Magazine article Brookings Review

Unelected Government: Making the IMF and the World Bank More Accountable

Magazine article Brookings Review

Unelected Government: Making the IMF and the World Bank More Accountable

Article excerpt

Accused of being secretive, unaccountable, and ineffective, both the International Monetary Fund and the World Bank are seeking to become more transparent, more participatory, and more accountable. Yet few attempts have been made to dissect the existing structure of accountability within the organizations. Applying the concept of accountability as understood and refined in political science can illuminate both the existing accountability of the institutions and some of the ways in which they could better be held to account.

Accountability to Governments

Like many international organizations, the IMF and the World Bank face complex problems of accountability that originate in a simple question: to whom should they be accountable and how? Democratic political systems ensure accountability not just by elections but by mechanisms such as transparent decisionmaking, judicial review, and the use of ombudsmen. The aim is to ensure that political actions are predictable, nonarbitrary, and procedurally fair, that decisionmakers are answerable, and that rules and parameters on the exercise of power are enforced.

Unlike a democratically elected government, international institutions cannot claim that voters elect them and can vote them out of office. Nor have they been subjected to the normal restraints politicians face from the checks and balances of government, including the role played by judges, ombudsmen, and the like. Rather, international organizations grapple with an unwieldy structure of government representation that makes ensuring their own accountability extremely difficult. Until roughly the 1980s, the mission of the IMF and the World Bank was narrowly technical, and accountability, accordingly, less of an issue. Today, however, both the Fund and the Bank are being pushed by their most powerful members to perform a much wider range of tasks directly affecting a broad range of people. The need for accountability has thus become more critical.

The IMF and the World Bank were established after World War II as mutual assistance organizations through which all member countries could help each other with postwar reconstruction and development as well as with balance-of-payments problems. The voting and governance structures of both organizations reflect that early vision. Today, however, both lend only to developing and transition countries, and both condition their lending heavily on broad changes in borrowers' economic policies. Indeed, "conditionality" has widened dramatically over the past couple of decades, increasing the intrusiveness of the institutions' work and changing the nature of their relationship with stakeholders. Yet their structure of accountability has remained in many ways unchanged.

In both the Fund and the Bank, the basic structure of accountability works through representatives of governments. At the top of the system, Boards of Governors meet just once a year and are supposed to maintain overall oversight and control of the institutions. The day-to-day work is overseen by executive-directors, representatives of member states who sit on the Executive Boards and perform a dual role. Individually each executive-director represents a country or a group of countries; collectively they manage the organization. They appoint and can dismiss the head of each organization, who in turn controls the management and staff.

The chain of representative accountability is long and imperfect. The links between most member governments and the IMF and the World Bank are extremely weak. Most member governments (with the obvious exception of the United States) are too far removed from the workings of the Executive Board, which in turn exercises too little control over the staff and management. Four elements of this are worth elaborating.

Unequal Representation of Member States

The Executive Boards are the vital link from countries to the IMF and the World Bank. …

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