Accountability as justice for the Multilateral Development Banks? Borrower opposition and bank avoidance to US power and influence

Abstract

In 1993, the World Bank created its Inspection Panel, unprecedently opening itself up to being held to account by people negatively affected by its development projects. Within a decade, the other Multilateral Development Banks (MDBs) – the Asian, African, Inter-American Development Banks, the European Bank for Reconstruction and Development and the rest of the World Bank Group would too. The creation of these accountability mechanisms embodies a norm of ‘accountability as justice’ that provides recourse for damaging behaviour through a formal sanctioning process. This article makes two arguments: first, the United States built on its history of using ‘accountability as control’ to advocate using accountability for justice for the MDBs during debates over maintaining their efficiency and effectiveness. As the predominant MDB shareholder, the United States used its power (of the purse) and influence (through its voice and vote) to garner support for the norm despite opposition from borrowers and the Banks. Second, the United States had to resort to these same levers to demand the MDBs reformulate the mechanisms when borrower resistance and Bank avoidance hindered their effectiveness. The United States successfully created the norm but Bank recalcitrance meant the United States had to use the same levers to ensure its effectiveness. The article concludes that change within the Banks is evident but incremental: the spread of the norm amongst the MDBs has changed their governance to include recourse for project affected people with structures in place to strengthen them over time.

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