The New Rules for Global Finance Coalition
Invites you to a brown bag lunch presentation and discussion of
"Introducing Financial Accountability to the IFIs: A Necessary and Overdue
Reform"
With
Kunibert Raffer
Thursday, January 25, 2007
12:00 pm – 2:00 pm
Oxfam America Conference Room
1100 15th
Street NW, Suite 600
Washington,
DC 20005
Directions: Oxfam is
located at the corner of 15th & L Street, NW, on the corner next
to Radio Shack. The closest metro is Farragut North on the Red Line.
Click
here for a Map.
All are welcome, but RSVP Required due to space constraints.
Please RSVP to
jbaker@new-rules.org
While useful
proposals to reform International Financial Institutions (IFIs) have been
widely discussed, the lack of any financial accountability has received
little attention. This is all the more surprising as damages negligently or
even willfully caused by IFIs increase their incomes and importance. IFIs
gain financially from their own negligence by extending new loans necessary
to repair damages done by their own prior loans. One failed adjustment
program calls for the next. IFI-flops generate IFI-jobs and additional
revenues. Borrowers (including many of
the world’s poorest people) must pick up the bill for
tortuous damage caused by IFIs.
This economically perverted incentive system rewarding errors, negligence,
and even violations of the very constitutions of IFIs is absolutely at odds
with the principles on which Western market economies rest. It must be
brought to an end. In a market economy anyone must face the economic
consequences of their actions and decisions. If consultants give advice
negligently or without obeying minimal professional standards, they have to
pay compensation for the damage they have caused.
National liability and tort laws serve
the purpose of compensating those suffering unlawful damages and of
deterring such behavior.
The idea of
financial accountability is presented, showing how easily reforms making
IFIs financially accountable can be implemented. Embracing financial
accountability would bring IFI-operations closer to the intentions of their
founders, who wanted IFIs subject to the basic legal and economic concepts
of financial accountability, not exempt from it. The market mechanism and
its beneficial incentive system must finally be brought to IFIs. Essential
legal principles must also be applied when they protect the globe’s poorest.
Kunibert Raffer
is the Associate Professor at the Department of Economics of the
University of Vienna and Senior Associate of the New Economics Foundation
(London); 1979-80 and 1983-84 consultant to UNIDO; participation in UNDP
research projects; on Sir Hans (H.W.) Singer’s invitation Visiting Fellow at
the Institute of Development Studies, Sussex in 1989; Honorary Research
Fellow of the Department of Commerce, University of Birmingham, UK
(1990-03); he wrote papers for the UN’s
Financing for Development Civil Society Hearings, the OPEC Fund
for International Development, and the G24, including an expertise on the
SDRM ("The Final Demise of Unfair Debtor Discrimination? - Comments on Ms
Krueger's Speeches") to be distributed by the G-24 Liaison Office to the
IMF's Executive Directors representing Developing Countries. Over two
decades he co-operated with the late Sir Hans Singer. They co-authored two
books. His present work focuses on debts and trade, especially on reforming
debtor-creditor relations. Homepage:
http://homepage.univie.ac.at/Kunibert.Raffer
Professor Raffer's visit is
sponsored by the Democratic Governance and Parliamentary Oversight (DGPO)
Project of the New Rules for Global Finance Coalition. For more information
about this project, see:
http://www.new-rules.org/dgpo.htm
