Democratic Deficit in Global Governance - Essay Example

Democratic deficit’ in global governance Student’s Name: Instructor’s Name: Course Code and Name: University: Date of Submission: Democratic deficit’ in global governance Introduction Many global governance organizations have gone against what democracy implies. They have neglected the rule of stakeholders and failed to effect communication with elected leaders in different parts of the world. This has brought failure in running the noble tasks these global institutions are entrusted to perform. In most cases, people feel indebted because the institutions have become money generating projects rather than being charitable organizations that are neutral (Buira 2005, p. 64). International financial institutions give money for free but, they should not have the countries to pay in very high rates as they do to developing countries. In most cases, the developing countries are overburdened with the task of paying twice the amount of money they borrow by inclusion of hidden charges that were not explained to the borrowing countries during the time of carrying out the transaction (Woods 2001, p. 84). International institutions are still indecisive on the measure to take so as to curb the poverty conditions in the world. The conditions in developing countries are deteriorating and needs to be addressed. Instead of World Bank and International Monetary Fund stepping in to offer solutions, they double troubles by charging principal amounts twice. Developing countries do not know the logistics of World Bank and IMF this end up paying money they never spent (Bekkers 2007, p. 295). Accountability of these institutions is questionable because it is rare for them to offered protective measures but respond when the country is completely dilapidated. Before they give solutions, they provide instructions and prerequisite conditions that the recipient country cannot meet. The institutions are in cahoots with powerful nations that control financial institutions to make life of the developing countries hard (Woods & Narlikar 2001, p. 573). The citizens of these developing countries forever lament of languishing in poverty which mechanically manipulated by the institutions they ought to trust. It is ironic that the very same institutions that countries ran to in time of crisis are conspiring against to make a fortune out of their problems (World Development Movement 2011, p. 1). International Monetary Fund International monetary fund has been managed with a lot of confusion because some of its member countries want to control the management. This leaves countries that are weak with no control in the affairs of the institutions. Many countries suffer because they do not have access to a reasonable amount of money simply because they have unpaid debts. Instead of IMF declaring that it has waged off some expenses for such weak countries it continually oppresses the countries. This is not in any way offering democratic leadership to an institution that is supposed to be lending developmental funds to needy countries. IMF is supposed to offer guidance in the manner countries needs to manage their finances or resources but, it just sleeps on the job. It has capitalized into lending money that will bear interests while millions of people are dying out of hunger (Birdsall 2000, p. 121). Many times, global institutions face demonstrations by angry critics because the critics feel that the global institutions are not working hard to meet the needs of poor people in the world. The manner in which appointments and nominations of directors in the global institutions is done is biased. Strong powers want to have somebody who is close to them in those positions because they manipulate them to their advantage. By the time Wolfensohn was about complete his term as the IMF managing director, there were speculations that there would have been ill selection of the managing director. People felt that it was going to happen with the World Bank too. World leaders had a plan to appoint a new managing director in World Bank, in closed doors, in a second time, within one year. This was a bad public image because of that undemocratic step which made the whole world suspect foul play in the International Monetary Fund activities (Miller 2007, p. 326). The ideology that was formulated after the Second World War made it possible for technocrats to formulate development policies and foreign aid in secret. This suspicious idea of deliberating international issues, in closed doors, made civil servants rise against such moves and condemn the internationals instructions because they ended up denying the public their rights of accessing information. International bodies that deal with civil right needed matters concerning transparency of global institutions to be dealt with urgency so as to make them accountable. Public accountability of these global institutions is required because this develops trust of these organizations (Woods 2000, p. 823). Over fifty countries adopted laws that govern freedom of information so as to check the performance of citizens in organizations that are pertinent in managing affairs of nations. Democratic deficit is prominent in global institutions because the leaders and managing directors of World Bank and international Monetary Fund (Held & Koenig-Archibugi 2005, p. 6). Climate change has lent to reckless lending of money by World Bank, which has made, protestors from the civil service community to block activities because of intentions to give