Global Governance, Poverty and Inequality

Rorden Wilkinson, Jennifer Clapp

• Publisher: Routledge
• Year: 2010
• Print ISBN: 9780415780483
• eBook ISBN: 9781136974366
• Edition: 1
• Topic: Politics & International Relations
• Subtopic: International Relations
• Index: Politics & International Relations

A series of crises unfolded in the latter part of the first decade of the 21st Century which combined to exacerbate already profound conditions of global economic inequality and poverty in the world's poorest countries. In 2007, the unsound lending practices that caused a collapse in the US housing market ushered in a broader economic crisis that reverberated throughout the global financial system. This economic shockwave had a global impact, triggering not just instability in other industrialized countries, but also in their developing world counterparts, also highlighting deficiencies in the current structures of global governance to protect the world's poorest and most disadvantaged.

This book offers answers to questions raised about the role of global governance in the attenuation and amelioration of world poverty and inequality. The contributors interrogate the role of systems of governance at a time of global economic crisis and continuing environmental degradation against a backdrop of acceleration in inequalities within and between communities and across the globe.

Evaluating how existing systems can be reformed or redesigned to be more effective at addressing issues of poverty and inequality and providing a comprehensive discussion of a wide range of global governance initiatives this work will be essential reading for students and scholars of global governance, international relations and international organizations.

Part I
Development and the governance of poverty and inequality

1
Global governance meets development

A brief history of an innovation in world politics¹

Eric Helleiner

In this chapter, I explore the origins of the practice of assigning international organizations a mandate to promote rising living standards in poorer countries. Today, this “international development” task represents a very important part of the activities of a wide range of international organizations. But it was a marginal part of the focus of the first two generations of international organizations: the pre-1914 Public International Unions and the interwar League of Nations. I demonstrate that it was only at the birth of the United Nations system—and especially during the negotiations that led up to the 1944 Bretton Woods conference—that this mandate came to be seen as an important part of global governance. Among the catalysts for this innovation in world politics, I argue that two were most important: the new interest of US policymakers in the idea, and the rising “development” aspirations of poorer countries at this time.

These arguments are intended to correct two common historical assertions.² The first is that the architects of the Bretton Woods international economic system had little interest in international development issues. In my view, this argument overlooks the commitment of many of the Bretton Woods architects to development issues, as well as the fact that these individuals pioneered a number of ideas about how international organizations could promote development. Second, this argument challenges the view that the “international development” project was born instead with US president Harry Truman’s 1949 Point Four program and driven by US strategic and economic goals in the Cold War. In my view, that case not only ignores the centrality of development issues during the Bretton Woods negotiations, but also underestimates the role of both the US New Deal and lower-income countries in this transformation of global governance.

More generally, my chapter attempts to provide some historical perspective for the analysis in this volume on the relationship between global governance, poverty and inequality. Because I am concerned solely with the role of international organizations, this chapter takes a narrower perspective on global governance than others in this volume. The focus on addressing “poverty” is also restricted to the promotion of rising living standards in poorer countries. As we shall see, the idea of assigning international organizations the task of addressing global “inequality” was also conceptualized at this time primarily in inter-country—rather than intra-country—terms. Despite these caveats, the chapter offers insights into how international development concerns were first integrated into the policymaking within the formal institutions of global governance.

When did international organizations assume a development mandate?

The birth of modern international organizations is usually identified with the creation of the Public International Unions of the late nineteenth and early twentieth centuries. Between 1864 and 1914 over 30 such unions were created, and many of today’s specialized UN agencies trace their origins back to them. The majority of the unions were focused on facilitating cross-border commerce by standardizing regulations, cutting tariffs, and providing infrastructure for transportation and communications. Others sought to address peace and conflict issues or promote scientific and cultural cooperation. Still others were concerned with the promotion of economic and social welfare through cooperation on issues relating to labor, health, and agriculture (Murphy, 1994).

