International Organisations and the Democratic Deficit - Essay Example

International Organisations and the Democratic Deficit The international organisations, such as WTO and OECD impede the economic development of the developing countries. These organisations suffer from a democratic deficit. The following discussion proves this contention. The international organisations seized with trade liberalisation are the WTO, International Monetary Fund (IMF), and the OECD. Prior to the advent of the WTO, liberalising trade had fallen under the purview of the General Agreement on Tariffs and Trade (GATT). It had been declared by the WTO that it was the sole international organisation that dealt with the international trade rules between nations. The primary function of the WTO was to promote and preserve the smooth flow of trade[Ros05]. In addition, the OECD relies upon several acts and legal instruments to enforce the liberalisation of trade. In fact, membership to the OECD is provided only upon the liberalisation of trade by the applicant nation. In addition to trade, the OECD undertakes other functions, which are around 30 in number. The WTO has few devices to fall back upon, whereas the IMF tends to make trade liberalisation a sine-qua-non for the sanction of loans[Ros05]. As such, the developing world has been totally disregarded by the global powers, in the decade following the World Trade Organization (WTO)’s pledge to implement changes to promote development. A proposal had been made at that juncture to alter the WTO, so that it would make the needs of the developing countries central to its international trade negotiation agenda. To this end, the Ministerial Declaration was adopted at the Doha Development Round of trade negotiations. This seemingly momentous development transpired on 14 November 2001[Wal11]. In addition, the international organisations have increased their control over the national development strategies of the developing nations. This control is exercised via regulations developed by these organisations[Wad03].The objective of these new regulations is to increase the latitude of the developed nations’ corporate sector to enter and exit domestic markets at will. Moreover, the obligations and restrictions upon these corporates have been drastically reduced. This movement has the US and UK in the vanguard, and the outcome is the proliferation of international market opening and the protection of technology-rent[Wad03]. These goals of the developed nations are realised through multilateral economic organisations, international treaties and bilateral agreements. As such, the developed nations have combined forces to exploit the developing nations, and to meddle with their economies, laws and administration. Globalisation has compelled the developing world to further regulate their domestic firms and their policies. The European Union (EU) and the US had made a general commitment to increase the market access of the developing nations. However, this has not transpired, and the US and the EU have restricted the entry of the developing nations to substantial areas of their economy. The veritable plethora of bilateral and multilateral agreements serve the insidious purpose of preventing the third world countries from undertaking the contemporary industrial and technology polices of the developed nations[Wad03]. Moreover, the pro-development changes promised by the WTO have failed to materialise. On the other hand, the developing nations have been relegated to the background, in no uncertain terms, by the economic and political interests of the developed world. The Doha Development Round proved to be a fiasco, with regard to rendering fairness in trade. It is in this milieu that the criticality of organisations that work towards the elimination of subsidies, achieves prominence. Some of these organisations are Traidcraft and Fairtrade Foundation[Wal11]. Furthermore, there is tremendous potential for real development to take place across the world. However, realisation of this potential requires the international institutions to promote domestic prospects for development. This involves meticulous adjustment of international rules that support development, better representation at the global level, and greater openness and transparency in procedures and better decision making mechanisms in the international institutions[Nah06]. However, the tendency among the members of the WTO to express misgivings regarding the validity of fundamental features of the multilateral trading system, has created several concerns of internal legitimacy. Such reservations are usually expressed with respect to the developing nations. These members concentrate upon the application and interpretation of WTO norms in the dispute settlement system, as it is difficult to directly challenge these norms[Fol12]. In addition, several of the developing countries had declared that the Uruguay Round rules were prejudicial to their interests. Moreover, the absence of consensus regarding several of the substantive features of the WTO law have rendered the latter non-justiciable. It has been contended that the WTO dispute settlement mechanism enjoys a surfeit of power, which creates novel substantive rules[Fol12]. These rules alter or expand the legal agreements that describe the criteria. Moreover, the developed nations had pledged to make the Doha round a development round. However, the reality had been that these nations had abused their clout with the WTO to compel the developing economies to lay bare their economies for their unbridled assaults. Characteristically, the developed nations had not reciprocated by allowing the developing nations to enter their domestic markets[Gil12]. Furthermore, foreign Direct Investment (FDI) is very important for the developing world. However, there have to be systems, firmly in place, to ensure that such investment provides tax revenues. The preliminary requirement is that there should be an equitable and efficient mechanism to ensure proper apportioning of the tax base betwixt the host and home nations, and between the developing and developed nations[OEC05]. In addition to the development of equitable and efficient tax structures by the concerned developing nations, the OECD