loans to Cambodia, Nepal, Zambia, Mozambique and St. Lucia. There was a statement to notify the board of World Bank that there was the lack of transparency in the process which facilitated voting of the new World Bank President. This is an indication that there has been democratic deficit that prevails in the manner operations are carried out in the global institutions. If the legitimacy, of these important institutions is to be of any relevance to its member’s issues concerning closed-door decisions, has to be dropped because it is jeopardizing the trust people have in both IMF and World Bank (Global Governance 2002, p. 1). There is unequal distribution in the manner votes on the bank and, the fund is carried out. The members are selectively picked and serious considerations in whether they will help the sponsor countries are enhanced. Undemocratic behaviour portrays how unaccountability of both IMF and World Bank. The criteria used to come up with distribution of board votes is based on a formula founded in 1944 which is inadequate to deliver required results because there are so many countries that have come up and would want to participate in decision making of these global institutions (Buira 2005, p. 62). Democratic principles are challenged by the fact that there is no consideration of countries that are economically endowed being considered to participate in the voting of board members. The manner in which Executive Directors run these institutions is questionable and needs to be investigated (Buchanan & Keohane, 2006, 417). Actions that take place in the public institutions are taken to be personal affairs and, it is very hard to know the reasons as to why the Directors take certain actions in the running of the global institutions because their ruling is unquestionable in relation to their God parent. The accountability of Executive directors is many times questionable but, no one has a platform to address his or her concerns because they will be turned down by the executives. The IFI Democracy Coalition has highlighted the democratic deficits that are in the organizations because they hamper the manner in which majority trust IMF and World Bank (Keohane 2002, p. 17). The principles that these organizations use to plan their activities as have been overtaken by events because they were founded about six decades ago despite the fact that we are in the era of globalization. The Board Governors had been challenged to behave accordingly and be bold when implementing strategies. They ought to be bold and focused on improving the tainted image of International Monetary Fund and World Bank (Woods & Narlikar 2001, p. 573). International financial institutions (IFIs) have been checking the manner in which World Bank and IMF were being conducted. IFIs are also operating on a model that was founded in the 19th century and, it has a few individuals who run the institutions like with ultimate authority and, rule using unwritten agreement. This questions how possible it is for IFI to be in search of transparency and accountability which is prerequisite in the 21st century (Kelkar et al. 2005, P. 9). It is ironic the institutions that check others, are also built upon contempt and are led by socially rigid personalities who do not take instructions from other people. In 2000, there was the selection of Horst Kohler to become the new IMF Managing Director which was undemocratic. Due to this undemocratic move, there was a proposed manner of selection presented to IFI which was rejected in 2001 and 2004 Rodrigo Rato was selected as the new Managing Director of IMF. This act was met with criticism because even the eleven IMF board members complained of a dubious method of selecting the Managing director. The board members are in charge of more than one hundred countries who issued a statement of discontentment challenging the manner of selection because they felt that it was guided by geographical restrictions (Jones & Hardstaff 2005, p. 34). IMF wrangles are even coming from within meaning there is the lack of accountability as the member country suspect. The reason as to why many people doubt the democratic administration IMF purports to have is that the move to have a voice and vote ability of developing countries has been ignored. There was the need to empower developing countries by involving them in voting IMF and World Bank board members but, the idea was not adopted because there is a strategy to keep developing countries at bay so as to exploit them when they borrow money (Gurumurthy 2007, P. 25). There was a protest on how the global financial institutions are transferring the debts to developing countries and forcing them to pay double. Involving poor countries in deliberations will just reveal the dubious methods IMF and World Bank are using so as to exploit developing countries thus revealing their undemocratic deficits and lack of accountability in the manner they conduct their activities. If they want to collect more than they lent, it is an indication that they are unaccountable. There is no proper vetting of officials who work with these institutions hence the reason why they are easily influenced by powerful forces to deviate from norms of the society because their employment is not set on honesty grounds (Grugel & Uhlin 2009, p. 3). The reason as to why there is shot of democracy in the IFIs is that there is a gap between the borrowing countries and the rich countries. Effects of this gap affect the citizens of the borrowing countries because they are burdened