The Administration of International Organizations

Top Down and Bottom Up

Michael D.V. Davies

• Publisher: Routledge
• Year: 2017
• Topic: Politics & International Relations
• eBook ISBN:
  9781351895217
• Subtopic: International Relations
• Index: Politics & International Relations

Drawing on his extensive practical experience as an international civil servant in a number of organizations, Davies writes in a lively and readable manner about all aspects of administrative policy and its related implications. Divided into two parts, the first - Top down - will enable policy makers in government, academia and elsewhere who have an interest in the proper governance and management of international institutions to gain fresh insight into the topic. The second part - Bottom up - provides a substantial body of knowledge of administrations, including case studies of best and worse practice. The book includes analysis of: -The UN system -International Financial Institutions -Co-ordinated Organizations -Regional European Institutions -The Consultative Group for International Agricultural Research This is a work that fills a well-defined gap in organizational knowledge in a rigorous, but accessible way. It is essential reading for both practitioners and academics involved with international organizations.

Chapter 1

The Environment

Before studying the administrative disciplines in detail, it is useful to set them into the broad context within which they operate. Following on from the introduction, this chapter briefly reviews how the administrations have developed historically and how two overarching characteristics have generally influenced their administrative policies and practices; these are, the multilateral nature of their governance and the bureaucracy that forms the background within which the administrations work. In turn, these overarching features lead to a more detailed consideration of some major and minor “environmental” conditions that have shaped the administration of international organizations at the present time. Some, but not all of these environmental factors, are substantially different from the conditions impacting upon their programme activities or on a national civil service.

The first modern intergovernmental organization, the International Telecommunications Union (ITU), was founded in Paris in 1865; shortly thereafter, in 1874, the Universal Postal Union (UPU) was also created. ITU was originally part of a Swiss Government Ministry and although most of the staff were Swiss, the Swiss Government respected the international nature of the organization, recruiting other nationals into its service, even though it exercised exclusive management control. UPU has a number of residual characteristics that derive from its foundation. Although a member of the UN family, UPU does not participate in the United Nations Joint Staff Pension Fund (UNJSPF) as it has long had its own pension system and unlike many UN organizations, its budget is set in Swiss Francs and not in US dollars.

It was, however, the three international organizations that were founded after the First World War, based on initiatives taken by the Peace Conference, that most shaped the institutions that followed later. The Bank for International Settlements (BIS) was created to adjudicate European war reparation issues, the League of Nations was founded to provide a forum for international conflict resolution and the International Labour Office was the first technical agency set up for long-term social development in its member states.¹ The League and ILO were the true precursors of today’s international civil service and their rules and operating procedures became the basis for those of many later organizations. The League, in particular, under the leadership of Sir Eric Drummond, the first Secretary-General (SG), set the pattern for an independent international civil service along the lines of the British civil service. Concepts such as staffing based on geographical representation, the settlement of internal disputes by tribunal and expatriate conditions of pay and benefits all derive from the League and ILO.

Although, at a political level, the institutions set up at the end of the Second World War were intended to be very different from the League of Nations; at a functional level the difference was less apparent. Despite the fact that the United States was the predominant sponsor of many of the new institutions and had not been a member of the League, the influence of the League was profound from both an intellectual and a structural perspective. The UN General Assembly’s (GA) governing structure of seven committees was a direct copy of the working structure of the League. The ILO, which continued operating through the war years, provided a strong link to the administrative practices of the League, which it had generally followed. Former League staff rose to positions of pre-eminence in the new institutions: Jean Monnet at the European Coal and Steel Community and later a co-founder of the European Economic Community (EEC); Per Jacobsson who became Managing Director of the IMF; Thanassis Aghnides who served in key positions on two administrative bodies created by the GA – as Chairman of the Advisory Committee on Administrative and Budgetary Questions (ACABQ) and as a member of the International Civil Service Advisory Board (ICSAB); and Uno Brunskog, a member of the Flemming Committee² of the United Nations. The influence of such people was pronounced and they and the drafters of the administrative rules of the new institutions took, as their starting point, the rules and experiences of the League; for although the League was discredited politically, it had successfully created the first truly international secretariat.³

