which Deng Xiaoping famously dubbed the process of ‘feeling our way across the river.’ At its core was the idea that public action should be based on evaluations of experiences with different policies: this is essentially what was described at the time as ‘the intellectual approach of seeking truth from facts.’ In looking for facts, a high weight was put on demonstrable success in actual policy experiments on the ground … The rural reforms that were then implemented nationally helped achieve probably the most dramatic reduction in the extent of poverty the world has yet seen' (Ravallion, 2008, p. 1).

It should be noted that the IMF has appeared in the recent past to suggest that such limitations on policy space have been reduced. See IMF (2009).

Partly as a consequence of these difficulties, there has been more progress on bilateral trade agreements that again seek to promote a set of universal market rules. After the failure of the Cancun round, US Trade Representative Robert Zoellick explicitly noted that the United States would pursue bilateral free trade agreements with ‘can do’ states to prevent being stalled by a group of ‘won't do’ countries. These bilateral trade agreements often include provisions that require greater integration and fewer policies whereby domestic policy-makers can discriminate between domestic and non-domestic agents. These and other issues are discussed at greater length in UNCTAD's (2007) Trade and Development Report 2007.

Of course, this is simply a necessary and not sufficient condition—the degree to which enhancing developing country participation in global governance enhances human development is dependent also on developing country's responsiveness to their citizenry. Procedural accountability is not the same as substantive accountability.

An alternative perspective is to suggest that global governance should serve to limit the globally imposed constraints on local or national innovation.

See Chasek and Rajamani (2003) and Mason (2008) for more on the importance of the accountability deficit on the lack of progress in climate change legislation.

International institutions have a myriad of voting rules, ranging from effective veto power for a few in the case of the United Nations Security Council, for example, to uneven representation as in the Bretton Woods Twins, to pure majority rules as in the WTO. An analysis of different voting rules and their effectiveness is a vast and complex topic and the focus of detailed study in welfare economics beginning with Arrow's impossibility theorem (Arrow, 1950; and continuing to date). A reasonable précis of this body of work is beyond the purview of this paper. One may note, however, the work of Eric Maskin (Maskin, 2001; Dasgupta and Maskin, 2008), who shows that the majority rule is weakly preferred to all other rules for a wide range of cases.

These include sleeping sickness, lymphatic filariasis, blinding trachoma, leishmeniasis, malaria and others.

Since then, there has been a sharp rebound in capital flows to developing economies, driven partly by the large rise in liquidity in the core economies, which in turn has led to attempts to limit such inflows on the part of the larger economies of the south.

While perhaps hyperbolic, the statement is not without some supporting evidence. For example, Dodd and Cassels (2006) and Mozynski (2005) show that the health targets will not be met at current rates of progress.

Double-majority voting requires that decisions be endorsed by both a majority of member countries and a majority according to countries' voting weight.

One of the functions of such a panel would be to oversee the collection of and dissemination of relevant global statistics. The usefulness of such a body is evidenced by the recent Greek experience in which the extent of budget deficits of the country was hidden.