GovernanceAn lrtemational Joumal of Policy, Administration, and Insdtutions

Volume 15 Number 1 January 2003

CONTENTS

ArticlesSpecial Issue: Deliberately Democratizing Multilateral Organization

Marco Venneij and Timothy E. losling, editors

Deliberation, Legitimacy, and Multilateral DemocracyLoren A. King

Deliberative Democracy and Lrtemational Labor StandardsArchon Fung

Enhancing WTO Legitimacy: Constitutionalization or GlobalSubsidiarity?Robert Howse and Kalypso Nicolaidis

Why Do Institutions Matter? An Audience-Cost Theory ofInstitutional CommitmentSusanne Lohmann

Dernocratizing the Intemational Monetary Fund and the WorldBank: Govemance and AccountabiliWloseph E. Stiglitz

Book ReviewsValerie Sterling, ed., Building the Russian State: lnstitutional Crisisand the Quest for Democratic Gooernance, and Victoria E. Bonnelland George W. Breslauer, eds., Russia in the New Century: Stabilityor Disorder? (Michael Bressler); Stephen McBride, ParadigmShift: Globalization and the Canadian Stafe (Herman Bakvis);Pippa Norris, Digital Dfuide: Ciaic Engagement, lnformationPoaerty, and the lnternet Worldwide (Terrence Casey); LaurenceE. Lynn, |r., Carolyn J. Heinrich, and Carolyn I. Hill, ImprouingGoaernance: A Neut Logic for Empirical Research (MichaelMuetzelfeldt); Mauro F. Guillen, Limits of Conoergence:Globalization and Organizational Chnnge in Argentina, SouthKorea, and Spain (Herman M. Schwartz)

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Special Issue: Deliberately DemocratizingMultilateral Organization

MARCO VERWEIJ* AND TIMOTHY E. JOSLING,** EDITORS

fn Economy and Society, Max Weber posits that bureaucracies that arenot reined in by either democratic controls or market discipline will eaen-tually start to pursue public policies that are detimental to those whoselioes these policies should enable or improoe. During the last ten years, anumber of scholars, actiaists, parliamentarians, journnlists and uthistle-blowers haue come to argue that Weber's hypothesis has often held up forthe functioning of multilateral organizations, such as the World Bank, thelnternational Monetary Fund, and the World Trade Organization. At Imst,it appears that little democratic control or mnrket discipline hns beenimposed on multilateral organimtions. MoreorJer, critics t'rom both the leftand the ight haae seaerely citicized such multilateral policies as dnelop-ment lending, deregulation of financial markets, and structural adjustmentprograms. Yet it remains difficult to agree upon npproprinte remedies.Many proposals-ranging from outright abolishment of large internationalorganizations to the establishment of global parliaments at the UnitedNations-haae been tabled, but little consensus reigns and oarious disad-vantages (as well as adoantages) cling to each of these proposals. Thisspecial issue of Governance considers yet another way in which to makemultilateral organizations more danocratic and pluralistic: by makingthese organizntions more delibratiaely democratic. This introduction clar-ifies whnt is meant by deliberatiae decision-making and why it is worth-while to consider making multilateral organizations more deliberatioe. ltalso sets out the other contributions to the issue, which offer different jus-tifications for increased deliberation and discuss alternatiae forms in whichmultilateral organizations can be made more deliberatbely democratic.

Not the violent conflict between parts of the truth, but the quiet suppression ofhalf of it, is the formidable evil: there is always hope when people are forcedto Iisten to both sides; it is when they attend only to one that errors harden intoprejudices, and truth itself cease to have the effect of truth by being exagger-ated into falsehood.