The three phases in the development of modern MIs, referred to in the introduction, were paralleled from an administrative perspective. The formative years from the late 1940s through to the 1960s were ones in which the foundations of international administration were laid out. This was a period marked by some initial progress in inter-organizational co-ordination, well-conceived basic policy initiatives, such as the UN system’s Standards of Conduct in the International Civil Service⁴ and the establishment of basic administrative rules and regulations. During the second phase, up to the mid 1980s the administrations generally operated in a period of increasing budgets, which provided resources for improving facilities and support systems. From time-to-time, in individual organizations, there was pressure for a tightening of budgets, which could, mostly, be accommodated by ad hoc responses, such as a freeze on recruitment or a cut in travel. A few specific organizations had continuing difficulties but as at ILO and the United Nations Educational, Scientific and Cultural Organization (UNESCO) this was often a result of profound political disagreements, which polarised support. The most recent phase of administrative activity started in the late 1980s when governments began to pay closer attention to the funds being disbursed for MIs. By the mid-1990s most large organizations had found it necessary to have at least one radical reform of their programmes, management and administration in order to respond to the pressures from governing bodies. Organizations are now moving from a static state, with an occasional need to reorganize, to one in which reorganization or review is continual. Characteristic of these recent reforms has been an emphasis on cost-effectiveness and a more permanent need to manage continuing change from within, an environmental condition considered below.

The multilateral character of the organizations gives rise to conditions, which are different from those faced by a national civil service. Decisions often involve compromises between opinions held by blocks of countries and the results of those compromises are, sometimes, less than satisfactory. The need to balance all views or to be seen to be neutral leads to problems, which impact on the administrative disciplines. Thus, there can be tensions in the administrative environment springing from attempts to balance different national approaches, systems and reactions. As one example, the need to give member states the opportunity to supply equipment on an international basis may lead to long-term costs through incompatibility with pre-existing equipment or difficulties in obtaining repair services and the process of procurement takes longer. Three environmental factors will be examined which spring from this need to balance multilateral interests. First, there is the legal environment coupled with specific agreements, binding on member states, negotiated for each organization and its headquarters. Second, there is a problem of accountability as the organizations belong to everybody yet to nobody. Third, there is a diversity of cultures running the organizations, which on the one hand is a great strength but which, on the other, can impede the administrative decision-making process.

The second overarching feature of MIs is that, whatever may be said, they are governmental in their basic make-up and exhibit many of the typical traits of Weberian bureaucracies. For the man or woman in the street and for their elected representatives, national civil services work within well-known and accepted norms. They are a reflection of national identity with expectations of service, efficiency, accountability and transparency framed in the context of a single culture. When things go right or wrong there is an interested national press that will put an event into context and pursue a story until it is brought to a conclusion. In the more accountable systems, when a ministry makes an error of judgement, as was the case with the outbreak of bovine spongiform encephalopathy (BSE) in the UK, there is a politician who must accept responsibility, even though the department’s original action may not have called for a political decision. At all levels the population feels the results of bureaucratic activity and opinions are firmly held on one side of an issue or another. This is not the case for an international bureaucracy. Unless an executive head has a distinctive profile (either positive or negative) opinions are often formed through reading the third-party commentary of persons who have reason to frame their views from a specific perspective. The MIs function through structured layers of committees and in many cases the principal visible outputs are reports or records of meetings. Those few MIs that are known to and work directly with the public are usually humanitarian in nature and the constituent part of the public with which they work is the most disenfranchised of all, with a correspondingly weak representation and voice.

Two environmental factors directly relate to the bureaucratic nature of MIs. Like many bureaucracies, they generally operate their administrative machinery under financial conditions, which are cost-driven (rather than profit or revenue-driven) and which give rise to decisions that are sometimes counter intuitive. There is also an excessive overlay of confidentiality and general lack of transparency. Throughout their work, the various administrations behave as though they are the repositories of member governments’ most sensitive activities; rather than in the few key technical areas, which is the reality. This is true even today, when the technical side of their work has been opened to a degree of third-party scrutiny that was unimaginable ten years ago.

The Legal Environment

The legal environment of MIs was designed to ensure that they operated in a truly independent manner with an ability to avoid those external pressures in their day-to-day work that could be brought to bear in support of national self-interest. MIs are generally managed outside national laws of contract and within a legal context that has been designed to create an independent civil service, to protect individual international civil servants from undue national pressures and generally to prevent one member state from having an advantage over others. However, this then creates the basic environment that makes the institutions different from accepted norms and which, particularly from a personnel management perspective, leads to public perceptions that are often negative. Many observers have written about the administration of MIs from a legal perspective⁵ and it is not intended to cover that ground once more, other than to provide a few examples of its impact upon administrative disciplines.

A good example of the impact of the legal framework is that staff salaries are protected from tax by national authorities. This is not because they should not be taxed but because the tax, when paid by the staff, would all go to the countries in which they are resident for tax purposes, yet be funded by all other member states. In addition, a tax-exempt regime means that the cost of staffing MIs is reduced to a minimum. Tax-exempt status is not necessarily a plus for the international civil servant, who cannot claim common tax advantages such as deduction of mortgage interest, business expenses, etc. It complicates salary administration because every calculation comparing and establishing the pay of staff has to be made on a net-of-tax basis in order to ensure that there is no advantage given to staff simply by virtue of their tax status. It creates envy because no one likes being taxed⁶ yet the detailed explanation, of how tax-exempt salaries are derived from actual (gross) pay levels, is difficult to communicate to a general audience. It distorts pay incentives because the organizations cannot use types of remuneration which, in a national context, are cost effective for employers – such as reimbursement of commuting costs or meal vouchers – and it makes integration into national social security schemes exceedingly difficult, if not impossible in most cases. The US press, in commenting on international civil servants, frequently reminds its readership that their pay is tax-exempt, whether or not the statement is germane to the issue under discussion.⁷ The very use of the words “tax-exempt salaries” tends to be prejudicial and sets the tone of subsequent argument.

