From Global to Local Governance: Civil Society and the Multilateral Development Banks

Abstract

The World Bank and the Inter-American Development Bank (IDB), as multilateral development banks (MDBs), seem to have become the champions of a governance quest in the developing world. Although international networks of nongovernmental organizations (NGOs) have mounted a persistent and high-profile campaign to make these institutions more accountable, transparent, and participatory, the MDBs are gradually making an effort to change practices and lending vehicles to improve the quality of their advice and the participatory nature of operations. The MDBs are facing an identity crisis, and mandates, operations, and areas of intervention seem to have become a moving target. An unruly world economy, drastic changes in the international arena, sweeping structural reforms in borrowing countries, and pressures from international NGOs have led the MDBs to do some soul-searching. The role of these banks in three arenas of governance is under siege: global economic governance, local governance in borrowing countries, and their own institutional governance structure. These Washington-based institutions entered the 1990s with a renewed agenda that reflects these pressures and attempts to address the frequently conflicting goals that have piled up over the past decades, layer after layer, as they moved from financing bridges to reshaping societies. The studies we present in this special issue of Global Governance are the result of a two-year project funded by the Ford Foundation and carried out by a team of U.S. and Latin American scholars. [1] We aim to shed light on the nature, scope, and real impact of recent changes in MDBs as they affect the new role of civil society in the governance of global and local issues. We specifically attempt to analyze the opportunities and limits that such reforms provide for participation and if and how new participatory practices have influenced the nature of policy processes in borrowing countries and at headquarters. The following articles are the result of case studies that include internal changes at the World Bank and the IDB and the impact of these changes on three big countries in Latin America: Argentina, Brazil, and Mexico. These countries are the largest Latin American stakeholders in both MDBs and thus have the power to move the agenda and their own borrowing programs in ways other countries do not. [2] Th e underlying assumption in the choice of these three countries is that large countries tend to have a more diversified loan portfolio and therefore offer a broader spectrum of issues, actors, and sectors. In undertaking the case studies, project members attempt to investigate how general principles are translated into concrete actions in the chosen countries and seek to draw regional patterns and trends. To unbundle the country studies, we established three criteria to choose sectors for research. The first was to choose sectors and projects that were most relevant for each country. MDBs are currently involved in a myriad of issues in different ways, and the weight of each issue is different in each country according to its social, political, and economic context. So each case was asked to reflect country realities. Thus, although there are projects related to labor law reform, the environment, or indigenous peoples in Argentina, Brazil, and Mexico, the relative importance of these issues varies from country to country. A second criterion was that sectors should be relevant for MDB lending and should involve both structural reforms and compensatory social projects. Finally, as the research began to move along , we identified a major comprehensive sectoral reform in the region that was too attractive to be omitted from any of the case studies: the health sector. This sector presented several attractive features throughout the region. On the one hand, health reforms were in progress as of July 1999 in sixteen Latin America countries with MDB funding. [3] On the other hand, health epitomizes the so-called second-generation reforms that involve both elements of adjustment and compensation to targeted sectors of the poor. …

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