[ohn Stuart Mill, On Libeftv (f15)

*Max Planck Project Group on Common Goods**Stanford University

Goaenance: An lntenatiotal lournal $ Policy, Administration, and lnstitutions, Vol. 16, No. 1,fanuary 2003 (pp. 1-21). @ 2003 Blackwell Publishing 350 Main St., Malden, MA 02148, USA,and 108 Cowley Roa4 Oxford, OX4 Ue UK. ISSN W52-7895

MARCO VERWEIJ AND TIMOTHY E. JOSLING

LACKING DEMOCRACY DEPRTVED OF DIVERSITY

In another classic of social theory Wirtschaft und Gesellschaft,Max Weberdescribes what will eventually happen to bureaucracies that are notsubject to democratic controls or market forces (Weber, 81H68). Free ofthese constraints, bureaucratic organizations will increasingly lock them-selves into a single, technocratic way of perceiving and addressing socialissues, regardless of the costs and consequences that this course of actionmight have according to other points of view. Moreover, each official willsolely be absorbed with executing his or her specialized tasks as efficientlyas possible, without worrying too much about the overall impact that thebureaucracy is having on society. Thus, even bureaucracies that arestaffed with highly trained, deeply motivated, and well-intentioned civilservants can create a lot of havoc by single-mindedly pursuing a narrowset of aims without considering the validity of other social goals or lesstechnocratic means. Weber asserted that national governments wereposed to become increasingly bureaucratic, and he wondered what, ifanything, could be done to stop this process.

For a number of countries, Weber's predictions have proven too pes-sirnistic. In these countries, bureaucratic rule has been reined in by pop-ularly elected parliaments, independent courts, media and universities,freedom of speech and association as well as other vital human rights,vibrant markets, ombudspersons, and the participation of civil societyand enterprises in the making of public policy. Larry Diamond (7-31) callsthese countries the "liberal democracies" (as opposed to merely electoral,pseudo- and nondemocracies) and estimates that in'1,997 they made up42Vo of all countries.

An increasing number of activists and scholars have come to realizethat Weber's pessimistic view is also relevant for international relations.Many large international organizations have, for a long time, beenable to remain aloof from the maelstrom of dissenting opinions, contra-dictory perspectives and competing interests that make up truly democ-ratic policy debates (see, e.g., Adams; Kaldor; Pauly; Rich; Scholte;Woods). Popularly elected parliaments and governments appear to havepaid less attention to the policies pursued by multilateral organizationsthan to those of domestic departments. Nongovernmental organizations(NGOs)-in particular, those representing civil society rather than busi-ness communities-appear to have had fewer opportunities to engage indialogue with multilateral organizations than with national agencies.Prior to the demonstrations against the World Tiade Organization (WTO)in Seattle in November 1999, newspapers and other media might not havecovered the intricate politics and policies of the multilateral organizationsin any great depth. And the loans handed out by the World Bank and theInternational Monetary Fund (IMF) have been insulated from market riskby the fact that the governments of the borrowing countries have alwaysunderwritten them.

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It is important, however, not to overstate the freedom that multilateralorganizations have had (Reinicke; Stiles). From the mid-1980s onwards,various international organizations (the United Nations Children's Fund,the International Labor Organization [ILOI, the Inter-American Founda-tion, and so on) have rapidly expanded their collaboration with commu-nity-based organizations and international NGOs. In part, these changeshave come at the insistence of the Scandinavian and German govern-ments and parliaments. During the 1990s, the World Bank (with its "Com-prehensive Development Framework") and the United NationsDevelopment Program followed suit. Furthermore, the U.S. Congress hasoffered an attractive platform for the critics of the World Bank and theIMF. By 7987,U.5. House and Senate committees had already held twentyhearings on multilateral development activity. Environmental and indige-nous organizations have testified extensively at U.S. Congress hearings.This close watch on the IMF and the World Bank culminated in theharshly critical report of the Meltzer Commission to the U.S. Congress,published in March 2000. The majority opinion in this report blames theIMF, the World Bank, and regional development banks for lending to thewrong countries, for the wrong projects, and with little success. Themajority opinion calls for a diminution of the activities of the multilateralfinancial organizations, leaving more allocation decisions to the unfet-tered competition of international financial markets. It is precisely thesimultaneous effiergence from 7999 onwards of the right-wing, promarketcritique of the IME, the World Bank, and regional development banksoffered by the Meltzer Commission and the left-wing, antimarket demon-strations and riots (in Seattle, Washington, DC, Prague, Davos, Montr6al,Genoa, and so on) that has made it imperative for these organizations toredefine themselves and scurry for new allies.

