A/HRC/38/33
consolidation should not become ends in themselves. By proclaiming its mission to be
pro-poor, the World Bank does not thereby discard economic logic or abandon
markets. IMF personnel often use the term “equity”, but it has no defined meaning
and rarely serves to focus policies on the situation of those living in poverty. They also
speak often of “the vulnerable”, but this too is an amorphous and open-ended concept
that is rarely given fixed policy content.
67.
Proactive steps are essential. IMF staff often complained to the Special
Rapporteur that social protection only becomes a “hot” issue in times of fiscal crisis,
by which time it has become unaffordable. But IMF itself makes all too little effort to
raise the issue in the (relatively) good times. A gradual and proactive approach to
embedding social protection is required, both by IMF and Governments. The best
starting point would be to engage seriously and systematically with the Social
Protection Floor Initiative of the United Nations, ILO and WHO.
Costs of replacing politics with technocracy
68.
The political economy of promoting social protection, and inequality reduction,
cannot be ignored since neither inequality nor social protection is likely to be taken
seriously in authoritarian contexts. This raises the issue of democratic governance,
which IMF would like to assume is far beyond its remit. And indeed, in the broadest
sense, it is. IMF does not exist to promote democracy, but nor does it have a mandate
to undermine democratic decision-making. Yet many of its preferred policies promote
institutional and budgetary constraints on the workings of democracies. For example,
entrenching deficit caps, debt limits and expenditure ceilings all reduce the scope for
voters to influence a wide array of fundamental economic and social priorities. At that
point, voters are readily tempted by populist political parties with nationalistic,
xenophobic and other problematic platforms. Those are issues over which they still
have control and which can be used to persuade voters that their preferences still
count. A recent IMF paper promoting the virtues of “independent fiscal councils”
begins by asserting that “even the best designed democratic systems require
institutional constraints on policy discretion to complement democratic controls and
prevent undesirable policy outcomes”.137 But the reality will often be that democratic
controls are replaced by technocratic fiat. IMF needs to acknowledge the potential
negative consequences of such approaches and seek to factor some sort of balancing
mechanisms into its recommendations. It is not enough to pretend that policymakers
retain a free hand and that the democratic system can always repudiate unpopular
policies, when in fact the underlying structures are being reshaped precisely to make
this extremely difficult.
Genuine engagement with the outside world
69.
IMF frequently pays lip service to the important roles played by “development
partners”, “external stakeholders”, “the World Bank and other institutions”, and
“country authorities” but, as one interlocutor put it, most observers think it acts as
though it is a law unto itself. One IMF country representative, when questioned about
interactions with civil society, explained how she made a great effort to persuade them
to advocate for IMF priorities, but that seemed to be the limits of any collaboration.
IMF should introduce more systematic consultations with a broad range of civil
society groups in the context of in-country Article IV reviews, and it should be
genuinely open to learning and adjusting its approach. The worldview that emerges
from dealing only with the finance ministries of the world is hardly a balanced or
adequate one on its own.
70.
If IMF is to take social protection seriously, it will need the expertise to do so. It
should certainly collaborate in a much more concerted and meaningful way with ILO
and UNICEF, among others, but it is unrealistic to assume that it will be able, or
137
R. Beetsma et al, “Independent Fiscal Councils: Recent Trends and Performance”, IMF Working
Paper (March 2018), p. 3.
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