A/HRC/28/59 23. Firstly, even if it is proven that loans are employed for a beneficial use, such spending could also release other funds that can then be spent for harmful purposes. If lending is used to build roads, construct homes or other public infrastructure, there is little doubt that external financing was not directly allocated for repressive use. However, such projects may also be critical to quelling discontent or buying loyalty. Even funds allocated directly to social programmes or projects aimed at realizing economic, social and cultural rights can reduce social and political protest and resistance, thus prolonging the survival of the regime. Furthermore, government revenue that would otherwise have been spent on social or economic development can be distributed to strengthen clientelistic relations and fortify the national security system. 24. External funds may temporarily provide more fiscal space for regimes so that they can rely more on buying loyalties and depend less on repression. In fact, when Governments take into consideration the preferences of outside (non-supportive) groups that have their own financial and budgetary priorities, they will probably garner some social and political support, while at the same time contributing to their primary goal which, in the case of authoritarian regimes, may imply surviving in power and carrying out their political and economic plans.18 25. Secondly, while the domestic population may perceive that there has been a shortterm improvement in well-being, as a result of additional public spending, that is directly at odds with the positive conditions that normally surround the enjoyment of human rights. Multilateral loans might not really benefit the enjoyment of human, social and economic rights, but may have a propagandistic purpose in making a regime look more benign externally than it actually is. The docile nature of the population can potentially be misinterpreted as acceptance of, or support for, a regime, confusing public compliance with expediency. In his report of 1977, the Special Rapporteur of the United Nations SubCommission on Prevention of Discrimination and Protection of Minorities demonstrated that sentiment in the case of the Pinochet regime. Authoritarian regimes have sometimes been able to withstand international pressure from other countries, or the United Nations, to improve their human rights record, because multilateral banks not only provide direct financial assistance to repressive Governments but also facilitate access to more sizeable amounts of private capital. 26. Finally, Governments with access to foreign income usually rely much less on the taxes levied from their citizens to obtain revenues.19 That gives political elites little or no incentive to grant democratic representation, or the right to effective political participation, to citizens in exchange for their economic compliance as taxpayers. Economic elites and other relevant groups may be rewarded without the need for political bargaining, voter control or democratic decision-making on the use of funds. As has been explained, “in developing countries, tax bases are typically narrow and the state’s ability to extract taxes is notoriously limited. Therefore, governments utilize their ability to sell loans internationally to generate revenue needed to fund domestic spending projects.”20 However, under authoritarian Governments, those public spending projects have clear and specific political 18 19 20 See Sabine Michalowski and Juan Pablo Bohoslavsky, “Ius cogens, transitional justice and other trends of the debate on odious debts: a response to the World Bank discussion paper on odious debts”, Columbia Journal of Transnational Law, vol. 48, No. 1 (2010). On oil revenues, see Kevin Morrison, “Oil, nontax revenue, and the redistributional foundations of regime stability”, International Organization, vol. 63, No. 1 (January 2009). See also Michael L. Ross, “Does taxation lead to representation?” British Journal of Political Science, vol. 34, No. 2 (April 2004). Irfan Nooruddin, “The political economy of national debt burdens, 1970-2000”, International Interactions, vol. 34, No. 2 (June 2008). 9