Nevertheless, for various reasons, the view persists that many multi-lateral organizations are not sufficiently democratic or pluralistic. It is truethat a host of United Nations (UN) agencies have been collaboratingclosely with local and international citizens' groups for at least a decadenow. But working with such groups represents only one particular per-spective on what it means to become more democratic and pluralistic.From other political perspectives, it is less obvious that this is the way togo forward. For instance it could be objected that civil society groupsthemselves are not representative or accountable, or that this form of col-laboration runs the risk of bypassing democratically elected national gov-ernments. Moreove{, at least according to Richard Falk, the fact that UNagencies have worked with civil society groups has also been one causeof their increasing marginalization within the international realm. In addi-tion, the World Bank's efforts to co-opt NGOs do not seem to have bornemuch fruit as of yet. A recent report of the Bank's own OperationsEvaluation Department (xiii) concluded that no link could be establishedbetween the involvement of NGOs and community-based associations indevelopment projects on the one hand and project success on the other.

MARCO VERWETJ AND TIMOTHY E.IOSLING

This conclusion may be linked to another finding of the report (xii):namely, that Bank funds for citizens' groups have mainly been spent onproject implementation and rarely on project preparation. This suggests thatwithin the World Bank projects, NGOs are primarily seen as potentiallyefficient providers of public services, rather than as worthwhile discus-sants of development proiects. It also suggests that it is quite possible formultilateral organizations to engage in a lot of participatory rhetoricwithout actually changing policies.' To be fair to the World Bank, itsComprehensive Development Framework makes a lot of room for wide-ranging policy dialogues with international and local citizens' groupsand business communities as well as state institutions (Stiglitz 7999;Wolfensohn). It might be that, at present, World Bank officials are split onthe issue of what roles NGOs should and could play. Finally, the inter-national financial and trade organizations have, until quite recently, notchanged their insular and technocratic ways. Overall, it can therefore beconcluded that many multilateral organizations (and in particular themost influential ones) still suffer from a lack of democratic legitimacy andan absence of competing viewpoints (Keohane and Nye 2001).

Two further considerations make this assertion even more worrisome.Since the early 1980s, the IMR the World Bank, and the WTO have steadilyincreased their grip upon national societies. To the extent that multilat-eral organizations are indeed insufficiently democratic, this means thatmore public policies have been decided upon or influenced by unac-countable organizations. The "international debt crisis" that started inthe early 1980s has made many developing countries dependent on theIMF and the Bank to remain liquid. For instance,by'1,990, some 747o ofall the Third World's debt (or about U.S.$182 billion) had ended up in thehands of the Bank alone. This transfer of power has been reinforced bythe seemingly unstoppable liberalization of capital markets. As a resultof deregulation, capital flows around the world have multiplied many-fold. Due to the absence of capital controls and the huge amounts of spec-ulative capital pacing around the world, countries have become moredependent on the IMF and the Bank to bail them out in times of crisis.The fall of communism in Eastern Europe has also strengthened the handof the Bretton Woods twins. The IMF and the World Bank have beeninvited to assist the Eastern European countries in their efforts to switchto more market-based economies. These various developments havestrengthened the hold of the IMF and the World Bank over domestic soci-eties. Until quite recently, these organizations had no qualms about usingthis influence to irnpose their highly controversial structural adjustmentpolicies.

The creation of the WTO in 1995 represented a similar transfer ofpower. Its predecessot the General Agreement on Thriffs and Trade(GATT), was less restrictive than the WTO rules in at least three ways(Bronckers). GATT included more opt-out clauses, with which countriescould avoid opening up certain sectors of their economies to international

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competition. In other words, the trade rules established under the WTOcome close to an all-or-nothing package, whereas countries were freer topick and choose from among the various GATT regulations. In addition,the WTO allows for much harsher punishments of countries that are heldto be in violation of trade rules. Last, the WTO has (for all practical pur-poses) binding arbitrage powers. These were absent from the GATT. Forall these reasons, the trade regulations of the WTO are more restrictiveupon member countries than were the GATT rules. It can therefore be con-cluded that, over time, the most powerful multilateral organizations (IME,World Bank and WTO) have increased their hold over domestic societies.This is a worrying trend, given the lack of democratic controls and plu-rality of perspectives that is still haunting these organizations.

