International Institutions

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Although there has never been a clear agreement on what the term development means, much thinking on the issue has been governed and guided by several international institutions established in the aftermath of World War Two. Most of these institutions were set up to promote peace, prosperity and ‘development’. However, their role in international relations over the last 65 years has proved to be quite controversial.

Two of the most influential international institutions are known as the Bretton Woods Institutions, namely the International Monetary Fund (IMF) and theInternational Bank for Reconstruction and Development (more commonly referred to as the World Bank). Both organisations promote (and often demand) a neo-liberal, free-trade global economic system. In the wake of World War Two, both institutions were primarily concerned with rebuilding European countries, however, during the 1960’s as many African countries gained their independence they applied for membership of the IMF and the World Bank, applying for loans to construct newly formed countries, thus the institutions began to focus more on the ‘developing world’.

Both institutions have drawn heavy criticism from members of the development community for demanding that developing countries make changes to their economic policy to follow a neo-liberal model. In many cases these policies proved detrimental to developing country economies, resulting in increased poverty and an un-payable debt burden. They have also been criticised because of inequality in their voting and decision making system. The USA and European countries hold the majority of the voting rights and have been accused of protecting their own interests at the expense of the welfare of other countries. In the case of the IMF, the richest 9% of the world’s population hold 40% of the voting rights and the poorest 31% have 5% of the voting rights.

Historically the leader of the World Bank is a US appointee and the leader of the IMF is a European appointee. Although the institutions are very similar in ethos and methods, the main difference between them is that the IMF is mainly a cooperative institute concerned with monitoring the balance of payments and currency exchange rates while the World Bank is principally a development institution.

The World Trade Organization (WTO) is an international organisation that oversees a large number of agreements defining the “rules of trade” between its member states. Its broad goal is the reduction or abolition of international trade barriers. Located in Geneva, Switzerland, it has 148 member states. The organisation is relatively new, founded in 1995 but has its origins in 1945 when the Bretton Woods Institutes were established, when it was decided that an International Trade Organisation should be established to promote free trade and the scrapping of protectionist measures. These policies have provoked similar criticism as the IMF and the World Bank have from the development community for promoting damaging neo-liberal policies.

The United Nations (UN), founded in 1945 as a successor organisation to the League of Nations is committed to maintaining international peace and security, developing friendly relations among nations and promoting social progress, better living standards and human rights. There are 192 member states of the UN, each of which has a vote and a voice in UN decisions. The organisation is deeply involved in setting the international development agenda. Two the most popular development documents have emerged from the UN, the Universal Declaration on Human Rights in 1948 laying out the basic rights that every person is entitled to and providing a framework for international law and more recently, the eight Millennium Development Goals aiming to eradicate poverty and inequality by 2015.
Despite the UN’s mandate to maintain global peace and security, the organisation has been heavily criticised for several gross failures. For example during the Rwandan genocide in 1994, 800,000 people were killed while the UN did very little to intervene or prevent the genocide. One of the possible reasons for this was because it was not the in the strategic interest of the USA of France, two of the permanent members of the UN Security Council.

Other Institutions in Development

Non Governmental Development Organisations (NGDOs) exist for a variety of reasons. They may be dedicated to providing humanitarian aid, establishing long-term educational projects or addressing environmental issues while others campaign and lobby government and influential bodies. They may be secular or religious. They can vary in scale from multinational, multi-million dollar agencies to small grassroots community groups. Although NGDOs are independent of national governments, many governments and multilateral institutions recognise NGDOs as important partners in development. One of the major advantages of NGDOs is that they can bypass corrupt national governments and ensure that aid reaches the people who need it most. However, NGDOs, like every other development actor have also been subject to criticism. The scale of work that NGDOs do is usually tiny in comparison to the scale of the problems. Many organisations have been criticised for being based on a supposed “do-gooder” philosophy and often perpetuating a paternalistic and unequal relationship between the developed and the developing world. Closer to home Dochas, the Irish Association of NGDOs has developed a Code of Conduct in relation to Images and Messages of the Developing World to address one of the negative results of many NGDOs; their portrayal of undignified and uninformed images of the developing world in their advertising and publicity. These images create, at best, a distorted understanding of the developing world.

Transnational Corporations (TNCs) are corporations or enterprises that work in more than one country. Today there are over 50,000 such companies. They are a cause of and product of an increasingly globalised world. 25% of all global trade is controlled by 200 companies and 51% of the world’s largest economies are TNCs. As such they are highly influential on the global trade agenda. Many TNCs have been accused of committing human rights abuses and exploiting poor people in order to maximise profits.

Accusations have included using child labour and sweat shops (where employees work in extremely poor conditions for very long hours and very low wages, often forced to sleep in their factories) and damaging the environment and the health of their employees through overuse of pesticides.

Many activists choose to boycott TNCs for their immoral practices, others are pushing to introduce ethical practices into TNCs as they believe that it is only with the cooperation of TNCs that a just system of global trade can be established.


Regan, C. (ed.) (2006) 80:20 Development in an Unequal World


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