Academic journal article Global Governance

The World Bank Group: Championing Sustainable Development Norms?

Academic journal article Global Governance

The World Bank Group: Championing Sustainable Development Norms?

Article excerpt

It is well documented that international organizations diffuse norms, but how and why do they do so? I compare how the World Bank and the International Finance Corporation attempt to spread sustainable development norms through their compliance, mainstreaming, and diffusion efforts. I propose that international organizations spread norms in different ways as a result of their roles within their respective social environments. The International Finance Corporation champions sustainable development by spreading core practices throughout the project finance industry, while the Bank attempts to do so through core and noncore activities. The different approaches raise questions about the capacity of each organization to champion environmental norms: the Bank's multiple activities mixes its environmental message as opposed to the International Finance Corporation's single (recently lessened) environmental voice. KEYWORDS: World Bank, environment, norms, international organizations, International Finance Corporation.

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How do international organizations (IOs) champion new norms? It is well documented that IOs diffuse norms to states. (1) I argue that IOs diffuse norms through everyday practices, but they may also champion ideas through separate endeavors. I examine how the World Bank and its affiliate the International Finance Corporation (IFC), a lender and investor in private sector projects in developing countries, diffuse sustainable development norms in different ways. (2) I propose that IFC champions sustainable development norms by spreading core practices throughout the project finance industry, while the Bank attempts to do so through both core and noncore activities. The different approaches raise questions about the capacity of each organization to champion environmental norms: the Bank's multiple activities lead to a mixed environmental message versus IFC's single (though recently lessened) environmental voice. Arguably, the different approaches are best understood by situating each institution in its social environment, or observing how it interacts with IOs, states, and nonstate actors.

I propose that the Bank continues to have difficulties in consolidating core sustainability norms as witnessed through its compliance, mainstreaming, and diffusion efforts as a result of opposition both inside and outside the organization. Instead, the Bank champions environmental norms through individual initiatives such as carbon financing through its partnership efforts. I suggest that the Bank takes on partnerships outside its core operations because it is the largest and highest profile multilateral development bank (MDB). In contrast to the Bank, IFC is improving its environmental compliance, mainstreaming, and diffusion while championing its core sustainability agenda throughout the project finance industry. IFC's decision to promote itself as a sustainable finance leader emerged from interactions with states, clients, commercial banks, and environmental groups. I argue that IFC's creation of the Equator Principles in 2003 and its shift to new performance standards in 2006 can only be understood through these interactions. (3)

Championing Norms Through Diffusion

It is increasingly recognized that IOs have some degree of autonomy in undertaking their operations. Indeed, IO actions may not conform to state interests and it may be for independent reasons if they do. (4) This highlights a fertile area of research where IOs choose to "redesign" themselves by limiting or expanding their operations. (5) How this decisionmaking process relates to how IOs diffuse norms is of interest here. I propound that IOs diffuse norms throughout their everyday practices but that they may also expand their role to champion noncore activities. As I argue in this article, the Bank continues to have difficulties in implementing sustainable development through its everyday operations even while it chooses to champion global environmental partnerships. …

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