1.1 Introduction
Weighted voting is fundamental to the workings of the IMF and World Bank. The principle that all member countries have the right to vote but cast different numbers of votes to reflect key differences between them was enshrined in the original Bretton Woods constitutions and has dominated their work ever since. This has been shown to have resulted in practice in a severe democratic imbalance with a voting structure that is massively biased against the developing and poor countries. Many of the current calls for reform propose changes to the weights in order to increase the voice of the poor in decisions that affect their interests. Such proposals for reform are not the central concern of this chapter and we will avoid discussing them in as much detail as they deserve, leaving it to others who have done so more ably and persuasively.
Instead, this chapter will argue that a further bias exists, which results from the weighted voting system itself. It is possible to correct this bias by suitable choice of weights. However, in order to do so we must understand the characteristics of weighted voting systems in terms of their implications for voting power that derive, not directly from the weights, but from the system as a whole. It is first necessary to establish that a member country’s voting power is not the same as its weight: its power is its ability to decide the issue when a vote is taken whereas its weight is just the number of votes it has the right to cast; the former is a fundamental property of the voting system and the weights that can only be revealed by suitable analysis, whereas the latter is a superficial feature. Because this distinction is often ignored, weighted voting often leads to undesired or unexpected properties. We analyse members’ voting power and find that the Bretton Woods institutions (BWIs) are even more undemocratic than they are intended to be because the USA turns out to have much more voting power than its weight at the expense of the other members. This is another argument for reforming the weights. More generally the distinction between power and weight adds to the case for decoupling the allocation of votes from both the provision of and access to finance.
It is frequently suggested that the current system of weighted voting embodies democratic accountability if one accepts the principle that voting rights should be attached to the supply of capital in the form of quotas,1 since it guarantees that voting power is allocated according to members’ respective financial contributions. This argument has more force today than it has had in the past with the decline in the so-called ‘basic votes’ and increase in the variable component of voting weight to virtual dominance.2 In fact the distorting effect of weighted voting that we describe here makes this claim far from being true, even in its own terms.
As a general principle weighted voting is an attractive idea because it offers the prospect of designing an inter-governmental decision-making body that could have a real claim to democratic legitimacy—for example, in an institution of world government where a country’s voting power reflects its population. But it is important to be clear about what we mean by weighted voting. Systems based on the use of a bloc vote, where a country or group of countries acting together casts all its voting weight as a single unit, as in the BWIs, cannot be relied on to work like that and in general do not, as we will show. On the other hand if the system is one where a country is represented by a number of delegates each of whom has one vote that he is allowed to cast individually, rather than having to cast their votes as a unit, then there is no problem. The latter is simply a representative democracy and the number of votes or delegates is equivalent to the country’s power. The argument we are advancing here holds only in the former case, when the votes cannot be split.
We will use the method of voting power analysis to explore the relationships between the voting weights, the decision rule and the resulting voting powers of the members. This requires us to analyse all the voting outcomes that can occur, and in each case to investigate the ability of every member to be decisive—that is to be able to decide whether the vote leads to a decision or not. An important aspect will be the use of voting power indices to make comparisons between the powers of the different members. Our principal result is that the voting power of the USA turns out to be far greater than its quota would warrant. We also use the method to investigate two important hypothetical scenarios. First, the power implications of a redistribution of voting rights that is being seriously proposed and enjoys widespread support, the restoration of the basic votes to their original 1946 level. The second scenario we consider is the Executive Board as a representative body in which the constituencies are really taken seriously as such. The main result here is that this system considerably enhances the power of the smaller European countries, especially Belgium and Netherlands.
We begin with an outline of the principles of voting power analysis in the next section. Then in Section 1.3 the system of governance of the IMF and World Bank is outlined, in Section 1.4 we present the analysis of the Board of Governors, and in Section 1.5 that of the Executive Board. In subsequent sections we use voting power analysis to study the effects of structural changes that have been proposed: reweighting by restoring the basic votes to their original 1946 level of 11.3 per cent of the votes, in Section 1.6, and in Section 1.7 we consider the voting power implications for making the constituency system of the Executive Board democratic by introducing formal voting within constituencies.
1.2 Weighted Voting and Voting Power Analyis
It is customary, in the longuage of the BWIs, to refer to the number of votes a member country has as its ‘voting power’. No doubt this is what its voting power is intended to be, but it is certainly not its power in the true sense of the term, but its weight, in the sense of weighted voting. A country’s power is its capacity to be decisive in a decision taken by vote, measured by the frequency with which it can change a losing vote to a winning one. In general this has a rather imprecise relation with its weight. In reality its power depends on all the other members’ weight as well as the voting rule by which decisions are taken.
An important real-world example makes ...
