chapter  7
21 Pages

Accountability mechanisms of multilateral development banks: powers, complications, enhancements SURESH NANWANI

Multilateral Development Banks (MDBs) such as the World Bank and the ADB are mandated to promote and finance the economic development of borrowing or developing countries. They lend primarily to governments in more than 150 developing countries through project loans, programme loans, private-sector investments including equity investments, and technical assistance intended to benefit billions of people.1 Their lending operations cover various sectors, including transport and communications; finance; energy; water, sanitation and flood protection; law, justice and public administration; and agricultural and natural resources (see also the chapters by Decker and Hammergren in this volume). In recent decades, MDBs have increasingly encouraged external participation

in MDB policymaking and practice. For example, the World Bank has begun to emphasize the value of greater collaboration with civil-society organizations in achieving development results. The Asian Development Bank (ADB) has similarly stressed its commitment to working with its civil society2 partners to promote economic growth. These banks have gradually enabled NGOs to raise their concerns from dialogue to consulting and collaborating through gateways such as the World Bank Participation and Civic Engagement Group and Global Civil Society Team and the ADB NGO and Civil Society Centre. At the same time, individuals affected by poorly-designed and/or implemented projects have increasingly vocalized their grievances and demanded a response from the MDBs.3 These developments have been buttressed by the creation of ‘accountability mechanisms’ – that is, gateways for private individuals and civil society groups to file claims with these and other banks (see Table 7.1). This chapter tracks the evolution of these mechanisms and assesses their

effectiveness by focusing in particular on the accountability mechanisms of the World Bank and ADB. The World Bank’s Inspection Panel, established in 1993, is of particular interest because it was the first, and remains the most experienced (World Bank 1993). The ADB’s Accountability Mechanism, established in 2003 to replace its original 1995 Inspection Function policy, is of special interest

due to its innovative use of both problem-solving and investigation phases (ADB 1995 and 2003).