with a lot of expenses that they do not need to incur but that benefit those from rich countries that exercise influence at the International I financial institutions. There is a need to harmonize control of IFIs by incorporating equal numbers of both members from borrowing countries and rich countries (Buira 2005, p. 62). Criticism has been focused on the manner World Bank presidents are selected because it is a process that is hindered by circumstances that are artificial created by people who have interests in the institutions of finance. There was a group of civil society that condemned the manner in which the United States Government has made it a tradition to name the world bank Presidents. It should be an open voting because if United States is given the responsibility of selecting the presidents, there would result to bias because they will select someone who will check the interests of their country (Hart 2006, p. 226). Due to dissatisfaction many international organizations have endorsed a statement written by a group of civil society organizations who find it their obligation to change the manner in which Word bank operates for it has caused misery to many countries hence qualifying to be a blessing in disguise. World Bank being global institutions has lacked transparency hence no democracy at all (Jones & Hardstaff 2005, p. 32). In September 2004, police I Malawi had a hectic time trying to keep tea pickers who protested against their worries that tea plantations had been privatized. IMF and World Bank influence Agricultural Development and Marketing Corporation (ADMARC) to privatize subsidiaries which led to privatization of companies. Malawi Tea Factory Co. Limited Smallholder Tea Authority is an example of privatized merger where the consent of tea pickers is not consulted. This sound as ignorance to them by IMF and people feel that such steps are undemocratic (Global Governance 2002, p. 6). International Monetary fund ignores parliaments of poor countries because they do not have influence. Instead of finding mean to incorporate them in decision making so that they will give strategies on how to redeem their people through the help offered by IMF, they are ignored and their desire burn within them. IMF down plays decisions made parliaments and, this affects the manner in which business is conducted in the poor countries. In Ghana poultry business was manipulated by a single call from the International Monetary fund to the government and saw tax removed which led to above 100% poultry that was imported in the market (Uhlin 2010, p. 20). This affects the manner in which countries run their business because IMF patronizes poor countries instead of guiding them to run business internationally (Keohane 2002, p. 34). IMF has been dealing maliciously with governments that rise against its rules and, this affects the manner in which IMF helps these poor countries. It continually ignores them because it undermines the relationship of the government and its citizens by enforcing policies in countries. President Museveni of Uganda once told IMF off because he felt they misled his country in 2004 (Linaweaver 2002, p. 8). Conclusion International Monetary fund has been a blessing in disguise because it has been failing to execute its tasks hands free because of external interference. The reason as to why it has been undemocratic is because it works in cahoots with rich countries that want to extort the poor countries instead of supporting them. Citizens are not in a position to pay the lent money because of high cost of living, unemployment and lack of expertise on money matter. World Bank is not accountable to the manner it spends money. There are a lot of scandals that are left to go free without any investigation. Many countries have suffered while international financial institutions claim to be at the service of countries. Somalia is undergoing a series of crisis while the international institution concerned with finance does not help at all. They blame the governments where as they interfere with appointing and selection of institution heads because they need people they can manipulate. This is the democratic deficit of the highest order because they ought to be run with democracy and accountability. Reference List Bekkers, V 2007, Governance and the democratic deficit: assessing the democratic legitimacy of Governance practices, Ashgate, Farnham, Surrey. Birdsall, N 2000, ‘The World Bankof the Future:Victim, Villain,Global Credit Union?’ Summer/Fall 2000 – Volume VII, Issue 2, p. 121. Buira, A 2005 Reforming the governance of the IMF and the World Bank, Anthem, London. 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Uhlin, A 2010 Civil Society Strategies to Democratize International Organizations: The Case of The Asian Development, Viewed 5th August, 2011 Woods, N & Narlikar, A 2001, Governance and the limits of accountability: the WTO, the IMF, and the World Bank, Viewed 5th August, 2011from http://classwebs.spea.indiana.edu/kenricha/Oxford/Archives/Oxford%202006/Courses/Governance/Articles/Woods%20-%20Accountability.pdf Woods, N 2001, ‘Making the IMF and the World Bank More Accountable,’ International Affairs (Royal Institute of International Affairs 1944-), Vol. 77, No. 1. (Jan., 2001), pp. 83-100. Woods, N 2000 ‘The Challenge of Good Governance for the IMF and the World Bank Themselves,’ World Development, Vol. 28, No. 5, pp. 823-841. World Development Movement 2011, International institutions dither as millions go hungry, Viewed 5th August, 2011 Read More