'Development' Versus 'Sustainable Development'?

Author:Lorenzo, Johanna Aleria P.

TABLE OF CONTENTS I. INTRODUCTION 401 II. THE WORLD BANK: FROM INTERNATIONAL FINANCIAL INSTITUTION TO DEVELOPMENT BANK TO SUSTAINABLE 406 DEVELOPMENT AGENCY A. Early Shift 406 From Reconstruction To Development B. "Sustainable Development" 411 in World Bank Documents III. THE CONCEPT OF 416 SUSTAINABLE DEVELOPMENT: A CONTEMPORANEOUS EVOLUTION A. UN Initiatives and 420 International Instruments: From Stockholm to B. International Jurisprudence 424 IV. IN DEFENSE OF 427 WORLD BANK MISSION RECONSTRUCTION A. Mission Reconstruction, 427 Not Mission Creep B. Teleological, Evolutionary, 431 and Contextual Approaches to Constituent Treaty Interpretation C. Authority to Evolve 437 and Expand 1. Economic-Political "Dichotomy" 437 2. Purposes 440 D. Discretion to Evolve 448 and Expand 1. Environment 448 2. Governance 453 3. Human Rights 456 V. MANAGING DISCRETION AND 462 ACCOUNTING FOR INTERNATIONAL COMMUNITY EXPECTATIONS: A PROPOSED INTERPRETIVE FRAMEWORK VI. CONCLUSION: RECONSTRUCTING 472 THE WORLD BANK AS A SUSTAINABLE DEVELOPMENT AGENCY "Sustainable development is about - if it is about anything - ensuring that legitimate human needs are met without sacrificing environmental resources in the process. If one is to believe that States have 'adopted' sustainable development as the way forward, this needs to be reflected in what goes on within international organisations of which they are a part. International organisations must be active, not passive, players in global developments reflecting the interests of their members. "A word is not a crystal, transparent and unchanged, it is the skin of a living thought and may vary greatly in color and content according to the circumstances and the time in which it is used. I. INTRODUCTION

"Keynes would be rolling over in his grave were he to see what has happened to his child." (3) Referring to the detrimental effects resulting from the structural adjustment programs that the International Monetary Fund (IMF; the Fund), together with the International Bank for Reconstruction and Development (IBRD; the Bank; the World Bank), (4) supported in the eighties and nineties, former World Bank Chief Economist Joseph Stiglitz made this remark to criticize the so-called mission creep in the Fund, which has come to champion "market supremacy with ideological fervor" in spite of its being supposedly "[f]ounded on the belief that markets often worked badly." (5)

In a slightly similar vein, this Article begins with the observation that the World Bank of today, whose avowed mission is to "end extreme poverty within a generation and boost shared prosperity," (6) would be somewhat unrecognizable to participants at the Bretton Woods Conference as the same institution they created in 1944.

In contrast to Stiglitz, however, this Article contends that the mission reconstruction (1) in the Bank--meaning, the expansion and modification of its operational scope and organizational structure--is legally sound and normatively desirable, and should be maintained, if not enhanced and accelerated, to transform the World Bank into a sustainable development agency. In this regard, the policy proliferation associated with the Bank's assumption of new activities, particularly those that are non-economic in character, is sometimes referred to as "mission creep." (8) Contrary to the negative connotations underlying such a term, this Article views this set of changes to be mostly a benign fact. Thus, beyond expressing a policy preference as to the Bank's reform, this Article also presents a legal justification for the proposed transformation based on the World Bank's constitutive treaty, the Articles of Agreement.

This Article's title alludes to a potential contrast between the World Bank's traditionally one-dimensional (economic) understanding of development qua economic growth and the multidimensional and integrative thrust of the concept of sustainable development, which is broadly acknowledged in several international instruments to encompass three aspects, namely, economic, social, and environmental. (9) This Article posits that the Bank's evolving definition of "development" has been moving closer, albeit at a gradual pace, to the meaning of "sustainable development" as understood and supported by the international community.