Furthermore, the policies promoted by various multilateral organrza-tions during the last two decades may have undermined "democracy athome" in anotheq, more indirect way. At least, this is the thesis of manyscholars who perceive the world to be increasingly interdependent orglobalized (Held; Held and McGrew; Holden). Their argument runs thus:Due to a host of domestic and multilateral policies, as well as varioustechnological innovations, international flows of goods, services, andcapital have greatly increased since the 1970s and have now reached auniquely high level in world history. These processes have limited theability of democratically elected governments to choose the public poli-cies that they deem fair and effective. In a globalized world (or so thisline of argument goes), companies cannot be made subject to many reg-ulations or made to pay high taxes, or else they will eventually relocate.Governments can also not fiddle around too much with interest andexchange rates, for fear of disrupting capital flows and internationaltrade. Thus, the ability of governments to pursue their preferred socialand monetary policies are severely constrained by the rapidly risingtransnational flows of goods, services and capital. During the last fewdecades, the IME, the WTO, the Organization for Economic Cooperationand Development (OECD), and the World Bank have contributed to thishollowing out of democratic choice by fervently promoting domestic andinternational policies that eliminate any barriers to transnational flows.

Wolfgang Streeck has usefully pointed out that the processes of glob-alization (or increasing interdependence) have not been antidemocraticper se; rather, they have promoted one form of democracy (the liberalview) at the expense of another form of democracy (the social per-spective). This is the case as ever-expanding government sounds thedeath-knell for democracy according to the liberal perspective, whereasan active and sizeable state receives a ringing endorsement from thesocial-democratic view. In any case, this privileging of only one particu-lar form of democracy should in itself be considered undemocratic, if oneat least agrees with Steven Ney and Michael Thompson. They argue thatthe true essence of democracy lies in a never-ending-and equal--contestbetween alternative forms of democracy.

MARCO VERWEIJ AND TIMOTHY E. JOSLING

It needs to be noted as well that the globalization thesis is not withoutits critics. Some (e.g., Hirst) have disputed the evidence that transnationalflows have indeed reached unique levels, while others (e.g., Bowles) haveargued that even with today's high degree of international interdepen-dence, states still have various options to pursue redistributive policies.Yet, the necessity to democratize and pluralize multilateral decision-making gains even more urgency if there is at least some truth to the ideathat globalization has eroded domestic democracy.

The above assumes that a strong moral or "input" argumenf can bemade in favor of democratic decision-making (Dahl): it is morally rightthat multilateral and domestic policies are decided upon in a democraticway (see also King this issue). But Weber's point goes further. He arguesthat without democratic control (and market discipline), bureaucraticdecision-making will derail and stop serving any interests that the publicmight have. This perspective points the way towards building an"output" argument in favor of democratizing and pluralizing multilateraldecision-making. If Weber's analysis is valid, then the lack of democracyamong multilateral organizations must go hand in hand with failing inter-national policies.

By now a substantial literature has been accumulated that does indeeddetail the often-disastrous consequences to which policies of multilateralorganizations have led. For instance, the IMF has been blamed for causingthe outbreak of the East Asian financial crisis by forcing (in tandem withthe U.S. Treasury) often reluctant governments to deregulate the financialmarkets within their countries (Adelman; Eatwell and Thylor; Haggardand Maclntyre; Krugman; Rodrik 1998). Jagdish Bhagwati (1998), surelyone of the world's staunchest and most influential supporters of free inter-national trade, has shown that even standard neoclassical economictheory does not iustify the complete liberalization of financial markets.The potential benefits that may be reaped from such deregulation can alsobe had otherwise-namely, through direct foreign investment and inter-national trade. Plus, there are great dangers attached to fully liberalizingfinancial markets, which have to do with the huge possibility of self-fulfilling booms and busts within these markets. These insights are inline with the literature on the history of financial markets, which showsthat unregulated financial markets are prone to costly "manias, panics,and crashes" (Kindleberger; see also Maxfield).

