Whose Civil Society? Whose Governance? Decisionmaking and Practice in the New Agenda at the Inter-American Development Bank and the World Bank

Abstract

Governance and civil society are relatively new themes in the discourse of the multilateral development banks (MDBs). As objectives of MDB policy and lending, good governance or modernization of the state and civil society involves a common core of issues for the MDBs: transparency, accountability, effective public sector management, and public participation in making and implementing policy. But governance has a second meaning in the context of MDBs: it refers as well to their self-governance and decisionmaking as organizations. In this essay, I focus on the evolving tensions between the governance policies, their implementation, and the governance processes of the World Bank and Inter-American Development Bank (IDB). The MDBs' increasingly explicit involvement in governance issues responds, in part, to the changing priorities of some of their principal shareholders (the member governments that own and govern them). But they are also complex organizations with their own cultures, leadership, and agendas. The adoption and implementation of new agendas by MDBs follow distinctive and observable patterns. Broadly, the World Bank adopts new lending modalities and mandates on a global level at the initiative of Northern governments and with the encouragement of nongovernmental organizations (NGOs). New mandates and institutions, such as information disclosure and investigative mechanisms, are often contested and evolve as they are implemented. [1] Regional in scope, the IDB typically adopts new mandates and modalities by negotiating a regional agreement, often after a policy is institutionalized at the World Bank. The resulting change is often less dramatic on paper but enjoys greater assent and ownership by the borrowing governments. In governance, the 1DB has built on borrowing member governments' stated commitments to some principles of a democratic and modernized state and to strengthening civil societies. The governance and civil society initiatives follow a decade of changes that arguably made MDB-related decisionmaking less open to broad participation. Negotiations over adjustment policy tended to privilege finance ministries over other government ministries, and economic reform packages effectively reduced the influence of interest groups such as organized labor and small agriculturalists. Second-generation reforms move beyond macroeconomic policy to address institutional and social policy issues. They involve more detailed conditions, specifying policy and implementation, but also endorse principles such as participation and accountability in public life. I advance an interpretation of the adoption and implementation of governance and civil society policies at the two MDBs that rests on four arguments. First, the governance and civil society mandates shift certain decisionmaking authority from boards that represent member governments to management and staff. [2] This shift of authority has been selective and contested in both MDBs, and decisionmaking at board, management, and staff levels can now involve debate and contestation among member governments, management, staff, and civil society organizations (CSOs). Second, whereas the IDB makes its civil society program a component of its modernization of the state initiative, the World Bank ties its civil society work principally to the themes of increasing popular participation, reducing poverty, and improving project performance. The World Bank has a much more extensive engagement with CSOs--principally NGOs--both in project cooperation and in NGO criticism of projects and policies. Third, the World Bank's style is more prescriptive, whereas the IDB allows staff and borrowers to negotiate within broader policy guidelines. World Bank policy on governance provides specific, well-defined directives, linked to economic efficiency. Loans often include detailed conditions. IDB governance policy is defined more broadly, couched in terms of modernization of the state and (according to the IDB) based on a regional consensus. …