Because most of the members of the unions were European countries, they focused mostly on issues of interest to wealthier countries. The fact that much of the non-industrial world was colonized in this period also helps to explain the lack of interest in development issues relating to poorer countries. Even the unions concerned with economic and social welfare largely neglected poorer countries of the world, with the exception of the Anti-Slavery Union established in 1890. This is not to say that there was no attention to the idea of an international development institution. Within such circles as the Saint-Simonians, there had been some interest during the nineteenth century in the idea of a public international bank that could promote economic development in poorer countries (Rich, 1994: 51, 216–20; Nustad, 2004). However, the notion failed to find a champion among those who built the Unions in the late nineteenth and early twentieth centuries.

The creation of the League of Nations represented a much more ambitious effort to establish an international institutional framework for world politics, but international development issues remained quite neglected in its formal mandate. Some might consider Article 22 of the League Covenant to be a partial exception. This article dealt with the management of the mandate territories which had been colonies of the defeated powers. These territories were now handed over to the victors of the war to be managed because they were considered to be “inhabited by peoples not yet able to stand by themselves under the strenuous conditions of the modern world.” But the administrators of mandates were subject to certain rules, one of which was that “principle that the well-being and development of such peoples form a sacred trust of civilization.” Article 22 continued: “the best method of giving practical effect to this principle is that the tutelage of such peoples should be entrusted to advanced nations who, by reason of their resources, their experience or their geographical position, can best undertake this responsibility” (quoted in Rist, 1997: 60).

As the wording above makes clear, this commitment to “the well-being and development” of people in the mandates was deeply influenced by colonial ideologies about the superiority of some peoples over others. The precise meaning of “well-being and development” was also left very unclear. The upholding of “well-being” came to be associated with League norms such as the ban on slave trade and forced labor, or commitments to improved public health and education, while the word “development” was increasingly used in colonial administration at the time to highlight how colonies were to be made more productive rather than simply conquered and exploited (Murphy, 1994: 210–11; 2006: 33; Arndt, 1987: 22–29; Cowen and Shenton, 1996: 294–95). A further limitation was that the implementation of this principle was entirely delegated to the administering country. To be sure, the League’s Mandates Commission—which included experts in colonial administration—could receive petitions from peoples in the mandates. However, the Commission had no right of independent inspection and petitions were usually dismissed in practice (Rist, 1997: 63). More generally, it is important to recall that this commitment to promote development applied to only a very small number of territories.

Interestingly, in their practical activities, institutions such as the International Labour Organization (ILO), the International Institute of Agriculture (predecessor to the Food and Agriculture Organization, FAO, of the United Nations) and the Health Committee of the League made greater efforts than the Public International Unions to address issues relating to economic and social welfare in poorer countries (Murphy, 1994: 211). In response to Chinese government requests, the League also sent many experts to that country between 1929 and 1941 to help with its modernization in areas such as health, education, transportation, and the organization of rural cooperatives (Rist, 1997: 65–66). These various activities of the League emerged, however, in an ad hoc fashion and were not part of any new comprehensive official international commitment to promote rising living standards in lower-income countries (Murphy, 1994: 211).

It was at the founding of the United Nations system that we see this commitment emerge more fully. The UN’s Charter mandates the institution “to achieve international co-operation in solving international problems of an economic, social, or humanitarian character, and to promote higher standards of living, full employment and conditions of economic and social progress and development.” The Charter also noted the need to employ “international machinery for the promotion of the economic and social advancement of all people.” At the time of the UN’s establishment, a specific international machinery to promote development had already been negotiated. At the 1944 Bretton Woods meeting, an international institution had been created for the first time whose central purpose included that of directly promoting rising standards of living in all poorer countries: the International Bank for Reconstruction and Development (the IBRD).

