UNDP Report: “Serious Gaps in Transparency Remain”

1 July 2002

The need for greater transparency by governments and multilateral institutions is a thread running through a report on democracy internationally prepared by the United Nations Development Programme.

The report takes a comprehensive look at the progress toward democracy, and backsliding. It looks at connections between development and democracy, providing exhaustive documentation and broad recommendations. The Human Development Report 2002 is available at http://www.undp.org/currentHDR_E/.

In its broadest conclusions, the report argues “that countries can promote human development for all only when they have governance systems that are fully accountable to all people-and when all people can participate in the debates and decisions that shape their lives.” The report explores the links between democracy and development, finding that they are “not automatic.”

Among many recommendations for improving governance structures and public participation, the word “transparency” crops up often. Improved transparency is suggested as one way to limit the influence of money in politics. The need for greater press freedoms is highlighted, as is the need for more freedom of information laws. Closed budgetary processes are criticized.

Looking critically at multilateral institutions, the report concludes that representation and accountability are “glaring” weaknesses. Efforts to build more inclusive, accountable global governance face two main challenges, according to the report. “The first is pluralism; expanding the space for groups outside formal state institutions to participate in global decisionmaking, particularly in developing mechanisms to change the behavior of private corporations. The second is increasing participation and accountability in multilateral institutions to give developing countries a larger role.” The report includes ideas on how to increase the power of the developing countries in the World Bank and the International Monetary Fund.

Regarding transparency, the report begins by observing, “Although it is a cornerstone of accountability, international financial institutions long argued that they had to limit transparency to protect proprietary and confidential information and to not adversely affect full and frank discussion in their decision-making processes.” The report praises the Bank and the IMF for adopting more liberal disclosure policy, but also finds that “serious gaps in transparency remain.”

The most serious problem, the UNDP report says, is the lack of minutes or records of votes for the Bank and IMF boards. “This means that citizens of member countries (or interested outsiders) cannot hold executive directors or their governments accountable for their policies in the IMF or the World Bank.”

Rebutting the contention that secrecy is necessary to reinforce the frankness of discussion at board meetings, or the ability of members to make decisions by consensus, the UNDP report points to the 1998 decision by the Monetary Policy Committee of the Bank of England to make public its minutes.

The report calls on global institutions to release reports evaluating their operations, noting particularly the IMF’s policy of not publishing the work of its Office of Internal Audit and Inspections. The World Bank should consider disclosing all the work of its Operations Evaluation Department, the report says.

The World Trade Organization should alter its processes, the report finds, to allow for more participation and greater transparency. In this context, the report cites favorably the inclusive processes adopted for the negotiations under the Cartagena Biosafety Protocol.

More generally, the report concludes, “achieving deeper democracy globally will require expanding political space for a range of civil society actors and including developing countries more deeply in the decision-making of international institutions.” The report observes. “Efforts to achieve these goals must confront the realities of global power.”

The report concludes by noting that international institutions are promoting democracy in developing countries, and comments, “…but they will not succeed without the natural corollary: greater democracy, transparency and accountability in thee institutions themselves. This dual process-deepening democracy at the national and global levels-has the potential to transform the lives of the world’s people.” (July 31, 2002)

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ABOUT IFTI WATCH

In this column, Washington, D.C.-based journalist Toby J. McIntosh reports on the latest developments in information disclosure in International Financial and Trade Institutions (IFTI).
Contact: freeinfo@gwu.edu or
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