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The Accountability of International Financial Institutions in light of Sustainable Development Goal 16: The Role of MDB’s Independent Accountability Mechanisms in Promoting Sustainable Development

Citation: Akestoridi, Aikaterini Angeliki (2022) The Accountability of International Financial Institutions in light of Sustainable Development Goal 16: The Role of MDB’s Independent Accountability Mechanisms in Promoting Sustainable Development. Doctoral thesis, School of Advanced Study.

Akestoridi Thesis Post-Viva final.pdf

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The thesis sets out to demonstrate the reasons why Multilateral Development Banks can be held accountable for sustainable development and to define the scope of their accountability. It does so by studying the role of the World Bank Group (WBG) in the implementation of Agenda 2030 for sustainable development and the Sustainable Development Goals, promulgated by the United Nations. First, the thesis constructs the substantive and procedural contours of sustainable development from the viewpoint of policy and qualifies its legal relevance as a guiding norm for decision-making and dispute resolution, in order to bring the WBG under its normative ambit. It draws on positivist legal theory and reflects on the policy approach to international lawmaking, in order to explain the normativity of sustainable development in international law and in the WBG’s regulatory framework for the administration of development. The thesis then contends that there is an obligation on the WBG to promote sustainable development and the SDGs that is justified on policy and legal grounds: 1) due to the WBG’s institutional role in international development in its capacity as UN specialized agency. In the context of Agenda 2030, which is political and not legally binding in nature, this pledge is manifested in the WBG’s voluntary duty of good economic governance under SDG16.6; 2) because the WBG has mainstreamed sustainable development into its internal law in two ways: (i) by advancing the teleological approach to interpretation of its Articles of Agreement to include the international community’s expectations and fundamental policies for an optimum world order, which now resonate in sustainable development and the SDGs; and (ii) through the IBRD/IFC safeguards system; the environmental and social safeguards, set authoritative standards for the WBG’s staff and borrowers with regards to social and environmental protection as prescribed by relevant international law instruments and delineate the rights and interests of project-affected people (PAP). Furthermore, their interpretation, application and enforcement by the Inspection Panel and Compliance Advisor Ombudsman promulgate them as a distinct legal body of common standards, rules and procedures for sustainable development. The WBG has thus become addressee of existing and emerging norms of the international law on sustainable development, which it advances through its own standards, exercising its power and authority in development governance. Nonetheless, the case can be made that it has taken on an affirmative legal duty to promote environmental and human rights objectives that bear directly upon sustainable development. To whom is this duty owed and what does it actually entail? Acknowledging the WBG’s internal and external stakeholders competing interests and conflicting expectations about accountability, the thesis answers the question by recourse to the people-centred character of Agenda 2030 and to the procedural aspect of sustainable development’s definition. According to the latter, the integration of socioeconomic and environmental objectives relies on participatory, transparent and reasoned decision-making process, which is subject to review through accountability procedures that uphold due process. Relative to this, the IP/CAO practice becomes the primary source for evidence to substantiate the assertion that the WBG holds the obligation to employ in its policy formulations and decision-making the integration of diverse rules and interests in the socioeconomic and environmental fields. The IBRD/IFC are therefore accountable to PAP for the impact their decision-making faults have on PAP’s wellbeing. By giving PAP access to recourse, AMs hold the WBG directly answerable to them for upholding equitable participation and transparency, which are fundamental aspects of the procedural facet of the right to development; hence of the procedural dimension of sustainable development. That said, the safeguards’ harmonization with hard and soft law on sustainable development would enhance their authoritativeness as sources of the WBG’s legal obligation for sustainable development and strengthen the credibility of the AMs. With States and MDBs prescribing to the same rules and principles, development interventions would indeed be predicated on a coherent law on sustainable development. For this to happen, such improvement is contingent upon the WBG’s will to be subject to more stringent regulatory and accountability frameworks.

Creators: Akestoridi, Aikaterini Angeliki and
Subjects: Law
Keywords: Sustainable Development, SDGs, International Financial Institutions, Multilateral Development Banks, Environmental Social Framework, accountability, development governance, development theory, international development law
Divisions: Institute of Advanced Legal Studies
Collections: Dissertation
  • 20 October 2021 (submitted)
  • 18 July 2022 (accepted)


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