nations and international organisations have to promote comprehensive tax practices by their investors. One of the devices that could play a major role, in this endeavour, could be the “Exchange of Information Agreement”. The OECD had developed certain instruments to promote corporate responsibility, and this included taxation. Some of these instruments were the “Convention on Combating Bribery of Foreign Public Officials in International Business Transactions” and the “Guidelines for Multinational Enterprises”[OEC05]. In general, developing nations have a paucity of infrastructure, limited access to technology and finance, and a dismal absence of capacity both institutional and human. It defeats logic to undertake measures that will take care of these requirements simultaneously, for the sake of political economy, capacity and financial reasons. Domestic absorption capacity tends to be restricted, even if there is an inflow of finance from external sources. Consequently, it is indispensable to prioritise the more powerful impediments to the development of trade. At the same time, the aid provided to trade has to be structured. This should ensure that the emphasis is upon removing the constraints that adversely affect trade and productivity to the maximum extent. Nevertheless, the requirements for such concentration, is political leadership and the combined analytical work of government officials, representatives of the private sector, research scholars and other specialists[WTO14]. Perhaps, the most important measure to be adopted, in this regard, would be the involvement of the development community with an agenda for reform. Moreover, in the contemporary world, the WTO influences critical features of everyday life, across the world. This justifies the clarion call to make it a transparent system. The present day negotiations to generate new trade agreements tend to be shrouded in secrecy. In addition, disputes regarding the extant rules are chiefly resolved in camera. During such negotiations, the developing nations are not allowed to participate, and they are merely provided with the outcome of these negotiations[Wad03]. This state of affairs makes it imperative to compel the WTO to reduce the existing ambiguity in the capstone agreements. The latter have been designed to promote and preserve the interests of the developed world. Moreover, the WTO has to be forced to undertake less opaque operating procedures and rules; and publish a record of discussions and voting. Furthermore, the WTO should be made to obtain replies from the chairpersons of negotiating committees, as to why they had rejected certain proposals, whilst adopting others in the draft declaration. This is not a farfetched demand, as a number of monetary authorities have commenced to disseminate the entire minutes of their decision making meetings. Some of these monetary authorities are the Federal Reserve and the Bank of England. Such disclosures have proved to be successful. Moreover, several nations have made it mandatory for their judiciary to furnish the reason behind their rulings[Wad03]. The WTO, per se, should be rendered subject to a greater scrutiny by the non-governmental organisation (NGO) s. Such observation is conducted by the Bank Information Center upon the World Bank, which is an NGO located in Washington DC. In addition, the Bretton Woods Project of London watches the activities of the World Bank. The WTO takes an active part in policy making and is much more than a mere facilitator of negotiations between member states. This requires its staff to be more representative. At present, 80% of its staff are from the developed world, and the population of the developed world is just a fifth of the total population of the member states. China, the perceived strategic competitor of the US, has gradually deployed its nationals into the WTO and other international organisations. The international development agenda could undergo significant change, as China’s military and technological capability increase to the extent that it can pose a challenge to the present US-European regime that dominates the world[Wad03]. To conclude, the international organisations, such as the WTO and the OECD have consistently adopted a biased attitude towards the developing nations. These organisations tend to be controlled by the developed world, and the latter have the least interest in promoting the economic development of the third world. As a part of this prejudicial treatment, the developing nations are not permitted to engage in the decision making of these organisations. The regulations of these organisations severely impact the trade of the developing countries. The several negotiation rounds of the WTO have clearly established the hegemony of the developed world. The above discussion has clearly established that the international organisations, such as the WTO and the OECD function in a manner that is detrimental to the economic development of the developing nations. Thus, it can be surmised that these organisations suffer from a democratic deficit. References Foltea, M., 2012. International Organizations in WTO Dispute Settlement: How Much Institutional Sensitivity?. Cambridge, UK: Cambridge University Press. Gilabert, P., 2012. From Global Poverty to Global Equality: A Philosophical Exploration. Oxford, UK: Oxford University Press. Nahtigal, M., 2006. International institutions, international legal norms, and the millennium development goals. Proceedings of the Annual Meeting (American Society of International Law), Volume 100, pp. 425-427. OECD, 2005. The Development Dimension Policy Coherence for Development Promoting Institutional Good Practice. Paris, France: OECD Publishing. OECD, n.d. Aid for Trade: Is it working?. [online] Available at: [Accessed 5 October 2014]. Rose, A., 2005. Which International Institutions Promote International Trade?. Review of International Economics, 13(4), pp. 682-698. Wade, R. H., 2003. What Strategies Are Viable for Developing Countries Today? The World Trade Organization and the Shrinking of 'Development Space'. Review of International Political Economy , 10(4), pp. 621-644. Walker, A., 2011. The WTO has failed developing nations. [online] Available at: [Accessed 3 October 2014]. Read More