At the most fundamental level the organizations contract with their staff, outside of any commonly used formal employer/employee structure, based on their own internal practices as developed over time. No overarching employment laws ensure the common rights of both parties and there is no clear process for resolving disputes using third-party arbitration in a speedy, impartial and dispassionate manner. Administrative Tribunals were created to protect staff from arbitrary management unconstrained by national laws but their decisions, which have the strength of law, have slowly become a constraint on good management by encouraging an over-codification of human resources practices. Over time, the influence of tribunals gave rise to the concept of the “acquired rights” of staff. At one time this concept meant that nothing could be taken away from staff, once it had been granted. Thus, salaries could not be reduced, benefits could not be cut or non-cash benefits changed, unless they were changed in favour of staff. This concept caused rigidities in personnel administration. At first, organizations got round the problem by fully grandfathering serving staff and introducing different conditions of service for new staff or for new contract types. The Asian Development Bank (ADB) has been so heavily impacted by adverse tribunal decisions, that a number of its personnel policies and procedures have been changed simply to accommodate the rulings of its tribunal. More recently tribunals have been accepting changes if they can be based on “clear and compelling” reasons, provided staff are given sufficient time to accommodate the change.

An example of the distortion created by tribunal rulings is provided by a situation that arose at the World Bank. Originally IBRD and IMF, as a matter of administrative practicality, shared some common conditions of employment such as; salary scales, expatriate benefits and pensions. The World Bank Tribunal progressively codified not only common personnel practices but also the right of IBRD staff to have their conditions of service set in parallel with those of IMF, such that it eventually became a dogma. As a result, when IBRD management decided, in 1998, to change its employment strategy and to distance the bank from common conditions of service, IBRD had to request formal agreement of the Fund’s Board to avoid a potential legal challenge. This is akin to British Gas needing the agreement of the British Telecommunications board to change its pay scales, simply because they are both regulated by the British government.

A case taken to a national industrial tribunal rarely has the same broad impact as cases taken by international staff to their final level of arbitration – an administrative tribunal. The various tribunals take each other’s pronouncements into account when deciding on cases brought to judgement before them. Since the character of each tribunal is somewhat different, balancing the opinions of judges from diverse legal systems (especially the Napoleonic and Anglo-Saxon ones), interpretation of basic conditions of service can often be very confusing. It is quite common for a relatively simple appeal to require as much as one year of a staff lawyer’s time as it proceeds to a final hearing, involving as it does, research into other tribunals, the organization’s own precedents, the taking of verbal statements and cross-examination. The tribunal process is over legalistic for the nature of most of the cases being considered and MIs would benefit enormously if there could be a lower tier of independent legal decision-making more akin to industrial tribunals.

The issue is not that national systems do not also encourage litigation (the US is noted for this) but that the MIs suffer from a shortage of simple processes that quickly provide authoritative decisions in a non-bureaucratic manner. For example, every change in personnel policy at EU is published in the Official Journal of the European Union (OJ) in such a legalistic way that it is almost impossible to obtain a clear and easy overview of the actual rule in force.⁸ This constrains development and communication of modern, flexible and easily understood policies. A simple five-line EU staff directive on the extension of limited rent subsidies beyond their original cut-off date was published in all eleven languages in OJ with a preamble containing four clauses starting with “Having regard to” and five starting with “Whereas”. In the majority of MIs such a decision would have been announced in a circular communication, in working languages only, under the signature of the Director of Personnel.

The lack of appropriate third-party involvement has also encouraged the various organizations to interface with staff representatives on a consultative rather than a negotiating basis. The result is that binding agreements are more difficult to conclude since there is no “obligation” on either side to respect the final positions resulting from consultation. Typically, in the external environment, both sides in a negotiation come to a position that is considered to be definitive and for which both negot...

Table of contents

• Cover
• Half Title
• Dedication
• Title Page
• Copyright Page
• Table of Contents
• List of Figures
• List of Tables
• Acknowledgements
• List of Acronyms and Abbreviations
• Introduction
• 1 The Environment
• PART ONE: TOP DOWN
• PART TWO: BOTTOM UP
• Bibliography and Select Sources
• Index