1 Buira, Ariel , “Reforming the Governance of the Bretton Woods Institutions,” in OPEC Fund for International Development, ed., Financing for Development, Pamphlet Series no. 33 (Vienna: OPEC Fund, 2002), p. 213 – 57. Over the years the democratic representation component of the Bretton Woods institutions—the basic votes given to each member equally—has been perceptibly diminished by capital increases. The basic votes, which were, e.g., 12.4% of the IMF's total voting power at Bretton Woods, are now 2.1%. In response, changes of voting rights and the representation of members by executive directors were demanded as both strongly disadvantage developing countries. The search for a new managing director after Kohler's resignation brought the IMF's selection procedures under unprecedented critique.
2 Ngaire Woods, in “The Challenges of Good Governance for the IMF and the World Bank Themselves,” World Development 28, no. 5 (2000), pp. 823–41, has proposed special majorities or double majorities differentiating between the stakes countries hold in IFIs. More recently, in “Holding Intergovernmental Institutions to Account,” Ethics & International Affairs 17, no. 1 (2003), pp. 69–80, she has advocated greater constitutional, internal, and political accountability of IFIs.
3 On the performance of multilateral development banks, see Raffer, Kunibert and Singer, HW, The Foreign Aid Business, Economic Assistance and Development Co-operation (Brookfield, Vi: Edward Elgar, 1996), pp. 175 ff;on the IDE, see Task Force on Management, Portfolio, Managing for Effective Development: Report of the Task Force on Portfolio Management for the Inter-American Development Bank (Washington, D.C.: IDE, 1993).
4 Raffer, Kunibert , “ Applying Chapter 9 Insolvency to International Debts: An Economically Efficient Solution with a Human Face ,” World Development 18, no. 2 (1990 ), pp. 301ff.; Raffer, K., “International Financial Institutions and Accountability: The Need for Drastic Change,” in Murshed, S. M. and Raffer, K., eds., Trade, Transfers and Development, Problems and Prospects for the Twenty-First Century (Brookfield, Vi: Edward Elgar, 1993), pp. 151ff; available at http://homepage.unvie.ac.at/Kunibert.Raffer; and Raffer, K., “Good Governance, Accountability, and Official Development Co-operation: Analyzing OECD-Demands at the Example of the IBRD,” in Ginther, K., Denters, E., and de Waart, P.J.I.M., eds., Sustainable Development and Good Governance (Dordrecht: Martinus Nijhoff/Kluwer, 1995), pp. 343ff. No other author has taken up this problem. Woods (2003) uses the term “financial accountability” but refers to the political accountability visa vis members that finance IFIs. In my terminology that would be political accountability.
5 Documenting failures of the Bretton Woods institutions has developed into a cottage industry. Among the more widely known books are Caufield, Catherine, Masters of Illusion: The World Bank and the Poverty of Nations (London: Pan, 1998); George, Susan and Sabelli, Fabrizio, Faith and Credit: The World Bank's Secular Empire (Harmondsworth: Penguin, 1995); and Rich, Bruce, Mortgaging the Earth: The World Bank, Environmental Impoverishment and the Crisis of Development (Boston: Earthscan/Beacon, 1994). Arguably even more damaging are internal documents of which the Wapenhans Report is still the best known but by no means only example. See Bank, World, “Effective Implementation: Key to Development Impact,” Report of the Portfolio Management Task Force (Washington, D.C.: World Bank, 1992).
7 Organisation for Economic Co-operation and Development, Development Co-operation, Efforts and Policies of the Members of the Development Assistance Committee: 1997 Report (Paris: OECD, 1998 ), p. 22.
8 Raffer, “International Financial Institutions and Accountability,” p. 158.
10 Gapper, John and Gourlay, Richard , “ Damages Win Leads Lloyds to Rethink Advice ,” Financial Times, September 5, 1995, p. 9.
11 Stiglitz, Joseph , “ What I Learned at the World Economic Crisis: The Insider ,” New Republic, April 17, 2000, pp. 56 – 59.
12 See, e.g., OECD, Development Co-operation, Efforts and Policies of the Members of the Development Assistance Committee, pp. 18ff. or pp. 67ff.
13 International Bank for Reconstruction and Development , “ Toward Sustained Development in Sub-Saharan Africa: A Program of Action ” ( Washington,, D.C.: IBRD, 1984 ), p. 24.
14 Winters, Jeffrey A. , “ Criminal Debt,” Written statement, “Combating Corruption in the Multilateral Development Banks,” Hearing before the Committee on Foreign Relations, U.S. Senate, 108th Congress, 2nd session, May 13, 2004; available at http://foreign.senate.gov/testimony/2004/WintersTestimony040503.pdf. At a conference at Northwestern University in 1999, IBRD staff objected vigorously, claiming that losses to corruption were lower, 20–25% at most.
