IMF Meets
Civil Society
Jan
Aart Scholte, Institute of Social Studies, The Hague1
The
International Monetary Fund is an organization of its member countries, and its
primary relationships are with governments. However, it also conducts a
dialogue with civil society. Both the IMF and civil society have much to gain
from developing this dialogue.
Although the IMF is accountable, above all, to the
governments of its 182 member countries, which determine its policies and
operations and provide its funding, inter-changes between the IMF and civil
society have grown considerably in the 1990s. This budding dialogue has much
potential. The development of relationships between the IMF and civil society
can both enhance the effectiveness of IMF programs and encourage democratic
governance.
What is civil
society?
Any discussion of “civil society” needs a working definition
of the phrase. For present purposes, civil society refers to the broad
collectivity of nonofficial, noncommercial, and more or less formally organized groups
that seek in one way or another to reinforce or alter existing rules, norms,
and deeper social structures. The term “civic association” as used in this
article refers to individual elements in civil society (see opposite).
Civil society encompasses tremendous diversity. Civic
associations have widely differing objectives, sizes, memberships, resource
levels, institutional forms, organizational cultures, campaign tactics, and so
on. It is therefore difficult to generalize about civil society.
That
said, we may loosely distinguish three types of civic organizations in terms of
their general approach to the IME One group, whom we might call “conformers:’
broadly endorses the IMF’s present aims and activities. Prominent examples
include the Bretton Woods Committee and the Institute for International
Economics. A second group, whom we might call “reformers” accepts the need for
an IMF-type agency but seeks to change the IMF’s operating procedures and/or policy directions. Leading
campaigners for reform of the IMF include the International Confederation of
Free Trade Unions and the Swiss Coalition of Development Organizations. A third
category of civic associations, whom we might call “radicals:’ advocate a
substantial reduction of the IMF’s operations or even outright abolition of the
institution. Prominent exponents of a radical agenda include the Cato
Institute, from a libertarian position, and the Fifty Years Is Enough
coalition, from a socialist perspective.
Rationales for dialogue
Why might the IMF wish to
engage in relations with the various kinds of civil society organizations just
described? We can identify six general reasons.
First, civic associations can provide the IMF with
information that is useful in policy formulation, implementation, and review. Many of these organizations can collect
and relay political and economic data that would otherwise not be available to
the IMF.
Second, civil society groups can stimulate debate about
policy, particularly by offering alternative perspectives, methodologies, and proposals. Such debate, by
allowing diverse points of views to be heard, can enrich policymaking.
Third, civic organizations can provide channels
through which stakeholders may voice their views on
the IMF and have those opinions relayed to IMF staff. This input can help IMF
officials gauge the political viability of proposed measures or programs.
Fourth, civic associations can play an important role by giving IMF activities legitimacy—or the
reverse. Civil society can thus influence the respect accorded to UI% views,
the success or failure of IMF-supported programs, the resources allocated to
(or withheld from) the institution, and so on.
Fifth, civil society bodies
can serve as agents of civic education, increasing public understanding of the
IMF and its policies. Many civic associations have prepared handbooks,
organized workshops, circulated newsletters, written press articles, maintained
Internet sites, developed curricular material for schools, and so on, about the
IMF.
Sixth, relations between the IMF and civic associations may
reverberate throughout society to have a democratizing effect on the broader
political scene. For instance, civil society
groups that pursue a dialogue with the IMF may also seek greater openness and
debate on other subjects, such as the government budget and other national and
local accounts. In addition, by gaining recognition through their dialogue with
the IMF, civic organizations can become empowered to represent their
constituencies in other forums.
For all of these reasons, the IMF has an important stake in
developing a dialogue with civil society. To be sure, the IMF continues to
maintain its relations first and foremost with
its member states. The challenge is to develop triangular partnerships between
the IMF, states, and civil society that contribute to the development of
effective and democratic policies in a globalizing world.
Overtures for dialogue
The IMF has already taken a
number of steps toward realizing the various potential benefits of dialogue
with civil society. Most of these initiatives have occurred in the 1990s, and
at a generally accelerating rate.
For one thing, the institution has altered its language. Management and staff now regularly speak
of “ownership:’ ”transparency" “good governance:’ ‘stakeholders’ and so
on. This new vocabulary involves more than a public relations exercise. There
is widespread recognition in today’s IMF of the existence of civil society and
of its significance for policy.
As further evidence of this recognition, the IMF has created
several institutional points of contact where civil society can more readily
access the organization. For example, the IMF established an External Relations Department in the late 1980s
and formed a special Public Affairs Division within that department in 1989.
Outside Washington, the IMF has increased the number of countries in which it
has a resident representative, from around 20 in the early 1980s to 68 today.
The IMF has further opened up to civil society by greatly
increasing its dissemination of information, thereby expanding the
opportunities for constructive policy dialogue. It has greatly expanded its
publications program, increased the number of
press releases issued, and set up an elaborate web site. Many official
documents have been released, including the results of several retrospective
policy evaluations. True, considerable IMF documentation is still withheld from
the public—some of it arguably unnecessarily. Nevertheless, the IMF has become
more open than many other monetary authorities and is today more transparent
than was conceivable twenty years ago.
