A Roadmap for Integrating Human Rights into the World Bank Group

Post by Alex Salgado and Hanna Ballón

The purpose of the report is to argue that human rights are an integral part of effective sustainable development, and thus should be explicitly considered in all World Bank Group (WBG) investment decisions. The authors do not encourage that the WBG should shifts its identity from development to human rights institution, but rather that an explicit and systematic integration of human rights into WBG operations could improve its effectiveness. Despite this clear linkage, there has been WBG resistance in integrating human right policies into their practices, internal constraints being the major factor limiting this. The WBG board has failed to reach consensus on this subject. It is necessary to highlight though that some WBG’s activities do protect and promote human rights but the integration is low.

Authors begin by describing the changing nature of the WBG, and assure us that it is an organization that has been reinventing itself in order to meet new challenges in the effort to serve the global poor. Furthermore we are taught that as the challenges have grown in recent years there has been a growing understanding both inside and outside the WBG that human rights can help empower communities, strengthen risk management practices, and improve development effectiveness. The reading continues by recounting how the WBG is creating new opportunities to integrate human rights standards into its operations, by stating that governance and policy reforms are opening opportunities to dialogue on human rights risk management 

Authors then continue by expressing the links between human rights and development. They state that research suggests that human rights are a critical part of development and that the absence of human rights standards contributes to poverty. Additionally they state that although human rights are not synonymous with opportunities, capabilities and freedoms needed to eliminate all forms of poverty, they can help eliminate the most important and fundamental drivers of poverty.

The authors continue by suggesting how human rights integration should be implemented. They consider that an important first step is making the “principles” that underlie human rights part of operations. They further state that as most of the WBG’s clients cannot meet all of the human rights obligations: “respect, protect, and fulfill” human rights, adjustments must be made, depending on the demands of clients and on harmonization with the activities of other development institutions. Furthermore in the case adjustments can’t be made, authors believe governments, development institutions, and companies should try to prevent human rights violations.

The World Bank has accomplished several things in regard to development that have indirectly contributed to human rights. For example, in 2009, the Nordic Trust Fund of $20 million began to work within the World Bank with the intention of raising awareness of the link between human rights and development. Even over a decade before, the World Bank Inspection Panel was created to accept complaints from the communities affected by World Bank-financed activities. Many of the concerns brought by the people, however, periodically directly pertained to the negligence of human rights in the projects. Therefore, the authors argue that there are several gaps left in the policies that have excluded human rights consideration.

There are four main identified gaps that lead into the other. The first is unresolved legal obligations of the World Bank Group (WBG) that relate economic activities with international human rights norms. Human rights are largely influenced politically and as the WBG works closer with government reforms, they should include this important aspect. While this was done to prevent an imposition of Western values into countries, it also caused a lack of open dialogue about human rights issues within the board of directors. Because of this, the staff is uninformed about these issues and cannot discuss them effectively with clients. Finally, there are inconsistencies with their environmental and social policies. For example, it does not ensure there are no conflicts between their projects and the country’s international human rights obligations. Additionally, although the World Bank Inspection Panel does exist for the community, its awareness in the community remains limited.

            To remedy this, the authors make an eight-step recommendation with deadlines. First is to openly discuss human rights issues within the WBG so they can naturally become more present and solid in their policies. The next goal is to take the clients duties with the international human rights law into consideration. Even though they have no obligations to these laws, their clients do. This leads to the third goal, which is to bring up human rights issues with their clients to assess the risks and outcomes. This way they can incorporate human rights standards into their policies, the fourth denominated goal. As the fifth goal, fhe WBG should stop their engagement in projects that displaces people from their homes.

Sixth, the authors recommend using human rights approach as a method of managing risks. This is especially useful in fragile environments or in countries where human rights have been abused. Next, the authors recommend that the WBG protect those who are abiding to their projects from opposing forces that will often torture or show hostility to these beneficiaries. Lastly, after the WBG becomes more confortable with human rights, they should use it as a strategy to do business with countries that have unstable performance in this area.

In conclusion, although the WBG has rejected human rights in its policies in the past, the authors suggest that by implementing this as a strategy, they will become more successful in engaging with their clients in the future.





Wrapping up

Dear all:

On Tues and Thurs I will be wrapping up the class with a tour de force in keynote of the entire semester. This means that debates will be “downgraded” a bit to short individual presentations of 5-7 minutes max.

Also, to save you time, on Thursday we will have Romanian food cooked by yours truly.


Thank you all

My congrats to you for a great presentation today. As a coder, I know how much goes into something like this so your result is very appreciated. I am looking forward to the final product.

Sincerely yours.

Empirical evidence on labor standards from The Economist

Racing to the bottom

GLOBALISATION sceptics often warn of the pernicious effects on labour standards of international competition for investment. In the race for foreign business, the argument goes, countries cut back on regulation and enforcement of decent working conditions in order to lower labour costs.

But are tragedies like the Rana Plaza collapse in Bangladesh in April freak occurrences or the sign of a wider problem of falling labour standards? There is not a great deal of economic research on that question. Evidence for a race to the bottom is pretty patchy. But a recent paper* (earlier, non-paywall version here) makes for uncomfortable reading.

The paper looks at data for 135 countries over 18 years (annoyingly, only up to 2002). It focuses on measures of labour rights: such as whether workers can bargain collectively, the right to protest and the elimination of all forms of forced labour. In total there are 37 indicators (unfortunately the index includes neither minimum wages nor employment benefits). A country can achieve a maximum score of 56. The mean score across the sample of 135 countries is 26.6.

Some results are rather unsurprising. Countries with better civil liberties tend to have higher labour standards. Countries in the OECD, which are richer, do better than those outside (only one OECD member, Turkey, has a score less than 15). But other results in the paper are alarming. During the 1980s and 1990s, the labour-rights index fell precipitously (see the blue line below). The authors reckon this is down to competition for foreign direct investment.

The authors conduct a series of regressions and reveal the factors that influence the labour-standards index. And there is evidence of between-country competition. If the labour standards across all other countries decline, those of the excepted country also tend to fall. The regressions also show that membership in the World Trade Organisation, a multilateral institution which aims to promote trade, leads to a lower labour-rights index.

But the race to the bottom operates more subtly than most people suppose. The regressions suggest that while countries do compete with each other by instituting laws that are unfriendly to workers, such competition is not that pronounced. The real problem is that countries compete by enforcing labour laws less vigorously than they might—leading to increases in violations of labour rights prescribed in local laws. Competition between countries to attract investment is less in rules than in their practical application.

* Davies, R. B., & Vadlamannati, K. C. (2013). ‘A race to the bottom in labour standards? An empirical investigation’. Journal of Development Economics (103) 1-14.

So you thought Europe is indebted….

This article shows that official statistics substantially underestimate the
net foreign asset positions of rich countries because they fail to capture most of
the assets held by households in offshore tax havens. Drawing on a unique
Swiss data set and exploiting systematic anomalies in countries’ portfolio
investment positions, I find that around 8% of the global financial wealth of
households is held in tax havens, three-quarters of which goes unrecorded. On
the basis of plausible assumptions, accounting for unrecorded assets turns the
eurozone, officially the world’s second largest net debtor, into a net creditor. It
also reduces the U.S. net debt significantly. The results shed new light on
global imbalances and challenge the widespread view that after a decade of
poor-to-rich capital flows, external assets are now in poor countries and debts in rich countries.