ABSTRACT
In the era of increasing economic and financial globalization – the closer integration of the countries in the world economy through increased flow of goods and capital – international financial institutions have become of great importance. This is largely because economic globalization and its effects are managed in significant part by international financial institutions such as the International Monetary Fund (IMF) and the World Bank. Few philosophical works have considered in detail the moral dimensions of international
financial institutions. As Thomas Pogge notes, philosophical discussion of international ethics has focused on important questions relating to just war (particularly the rules governing the use of force) and individual duties to provide aid to needy non-compatriots (Pogge 2005b: 1). For the most part, it has not been concerned with questions about the design and conduct of existing international institutions such as the IMF and the World Bank. There is, however, good reason to engage in the moral assessment of international institutions such as the IMF and the World Bank. Two points are important here. First, as John Rawls argues in his prominent work on
domestic justice, “the basic structure is the primary subject of justice because its effects are so profound and present from the start” (Rawls 1999a: 7). On Rawls’s view, from the perspective of justice, the social and political institutions that comprise the basic structure are of central importance because they inevitably have a significant impact on how people’s lives proceed. Something similar can be argued of international financial institutions and their effects on economic globalization. People’s life prospects and expectations are inevitably determined in significant part by the international economy and the benefits it produces and distributes. International financial institutions manage the economy and the benefits it produces and, as a result, inevitably have a profound effect on people’s everyday lives and how well they proceed. In at least this sense, the IMF and the World Bank are the international analogue to those institutions that are part of the domestic basic structure. For this reason international financial institutions, such as the IMF and the World Bank, should be considered among the primary subjects of international justice.1 Second, as Rawls argues, “justice is the first virtue of social institutions” (ibid.: 3). On his view, “laws and institutions no matter how efficient and wellarranged must be reformed or abolished if they are unjust” (ibid.). However, it can be argued that justice is not only a virtue of social institutions at the domestic level but is also the first virtue of institutions at the international level. If this is correct, then in so far as we ought to be
concerned with justice in the domestic sphere, we ought also to be concerned with justice in the international sphere. We ought to be concerned with the extent to which international financial institutions are unjust and how they can be made more just. These are the fundamental reasons for engaging in moral assessment of international financial institutions such as the IMF and the World Bank. In this chapter, the main aim is to explore some of the central moral critiques of international
financial institutions as well as proposals to overcome the moral problems that they face. We begin with a brief discussion of the history, function and structure of the IMF and the World Bank. We then turn to the moral critique of these institutions, considering both outcome-and process-based concerns. We close by considering some initial proposals to overcome the moral problems that are discussed in the previous section.