The IMF has also intensified its efforts to meet civil
society organizations (Box 2). For one thing,
the Managing Director and Deputy Managing Directors have increased their public
activities, with more trips abroad, speeches, audiences, and press interviews.
Likewise, the Executive Directors (members of the IMF’s Executive Board), have
made themselves more available for discussions with civic groups. At the staff
level, operational departments of the IMF have briefed increasing numbers of
interested representatives of civil society on policy developments. Management
has also
These discussions have not been one-sided, insofar as the
IMF has responded (at least to some extent) to
various suggestions received from civil society for policy changes. On various
occasions, civic organizations (especially think tanks and business
associations) have prompted alterations to details of the IMF’s recommended
monetary and fiscal measures and targets. The IMF has also enlarged its agenda
and reshaped several broad policy lines-in part, at the urging of certain civil
society groups-and is now devoting more attention to such issues as poverty,
environmental degradation, social spending, military expenditures, corruption,
and capital markets. Persistent pressure from religious institutions and
development NGOs helped to put the question of heavy multilateral debt burdens
for poor countries high on the IMF’s agenda in the mid-1990s. The IMF’s policy
changes may often have fallen short of what civic groups had hoped for, but
changes there have been.
Finally, through its contacts with civil society, the IMF
has given greater consideration to the political context of policy formulation and implementation. Although more could be done
in this area, some IMF staff now use inputs from civil society to assess the
political viability of IMF policy recommendations.
In sum, the IMF has made important overtures to civil society. It has multiplied both the channels of contact
and the actual interchanges with civic groups. These relations have, in turn,
affected both the way the IMF operates and some of its decisions.
Limits to dialogue
Significant though these developments are, much more can be done to develop a dialogue between the IMF and
civil society. Three general problems, in particular, may be highlighted –
exclusions, shallowness, and insufficient reciprocity. It should be stressed
straightaway that these limitations have resulted chiefly from resource
constraints and ingrained habits rather than from ill will on the part of
either IMF officials or civil society organizers.
With respect to problems of exclusion, the various groups
that make up civil society have to date had
unequal opportunities to participate in a dialogue with the IME In a rough
ranking, academic institutions and business associations have tended to have
the easiest access to the IME Trade unions have generally occupied second
place. Religious groups (mainly Christian), development NGOs, and environmental
NGOs have generally come third. Meanwhile, many other potential—and potentially
helpful —groups in civil society have had almost no dialogue with the IMF;
these have included, among others, smallholder associations and women’s
movements. Other inequalities in the IMF-civil society dialogue have favored
associations based in the North over groups located in the South. Likewise,
organizations based in urban areas (especially capital cities) have generally
had greater access than groups in rural areas.
Regarding problems of shallowness, many persons in both the
IMF and civil society remain inadequately informed about each other and do not
give sufficient priority to developing their relationships. In spite of the initiatives described above, the IMF-civil society dialogue has on the whole been only weakly institutionalized
and haphazardly sustained IMF initiatives toward civil society have often been
overly incremental, reactive, and improvised. The IMF’s Executive Board has not
yet formally articulated what purposes contacts with civil society should
serve, nor has management carefully considered what institutional mechanisms
would best advance the dialogue.
With respect to shortfalls in reciprocity, many persons in both the IMF and civil society have
continued to show limited openness toward each other. The parties have too
frequently entered discussions with inadequate readiness to listen to, learn
from, or be changed by one another. In short, exchanges between the IMF and
civic groups have often involved insufficient negotiation of differences. After
all, consensus is not normally reached by bringing one party around to the
other’s unchanged position. The common ground may well lie at a considerable distance
from the starting points of the different parties.
As emphasized earlier, exchanges between the IMF and civil
society have gained in substance in recent years. However, in the absence of
wider participation, deeper foundations, and greater flexibility, the dialogue will not realize its full
potential for enhancing policy effectiveness and democracy. Clues on how to
develop the dialogue further may be gleaned by examining the circumstances that
have limited it to date.
Inadequate resources have been
an important constraint on the development of contacts between the IMF and
civil society. For example, both the IMF and most civic organizations have been
severely hampered by shortages of relevant personnel, finances, information
bases, and so on. The IMF cannot hope to obtain best results in dialogue with
civic groups from already overworked staff members, inadequate budget
allocations, and an absence of detailed knowledge about civil society in
various countries.
Yet the constraints on dialogue between the IMF and civil society also run deeper than
resource limitations. For example, the unequal access described earlier has
resulted largely from embedded social hierarchies. The culture of secrecy that
has long enveloped monetary and financial regulation has also created obstacles
to a fuller dialogue. Traditionally, agencies like the IMF have not been geared
to public affairs, and institutional cultures do not change overnight.
