Justice final essay

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  The (in)justice of conditionality GC: Justice Christof Ephraïm 23/3/2011 Table of contents Introduction………………………....1   Justice and Conditionalities…………3   Why Conditionalities? ……………...5   The problem with Conditionalities…7   Improvements: a way out………….10   Conclusion……………………… 11   Works Cited ……………………... 11    Christof Ephraïm Final Essay GC: Justice 22/03/2011 2 Introduction    ―[ T]he global scope of justice will expand only through developments that first increase the injustice of the world by introducing effective but illegitimate institutions to which the standards of justice apply, standards by which we may hope they will eventually be transformed‖ (Nagel 147). Arguably, Nagel‘s quote applies to the existing International Financial institutions (IFIs), especially the World Bank and the IMF. Although these two were initially created to deal with a narrow, clearly stipulated range of technical issues, they have gone far beyond their srcinal mandates. In the 1980s, when the Washington Consensus developed, the IMF‘s and the World Bank‘s policies changed dramatically. They became ―the new missionary institutions‖ through which the Washington Consensus was ―pushed upon  the reluctant poor countries that often badly needed their loans and grants ‖ (Stiglitz   Globalization and its Discontents , 13). But still ― for some of the poorest countries of the world, dependent as they are on aid from [the IMF,] the World Bank, or [other] donors […], conditions imposed in order to receive that aid  –   tough less onerous than in the past  –   may still be precluding them from following economic policies of their own choosing, including  policies of the kind that proved so successful in East Asi a.‖ (Stiglitz    Making Globalization Work  , 57). Considering the previous and referring back to Nagel, this paper attempts to address a specific injustice by the World Bank and the IMF, namely conditionality. Conditionalities are ―the notion that the imposit ion of rules and regulations set by donors to govern the conditions under which aid is disbursed can ultimately determine its success or failure‖ (Moyo 38) and numerous studies have shown that tying development aid is not effective (Dreher and Vaubel 2004, Moyo 2010, Santiso 2001, Stiglitz 2002, Stone 2006). Between the authors on whom this paper draws is disagreement about the extent of the failure of conditionalities. Whereas  Christof Ephraïm Final Essay GC: Justice 22/03/2011 3 Stiglitz in Globalization and its Discontents  considers the economic conditionalities of the IMF and argues that they can worsen crisis, Santiso argues in Good Governance and Aid  Effectiveness:The World Bank and Conditionality   that ‗good governance‘ policies are imperative but when tied to aid not appropriate. Lastly, Stone argues in  Empirical and  Normative Evaluation of the IMF   that lending is skewed by the foreign policy interests of leading donor countries which leads to the failure of conditionalities. Since conditionalities are judged by their effectiveness this paper is mainly concerned with substantive justice, but touches upon justice as the first virtue of social institutions, distributive justice and  procedural justice as well. A note has to be made here because conditionalities in this paper are tied to development aid, but the question of development aid and justice is beyond the scope of this paper, it is only concerned with the effects of the conditionalities tied to it. Drawing on the above, this paper argues that conditionality by IFIs is inappropriate to improve economic performance and good governance; instead, they need cede transfer control to recipient countries. In the first part, this paper will elaborate on the relationship and the types of justice concerned with conditionality. In the second part, this paper gives a  background of and the reasons for imposing conditionalities. The third part explicates the  problems of both economic and ‗good governance‘ conditionalities and finally, in the last  part, this paper seeks to provide options other than conditionalities because, after all, this  paper aims at improving experienced injustices. Justice and Conditionalities Different forms of justice relate to the concept of conditionality in development aid which are justice as a virtue of social institutions, distributive justice, procedural justice and substantive justice. Each of these will be mentioned separately even though they are  Christof Ephraïm Final Essay GC: Justice 22/03/2011 4 intertwined. In addition, a difference should be made between the forms of justice related to how conditionalities are put in place and their effectiveness. The first of these is rather concerned with justice as a process whereas the latter refers to substantive justice. In Rawl‘s view on justice, which is specifically a political one, rather than being derived from a comprehensiv e moral system, the first virtue of social institutions such as the IFI‘s  is to bring about justice (Nagel 120) since they have the legitimacy and power to coerce justice if necessary beyond the possibilities individuals have. This applies normally to domestic institutions, but arguably too for IFIs that use public money to provide loans to governments in need and it is their duty to make sure this public (tax) money is well spent which would  provide a reason for tying aid. However, this twist has nothing to do with providing justice to the borrowers but to its lenders; a policy for which IFIs have been criticized. Too, IFIs were not created for such purposes although they often claim they are (Nagel 134). On the other hand, international governance is often justified with principles of distributive justice which are ― normative principles designed to guide the allocation of the  benefits and burdens of economic activity ‖ (Favor and Lamont 2007). After all, the advantage of international governance is that it theoretically the provision of certain public goods in more impartial ways than national policy allows (Stone 2). Although it is debatable whether this justification is valid for development aid itself (Santiso 2001, Stiglitz 2002, Stone 2006), it could provide a strong case for justifying conditionalities if they are designed to prevent abuse by recipient governments. A third type of justice related to conditionality is procedural justice which mainly refers to the idea of fairness in the processes that resolve disputes and allocate resources. The  previously mentioned problem of impartiality of IFIs is also linked to procedural justice. In relation to conditionality, this would refer to the manner in which conditionalities are pushed  by the IMF and World Bank and to the alleged discrepancies in its application (Dreher and  Christof Ephraïm Final Essay GC: Justice 22/03/2011 5 Vaubel 2004, Santis o 2001, Stiglitz 2002). ― Most modern conceptions of justice impose some limits on the powers of sovereignty [...] and some condition of fairness or equality in the way the institutions of a just society treat its citizens, not only politically but economically and socially‖ (Nagel  118). The same applies to IFIs, however, they do not have to account to a higher institution beside its donors, mainly the most powerful ones who can exercise control over its lending policies (Stiglitz 2002, Santiso 2001), but Lesser Economically Developed Countries (LEDCs), especially when in crisis, do not have the economic and political power to withstand IFIs‘ conditionalities (Stiglitz   Globalization and its Discontents , 45). This discrepancy in application and the corresponding intrusion on governme nts‘ sovereignty  (Stiglitz Globalization and its Discontents , 9) are among the issues this paper will address. Lastly, Substantive justice or ‗true‘ justice refers to the end result or how justice is done in the end and what its verdicts are. For the purpose of this essay, substantive justice in relation to conditionality refers to its effectiveness, since that is where conditionalities are  judged upon. As the next parts of this paper will explicate, conditionalities are ineffective from an empirical standpoint. Although normative conceptions of justice are important to determine which approach to take, this paper is more concerned with an a posteriori empirical approach in judging conditionalities, namely their effectiveness and to take a pragmatic point of view, to do away with them if they don‘t work. Practical improvements have a stronger effect on peoples‘ lives than normative arguments; however, they can guide them. Why conditionalities? ―The notion of a quid pro quo around aid was not new. Marshall Plan recipients had been required to adhere to a strict set of conditions imposed upon them by the US‖ (Moyo 38). The
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