Academic journal article Global Governance

Private Sector Influence in the Multilateral System: A Changing Structure of World Governance?

Academic journal article Global Governance

Private Sector Influence in the Multilateral System: A Changing Structure of World Governance?

Article excerpt

One of the most significant changes in the multilateral system in recent years is increased private sector participation. There has been a substantial increase in both scale and impact of interaction as new forms of cooperation have emerged. These range from global, multistakeholder initiatives to operational partnerships in individual countries and communities. Some multilateral institutions have a long history of involvement with the private sector, whereas for several others, these forms of cooperation mark a significant departure from the sometimes hostile relationship with the private sector that existed in the 1960s, 1970s, and 1980s.

Most of what has been written about this subject is either concerned with the very normative question of whether increased private sector influence is inherently bad or good, or with issue-specific operationality and efficiency. Critics argue that we are currently experiencing a "privatization" of the multilateral system--a strategy by default, triggered by the financial crisis of the multilateral institutions. Proponents, on the other hand, see new forms of partnerships as one way that multilateral institutions can pursue their tasks more efficiently in a world in which governments of rich countries are not able or not willing to provide the resources necessary for pulling poor countries out of poverty and misery. (1)

These issues are certainly important. However, the changing nature of the interaction between multilateral institutions and the private sector also raises more profound questions about authority and legitimacy in international relations. This is the main focus of this article: how these innovations in the multilateral system relate to and form an integral part of the changing nature of global governance. We contend that the arguments of both the advocates and the critics concerning private sector involvement are based on too narrow views of the sources of influence in and of the multilateral system. To comprehend recent changes we need new conceptual tools for understanding how multilateral institutions work on a day-to-day basis and how this practice influences the role they play in issues of global governance. In this article, we propose a theoretical framework for understanding current changes in the multilateral system that is inspired by insights from neo-Gramscian international relations theory, supplemented by perspectives from constructivist international relations literature.

In the following section, we review different forms of private sector participation in multilateral institutions. We then discuss their causes and review a series of possible consequences, with a particular focus on the UN system. The next section is devoted to drawing up a theoretical framework that may enable us to place these changes within the larger debates about current changes in global governance. The final section discusses implications of increased private sector participation for the authority and legitimacy of the multilateral system. The empirical material for this article was collected during field trips to UN organizations in New York and Geneva in 2003.

Forms of Private Sector Participation

Private sector (2) participation in the multilateral system is not new. However, it is currently characterized by a quantitative increase in joint projects and initiatives as well as by qualitatively new forms of cooperation. One indicator of the quantitative increase is the number of new organizational entities that have been established in the multilateral system since 1995, either directly resulting from partnerships with the private sector or designed to facilitate them. One example is the U.S.$1 billion donation by former AOL Time Warner vice-president Ted Turner to the UN that resulted in two institutional innovations: The United Nations Foundation (UNF), an independent not-for-profit organization directed by an independent board of directors; and the United Nations Fund for International Partnerships (UNFIP), an autonomous trust fund that operates under the leadership of the deputy secretary-general and includes several senior executives of the Rockefeller and Ford Foundations on its board. …

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