Civil Society Participation in World Bank and Inter-American Development Bank Programs: The Case of Argentina

Abstract

During the last few decades, the multilateral development banks (MDBs), together with the International Monetary Fund (IMF), have influenced the most important macroeconomic changes in Latin America. In Argentina, structural adjustment, reforms, and public policies have been intimately intertwined with the agenda and goals of the MDBs since 1987, and particularly since 1989. The increasing importance of these institutions rests not only in their volume of lending, [1] but also in their capacity to direct and support the policies undertaken by the Argentine government and to lend legitimacy to those policies in the eyes of relevant economic actors. The MDBs initiated a series of reforms during the 1990s to make their operations more transparent and participatory and to increase accountability on all levels of implementation and management. Despite this new credo, however, loan negotiation in Argentina has become neither more transparent nor more participatory. The negotiations continue to be carried out exclusively by the executive branch. Furthermore, only some ministries within the executive are part of the decisionmaking process. Since the reform of Argentina's constitution in 1994, the head of the cabinet also participates in the process, but the ministry principally responsible for negotiating and approving loans remains the Ministry of Economy, which also decides whether or not other ministries should be included. The portfolios of the World Bank and the Inter-American Development Bank (IDB) for Argentina grew steadily in the late 1990s, and the composition of their loan portfolios gradually changed. [2] Around 1993, these banks began to introduce second-generation reform loans that involve projects in areas such as health, labor, education, and transportation. These loans usually include components of adjustment and of compensation, the latter intended to soften the most negative effects of the reforms. In Argentina, the trend of simultaneous adjustment and compensation is most observable in the health and labor sectors, where reforms have had a great impact (which we explain in greater detail later). Although the changes in implementation mechanisms in loans are the result of new reforms within the MDBs toward transparency, participation, and accountability, systematic participation of civil society organizations in MDB-funded projects has not been achieved. The World Bank, for example, held a discussion in Argentina with some civil society organizations in an attempt to open its Country Assistance Strategy (CAS). The discussion was held after the strategy had already been approved, however, and fairly incomplete documents were distributed as the basis for the debate. This event seemed to reveal that the Bank's strategy aimed to satisfy certain actors in Washington, D.C., rather than the people actually affected by the loans; participants in the discussion included nongovernmental organizations (NGOs) and grassroots organizations without much power but excluded Argentine political parties and labor unions. The principal discussion focused on the Bank's compensation plans. Most of the organizations present had wide experience in implementing MDB loans but were unfamiliar with the Bank's policies. The incomplete documents and the debate failed to provide thorough information on those World Bank loans related to the country's macroeconomic performance and to struct ural reforms. In an effort to foster participation, the World Bank held several open regional meetings in 1999 with representatives of civil society organizations. The process concluded in a national meeting on 13 March 2000 to discuss various aspects of the CAS (such as health, the environment, and judicial reform) to be implemented henceforth by the Bank. The outcome and effectiveness of this series of meetings will depend on the way in which the Bank and the government deal with the findings. The IDB has also taken up a reform agenda, but the agenda has not been accompanied by extensive action. …