Meanwhile, civil society organizations face the important
challenge of ensuring their democratic
credentials. These associations do not always adequately practice the
participation, consultation, representativeness, transparency, and
accountability that many of them demand of governments and the IME Officials of
the IMF are understandably nervous that they may unwittingly become engaged
with “uncivil society:’
Next steps
The IMF has developed some important relationships with
civil society. Not surprisingly however, given its short history, this dialogue
has much unrealized potential and could be
significantly improved. What sorts of initiatives can the IMF take to this end!
Given the severe resource constraints under which both the IMF and civil
society labor, what can be done in the short and medium term?
First, the IMF could give
careful thought to clarifying its objectives. It would be helpful to staff
members if the Executive Board would formulate a statement of general
guidelines and instructions concerning relations with civil society.
Second, the IMF could expand and systematize its information on civil society This task would probably be
done most efficiently in collaboration with other multilateral agencies— for
example, through an upgraded United Nations Non-Governmental Liaison Service.
Third, IMF staff members could
draw more on the experience of other agencies that have more highly
developed contacts with civil society—for example, the United Nations
Children’s Fund (UNICEF), the United Nations High Commissioner for Refugees (UNHCR), the United Nations Development Program
(UNDP), and the World Bank.
Fourth, the IMF could release, as a matter of course,
certain documents that civil society needs to provide informed input on IMF
policies. In this regard the IMF could publish (expunging any market-sensitive
details) all letters of intent (letters
prepared by governments setting out the details of economic programs agreed
with the IMF) and policy framework papers (papers prepared by borrowing
governments, with the support of IMF and World Bank staff, describing their structural
adjustment strategy over a three-year period). Likewise, staff reports and
press information notices could be made available with respect to all
countries’ Article V consultations (regularly scheduled meetings between IMF
staff members and government officials to review countries’ exchange rate
policies and gather economic information): Greater transparency would do much
to clear away the mystery and fear that often becloud perceptions of the IMF.
Fifth, the IMF might undertake a pilot program under which several specifically designated “civil society
liaison officials” would be appointed to the IMF staff. Such an official would
be temporarily included in the IMF team working on a given country, with the
government’s agreement. During the assignment, the official would gather input
from, and disseminate information to, civil groups in the country. The aim
would be to increase mutual understanding between the IMF and civil society and
thereby improve the chances of success of IMF-supported policies. In addition
to having both an interest in, and an understanding of, civil society,
appointees would need to have a thorough understanding of the IMF and the
ability to be easily integrated into a country team and to translate
suggestions from civic groups into terms that can be applied to program
formulation and implementation—and they must be capable of winning the trust of
both supporters and critics of the IMF.
A number of other low-cost proposals are also available to
enhance the IMF’s dialogue with civil society.
The returns in terms of increased policy effectiveness and democracy can be
great. It is to be hoped that the IMF will continue on a course that has
already helped to involve civil society more directly in the regulation of
monetary and financial affairs.
Jan Aart Scholte is Senior Lecturer at the institute of
Social Studies in The Hague. His research on the IMF and civil society has been
sponsored by the Global Economic institutions Program of the Economic and
Social Research Council in the United Kingdom.
In carrying out his research, the author contacted more than 100 persons in
civil society, the IMF, and other official circles. The views expressed in this
article are his own.
Civil Society and NGOs
Civil society should not be
equated with another catchphrase of contemporary politics, namely the so-called
NGOs (non-governmental organizations). To be sure, civil society does include
development NGOs, women’s NGOs, environmental NGOs, human rights NGOs,
humanitarian relief NGOs, and so on. However, civil society also encompasses
far more: trade unions, business associations (as distinct from firms),
farmers’ groups, religious bodies, academic institutions, student
organizations, community groups, professional associations, political parties,
ethnic lobbies, and so on.
Why have a dialogue?
Contacts between the IMF and civil society can serve multiple purposes:
- Information Exchange
- policy debate
- channel of public opinion
- legitimation
- civic education
- general democratization
The IMF and trade unions
The IMF’s relations with trade unions illustrate the
expansion of its contacts with civil society. Incidental exchanges between the
IMF and the International Confederation of Free Trade Unions (ICFTU) date back
to the early 1980s. However, the IMF’s main
overtures to organized labor have been more recent. Since 1992, the IMF has
cosponsored several seminars for labor organizers. National and regional
delegations of labor leaders have visited IMF headquarters in Washington with
some regularity since 1993. In 1995, IMF management issued special instructions
that the IMFS resident representatives should nurture contacts with trade
unions in their countries of assignment In 1996, the IMF’s Managing Director
addressed, for the first time, a World Congress of the ICFTU; he made an
address to the World Confederation of Labor the following year.
Moving ahead
-
In further developing its
relations with civil society, the IMF could, at little cost:
· -
clarify its objectives;
·
-
gather more
information;
·
- consult more with other
multilateral agencies;
·
- release more
documentation; and
· - integrate a “civil society official)’ into selected country teams.