Date: Thursday, January 25, 2007
Time: 12:00 pm – 2:00 pm
Venue: Oxfam America Conference Room, 1100 15th Street NW, Suite 600, Washington, DC 20005
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.
For more information: Please visit Professor Raffer’s Website – Section B “IFIs and Financial Accountability”. In particular you may wish to view his most recent article “International Financial Institutions and Financial Accountability” in Ethics & International Affairs, Volume 18.2 (Fall 2004)
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.
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