Some scholars have questioned whether policymakers at this time were in fact committed to the idea that the international community had a new responsibility to promote economic development in lower-income countries. Richard Peet (2003: 111), for example, has suggested that “the IBRD was a mere afterthought. What little exchange there was concerning the IBRD centred on its possible role in the post-war reconstruction of Europe.”³ Even very knowledgeable historians of the World Bank have suggested the lead architects of Bretton Woods were largely uninterested in the development function of the Bank. In their words, “development arrived almost by accident and played a bit role at Bretton Woods” (Kapur et al., 1997: 68). This general view is also supported by Gerald Meier (1984: 9), who argues: “The political power lay with the United States and Britain, and from the outset it was apparent that issues of development were not to be on the Bretton Woods agenda.” He goes even further to suggest that even the poorer countries at Bretton Woods were not really committed to a broad new international development agenda: “At Bretton Woods, the developing countries tended to view themselves more as new, raw-material-producing nations and less as countries with general development problems. Comprehensive strategies of development and policies to accelerate national development were yet to be identified.”

This attempt to downplay the development content of Bretton Woods has been reinforced by another body of literature which claims that the international development project was ushered in by US president Truman’s 1949 speech announcing his Point Four program. In that speech, Truman famously declared that “we must embark on a bold new program for making the benefits of our scientific advances and industrial progress available for the improvement and growth of underdeveloped areas” (quoted in Rist, 1997: 71). According to this literature, Truman’s popularization of the term “underdevelopment” was a key strategic move that justified the large-scale international intervention in poorer countries which followed in the 1950s and afterwards. As Gilbert Rist puts it, “Point Four inaugurated the ‘development age’” (Rist, 1997: 71; see also Sachs, 1990; 1992; Esteva, 1992; Escobar, 1995). The “post-development” literature invokes this history in order to suggest that international development has been from the start “a top-down, ethnocentric, and technocratic approach” which has been designed largely to serve US economic and strategic interests during the Cold War (Escobar, 1995: 44). This literature does not see the Bretton Woods negotiations (or the content of the UN Charter) as terribly significant to the history of the origins of international development.

In my view, both of these bodies of literature incorrectly downplay— or worse, ignore—the significance of the Bretton Woods negotiations during the early 1940s. The international promotion of rising living standards in poorer countries was in fact a central objective of the policymakers involved in the negotiation of the Bretton Woods institutions. They—rather than Truman—deserve the title of being the pioneers of the practice of international development. Moreover, when we examine their role, we arrive at a rather different understanding of the content and motivations behind this innovation in world politics. Who were these pioneers, and what explains their support for international development?

US support for international development: assuring freedom from want

To begin with, US policymakers played a central role. It is often forgotten that, from the earliest stages of post-war planning, US president Franklin Roosevelt made the goal of “freedom from want” everywhere in the world one of the central pillars of his thinking about the world that the United States would try to build after the war. This objective was set out very clearly in the Atlantic Charter that he signed with Winston Churchill in August 1941. The sixth point of their eight-point statement declared the goal of a peace “which will afford assurance that all men in all the lands may live out their lives in freedom from fear and want.” The fifth point, although less well known, was equally relevant, declaring their “desire to bring about the fullest cooperation between all nations in the economic field, with the objective of securing for all improved labor standards, economic development, and social security” (quoted in Borgwardt, 2005: 304).

After their meeting, Churchill distanced himself from the notion that the Atlantic Charter applied everywhere in the world. But Roosevelt was strongly committed to this idea. In his mind, the universal commitment to “freedom from want” was tied to the New Deal idea that one of the effective ways to guarantee political stability was to protect individuals’ economic security (Borgwardt, 2005: 30, 34–36, 48–51). Roosevelt began at this time to envision a kind of “internationalization” of this New Deal principle: that is, that a commitment to promote the economic security of individuals throughout the world could help boost post-war international political stability. In press conferences after the Atlantic Charte...

Table of contents

• Routledge Global Institutions
• Contents
• Illustrations
• Contributors
• Foreword by the series editors
• Foreword
• Acknowledgements
• Abbreviations
• Introduction
• Part I Development and the governance of poverty and inequality
• Part II Bretton Woods and the amelioration of poverty and inequality
• Part III Promising poverty reduction, governing indebtedness
• Part IV Complex multilateralism, public-private partnerships and global business
• Part V Horizontal inequalities and faith institutions
• Index