15 Mosley, Paul, Harrigan, Jane, and Toye, John, Aid and Power: The World Bank and Policy Based Lending, vol. 1 (London: Routledge, 1991 ), p. 24.
16 Wade, Robert , “ From Miracle to Meltdown: Vulnerabilities, Moral Hazard, Panic and Debt Deflation in the Asian Crisis ” (paper presented at East Asia Crisis Workshop, Institute of Development Studies, Brighton, Sussex, June i, 1998); available at http://www.ids.ac.uk/ids/global/Conf7pdfs/wade.pdf.
23 Raffer, Kunibert and Singer, H. W., The Economic North-South Divide: Six Decades of Unequal Development (Northampton, Mass.: Edward Elgar, 2001 ), p. 157.
26 Caufield, , Masters of Illusion , p. 319.
27 IBRD, World Debt Tables 1992–93, vol. 1 (Washington,, D.C.: IBRD, 1992), pp. 10ff (emphasis in original).
28 Krueger, Anne , “ International Financial Architecture for 2002: A New Approach to Sovereign Debt Restructuring ” ( address given at the National Economists’ Club Annual Members’ Dinner, American Enterprise Institute, Washington, D.C., November 26,2001); available at http://www.imf.org/external/np/speeches/2001/112601.htm .
29 See Raffer, , “International Financial Institutions and Accountability”; and Raffer, “Good Governance, Accountability, and Official Development Co-operation.”
32 An e-mail to the AfDB (April 7, 2004, 14:20:06) describing the problem and asking for the legal text was received according to the Bank's computer but has remained unanswered.
34 As recommended by Raffer and Singer, The Foreign Aid Business-, pp. 209ff.
36 Ibid, (emphasis in original).
37 Boughton, James M. , “ Digging a Hole, Filling It In: Payments Arrears to the Fund ,” in Boughton, James M., Silent Revolution: The International Monetary Fund 1979–1989 (Washington,, D.C.: IMF, 2001 ), p. 814; available at http://www.imf.org/external/pubs/ft/history/2001/ch16.pdf.
38 International Monetary Fund, “Executive Board Reviews IMF's Income Position,” p. 3.
41 I first proposed the idea of a court of arbitration to ensure financial accountability for projects in 1993. See Raffer, “International Financial Institutions and Accountability.”
42 I have proposed nearly the same procedure in my model of sovereign Chapter 9 insolvency. See Raffer, “Applying Chapter 9 Insolvency to International Debts.”
43 The IMF would have to waive its immunity, but is empowered to do so.
44 For details, see Raffer, Kunibert, “Introducing Financial Accountability at the IBRD: An Overdue and Necessary Reform” (paper presented at the conference “Reinventing the World Bank,” Northwestern University, Evanston, 111., May 14–16,1999); available at http://homepage.univie.ac.at/Kunibert.Raffer.
45 I recommend ad hoc panels as part of my model of sovereign debt arbitration because in that case there is hope that any standing institution will become severely underemployed once the backlog of cases of debt-distressed sovereigns are solved.
46 Helping poor people from the South with advice and financial resources in the preparation of complaints would be a useful task for NGOs.
49 Designing a fair and humane solution to the sovereign debt crisis in the late 1980s, I proposed this easy way to hold IFIs financially accountable. To the best of my knowledge it was the first time financial accountability of IFIs was brought up. This equal treatment provision has remained a fundamental feature of my sovereign insolvency model. See Raffer, “Applying Chapter 9 Insolvency to International Debts,” pp. 30/ff.; and Raffer, Kunibert, “The IMF's SDRM: Another Form of Simply Disastrous Rescheduling Management?” in Jochnick, Chris and Preston, Fraser, eds., Sovereign Debt at the Crossroads (Oxford: Oxford University Press, forthcoming).
51 Caufield, , Masters of Illusion , p. 319.
53 Boughton, “Digging a Hole, Filling It In,” p. 820.
56 Raffer, “The IMF's SDRM: Another Form of Simply Disastrous Rescheduling Management?”
58 Compared with 1999 this is a steep increase: on April 30 the three largest users “only” accounted for 49 percent, the “big five” for 69 percent . See International Monetary Fund, “Financial Statements, Quarter Ended April 30,1999,” p. 10; available at http://www.imf.org/external/pubs/ft/quart/1999fy/043099.pdf.
59 International Monetary Fund , “ Financial Risk in the Fund and the Level of Precautionary Balances ,” February 3, 2004, pp. 24ff.
60 Rafter, “The IMF's SDRM.”