UNDP Report: Slow Economic Institutional Reform
UNDP by Victoria Cole, July 27, 2015 Adjust font size:
The United Nations Development Programme, in partnership with the CCIEE and the SIIS, published a report entitled, "Rebalancing Global Economic Governance – Opportunities for China and the G20 beyond 2015." The report highlights the importance of global governance and sustainable development to "add value to ongoing debates and inform the work of policy makers and practitioners in China as well as around the world."
How Can Global Economic Governance More Actively Support Global Development Cooperation? (Chapter 2)
2.1.1 Stalemate versus Reform - What Future for Traditional Institutions?
More recently, geopolitical competition has grown among major powers, creating frictions within the global system. While the financial crisis and resulting economic instability highlighted the need to include key emerging economies in global economic management, this awareness has not translated into clear institutional change and reforms to the Bretton Woods Institutions (BWIs) and the World Trade Organization (WTO) have not yet taken place.
The only platform that has emerged in this way is the G20, which emerging economies have used to push for reforms to international financial institutions (IFIs). Efforts to address the vote shares held by representatives in the IMF and the World Bank have been stalled by the opposition of U.S. Congress. It is important to note that the approval of these reforms would double IMF resources.
Reforms to the World Bank are less contentious – but no less important – than reforms to the IMF. Following two reform packages in 2008 and 2010, it was expected that the World Bank would be recapitalized by US$86.2 billion via general capital increases and special capital increases.
The core agency of the World Bank, the International Bank for Reconstruction and Development (IBRD), has also undergone reforms. A series of measures to safeguard the interests of the LDCs, such including Sub-Sahara African countries and doubling basic vote shares, was approved in 2012. However, the implementation process has been very slow, and the IFC's capital increases have been similarly unmet.
According to an agreement reached by the World Bank Board of Governors in 2010, the World Bank will review its share-holding structure every five years. The board also agreed to complete a review of the Bank before its Annual Meeting in August 2015. Despite some relative progress, some strong resistance still persists from advanced economies who are dissatisfied with both the review process and formula adjustments.