To corroborate this claim, this Article presents a narrative and legal analysis of how an international financial institution (IFI) or international economic organization (IEO) such as the World Bank has been transforming into a nascent sustainable development agency. Such transformation occurs through the interpretation of this organization's Articles of Agreement--considered under international law as both a treaty and a constitution--using the general rule and methods under the Vienna Convention on the Law of Treaties (1969) (VCLT; Vienna Convention), albeit with some additions or modifications. To complement the suggested interpretation of the IBRD Articles, the analysis includes legal opinions and memoranda by the Bank's General Counsel, (10) as well as related scholarly works, that address the increasing involvement of the IBRD and the International Development Association (IDA) (11) in development projects and programs concerning the environment, (good) governance, and human rights.

The Article proceeds as follows. Part II, which follows the Introduction, briefly looks at the Bank's present policies and operations pertaining to development. Taking into account the IBRD's institutional history, this Part contextualizes the mission creep argument in its various forms. Its history suggests that the World Bank has in fact struggled and failed, but eventually succeeded, to reconstruct its mandate and adapt to the constantly changing needs and demands of peoples within its different member states, particularly those belonging to the developing world, which have become the major clients of the Bank.

Part III traces the contemporaneous evolution of the concept (12) of sustainable development within different international fora. It focuses on the concept's tridimensional character and the concomitant thrust to integrate the economic, social, and environmental aspects of development. As illustrated in the references to sustainability in various World Bank documents, the discussion also alludes to the points of intersection between the Bank's evolving definition of "development" and the international community's emerging understanding of "sustainable development." In most instances, it appears that the Bank is more wary or mindful of the interaction between the economic and environmental pillars, thereby seemingly overlooking the social pillar. This observation might be attributed to the greater number of cases wherein people affected by the Bank's development projects raise environment-related concerns, or frame the harms they incurred from development projects in environmental terms. (13)

Moreover, Part III seeks to establish the crucial claim that the concept of sustainable development, including the principle of integration, has been incorporated into the shared expectations of the international community, such that even given the current lack of concrete international legal rules to govern the sustainable development agenda, there exists some basic consensus among participants in the international lawmaking process regarding the concept, including its goals, implications, and some underlying principles. This assertion is essential to the interpretive framework proposed in Part V, insofar as the expectations and demands of the international community need to be analyzed vis-a-vis the intent of the States parties to the Bank's constitutive treaty.

Based on an interpretation of the Articles of Agreement, Part IV puts forward a legal defense for the mission reconstruction in the Bank. It submits that the Bank's current sustainability-oriented policies and operational activities are consistent with its developmental mandate and purposes. Likewise, these policies and activities do not constitute violations of the constitutional provisions prohibiting interference in its member states' political affairs and enjoining decisions to be made solely on the basis of economic considerations. However, although the ascertained intention of the founding members supports an evolutionary interpretation of the Articles, it is unclear how or in what manner they intended the definitions of the generic terms in the treaty--e.g., "development," "political," or "economic"--to evolve over time.

Hence, the teleological-evolutionary approach needs to be guided and counterbalanced by international community expectations and demands, which, as shown in Part III, are geared towards the achievement of sustainable development. The historically unique and special standing of the Bank in the world order--derived from its financial capacity; accumulated practical experience and knowledge; and political clout--causes members and participants in the international community to continue looking to the Bank for solutions to sustainability-related problems. (14) As Gavin and Rodrik aptly state,

"Where the Bank's strength lies is in its tremendous powers to spread and popularize ideas that it latches on to. Once the Bank gets hold of an idea, its financial clout ensures that the idea will gain wide currency." (15)

Part V elaborates the recommendation to complement the current interpretive framework with the approach in international law pioneered by Myres McDougal and his colleagues at Yale, in order for the process of reconstructing the World Bank as a sustainable development agency to be more systematic, focused, and relevant. The proposal entails two steps: first, ascertaining both the shared expectations of the treaty parties and the contemporary expectations and demands of the international community; and second, analyzing and harmonizing the two. In the event of an irreconcilable conflict, the latter...

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