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CIAO DATE: 05/02
Georgetown Journal of International Affairs
Volume 1, Number 2, Summer/Fall 2000
The Rise of Development Law
Review by Andrés Rigo
*
Rumu Sarkar. Development Law and International Finance. Hague: Kluwer Law International, 1999, 254 pp. $30.00.
For the first time in the history, there has been a leveling of the playing field to the point where any commodity, service, or product may be obtained from anywhere by anyone. As a result, developing nations can now assume a proactive role in determining their own path of development. In Development Law and International Finance, Rumu Sarkar suggests how this process of development should proceed in light of the collapse of the Soviet Union, growing interdependence, and recurrent financial crises.
In the globalized economy, the realms of ethics, morality, justice, and religion fall behind as Western economic, political, and legal ideals become more dominant. According to Sarkar, “the struggle between the developed and the developing worlds is not only one of economic accumulation but is also a struggle of ideas around which societies are organized.” She posits that this struggle can be resolved through the application of development law.
Sarkar proposes a fresh approach to development that is more responsive to global needs, especially in the maturation, coordination, and integration of legal systems. This approach consists of a rapprochement between the opposing principles of Western universalism and non–Western cultural relativism. Legal reform programs, she argues, should not be imposed on a country as if that country has no legal tradition. Indeed, it is necessary to assess how legal reform measures will affect other areas of the law and then look at the purpose of enacting the legal reforms. Western legal norms may not be “good, viable, or even inevitable choices for all other non–Western societies.” At the same time, Sarkar notes, preserving “indigenous norms” may have adverse consequences for developing nations that are too costly to bear.
The book argues that individuals have the right to become stakeholders in the development process. For this reason, states must permit the general public to have access to, and equitable participation in, the development process through hearings, access to information, and a mechanism for addressing grievances. According to Sarkar, all actors in the development process, including donor nations, international lending institutions, and developing countries themselves, must adhere to the principles of mutuality and equitable participation. Development law is thus seen as an equalizing force among the various actors.
Sarkar identifies a lack of any “mechanism for addressing capital transfer issues” arising from World Bank and International Monetary Fund (IMF) lending. She proposes the establishment of an independent body, the Capital Transfer Appellate Board (CTAB), to adjudicate disputes between the two organizations and their members. By allowing member states to appeal decisions of the executive boards of these institutions, the CTAB would ensure the accessibility, transparency, and accountability of World Bank and IMF lending practices. As is the case with the World Trade Organization (WTO), private claimants could lobby their respective governments to seek appellate review. The CTAB would have enforcement powers sufficient to declare null and void provisions that placed conditions on financing provided by the World Bank and the IMF. The proposed grounds for appeal are: failure by the World Bank and IMF to follow their own policies, conditionality contrary to the member’s laws and international agreements, and change of circumstances.
The book also addresses a host of issues related to structural legal reform, including international borrowing, the tension between privatization and nationalization, and emerging capital markets. Sarkar concludes with a discussion of whether there is a human right to development. She remains critical and unconvinced of the existence of such a right. In addition, she argues that the proponents of this idea have failed to clarify the right’s content and enforcement, which have only added to the general confusion surrounding it. Nevertheless, Sarkar believes that this idea represents an important step in the continuing evolution of development law.
The primary flaw of Development Law and International Finance is what has been omitted. Even though this subject is in a state of flux, a full discussion of the concept of development and its evolution during the last fifty years would be appropriate. Environmental law is surprisingly left out of the discussion. Non–governmental organizations (NGOs) receive scant attention as active parties in development law, despite their substantial contributions to and important role in the development process. The chapter on privatization contains an extensive discussion of the privatization experience in several countries, but this is lacking in the chapter on rule–of–law programs. A fuller discussion of the constitutional principles of development law would be warranted, particularly because those proposed are not exclusive to this legal discipline. Finally, the duty to cooperate among states goes beyond development law, as do the principles of transparency, openness, and accountability.
Sarkar also fails to note that structural changes taking place in developing countries have not necessarily been imposed by the West. Furthermore, these changes are taking place in developed nations and are not limited to privatization and the creation of capital markets.
The discussion on globalization and the dangers of a “unicultural” world fails to recognize that a large number of cultures and countries have had similar legal systems for generations. Furthermore, the transmission of laws from one country to another has taken place throughout history in a more significant way than recognized by the author, and this transmission has not always been the result of conquest.
The proposed mechanism to appeal decisions of the executive boards of the Bretton Woods institutions is certainly daring and innovative, but it is reasonable to doubt its practicality. Even assuming that the World Bank and the IMF would agree to the establishment of the CTAB, the grounds for appeal are rather limited, and they do not seem to respond to the concerns expressed about these institutions in the book. While failures of the World Bank to apply its policies prompted the establishment of the inspection panel, the boards of these institutions are not known for violating the policies that they themselves establish and may change. The purpose of the CTAB, according to Sarkar, would be “to provide a concrete institutional framework in which to discuss capital transfer practices and policies, reach an international consensus thereon, and create a problem–driven body of substantive law flowing therefrom.” This is currently the role of the World Bank and IMF boards, and it should not be that of an adjudicatory body consisting of only five board members.
Overall, however, the book provides a balanced discussion of development law issues and their philosophical and political contexts. The proposed approach to development, the substantive principles of development law, and the CTAB are all thought–provoking and interesting contributions to the field of development.
Endnotes
Note *: Andrés Rigo is former Deputy General Counsel of the World Bank. Back.