It is therefore not surprising that |oseph Stiglitz (2000a) has not beenable to find any statistical link between the deregulation of financialmarkets and economic growth. Despite the welter of arguments againsta rapid deregulation of financial markets, the IMF, the OECD, and the U.S.Treasury insisted upon such liberalization within the economicallysuccessful countries of East Asia throughout the 1990s (Bhagwati 7998;Stiglitz 2000b). The outbreak of a massive crisis in the otherwise appar-ently healthy economies of East Asia followed. In judging the IMF's poli-cies, Bhagwati (2001, 20) does not mince his words, calling "the Asian

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financial and economic crisis arguably the biggest human-induced eco-nomic disaster since. . ."1930.'

Policies pursued by the World Bank and the regional developmentbanks (the Asian Development Bank, the Inter-American DevelopmentBank, and the African Development Bank) have also come under fierceattack (from, among many others, Adamsi Ayittey; Easterly; Gyawali;Lancaster; Meltzer Commission; Rich). The banks have been criticised forpushing through huge infrastructure projects that: (1) were financiallyunsound (i.e., were more expensive than smaller-scale alternatives); (2)hugely increased the debt-burden of developing countries; (3) wereundertaken without the consent of the involved people; (4) facilitatedgraft and corruption within developing countries; (5) allowed despoticgovernments to use a larger portion of the tax returns for building uptheir armies; (6) sent millions of highly destitute people away from theirhomes without compensation; and (7) created many environmental andhealth threats. Again, it is important to note that these criticisms have not

iust been paraded by radical activists: they have been raised by com-mentators and academics from across the political spectrum, as well asby former bureaucrats.

Moreover, the criticisms have been confirmed by several in-houseevaluations undertaken at the behest of the World Bank (in particular,the reports of the Wapenhans Commission in 1992 and the MorseCommission in the same year). The commission headed by World BankVice-President Willi Wapenhans found that more than one-third of allBank projects completed in 1991 were failures (according to the narrowterms of the Bank itself). The annual reports of development effectivenessof the Bank's Operations Evaluation Department have also documentedthe low degree of success of Bank projects. The Meltzer Commissionreport (42), based on these annual reports, asserted that the rate of failureamong the Bank's investment programs had been as high as 597o duringthe period between 1990 and 7999.

Something approaching consensus exists concerning how ill advisedthe IMF has been to insist on a rash deregulation of the financial marketsin East Asian countries, and how badly the development proiects of theWorld Bank have fared. Certainly not everyone would qualify these poli-cies as abject failures, and it is the premise of this essay (and this specialissue) that effective and democratic governance needs such vigorousdebate and dissent. However, a great many commentators of all possiblepolitical stripes have opposed these policies (though not necessarily forthe same reasons). Many other multilateral policies are the subject of moreintense disagreement. These include the erstwhile "structural adjustmentpolicies" of the IMF and the World Bank (now rechristened the "povertyreduction and growth facilit5/') and the relentless efforts of the WTO andthe OECD to lower ever more barriers to international trade. On the prosand cons of these (and many other) multilateral policies, deep divisionsabound. But the widespread perception that multilateral organizations

MARCO VERWEIJ AND TIMOTHY E. JOSLING

are at least partly responsible for the East Asian crisis, as well as for a hostof development debacles, strongly suggests that at least a number of mul-tilateral organizations have lost "output" legitimacy.

All of this raises the questions: what on earth is to be done? In whatways can the input- and output-legitimacy of multilateral organizationsbe improved? Or should we not bother, and instead attempt to roll backtheir influence in favor of domestic governance?3

DEMOCRATIZING AND DTVERSIFYING MULTTI-ATERALORGANIZATIONS

During recent years, a plethora of new (and old) plans to "save the worldfrom lack of international democrary" have been promoted. Some (Falkand Strauss; Galtung) have argued for the construction of a global parlia-ment, in which democratically elected representatives would decide onmatters of global import, preferably under the auspices of the UN. Toenforce its decisions and intervene in crises, this global parliament shouldperhaps have command over an international army. It should also be ableto levy a global tax, thus securing its financial independence. Others (e.g.,Muchlinksi) have called for the extension of international public law. Accord-ing to these ideas, it should, for instance, become increasingly possiblefor citizens (rather than states) to sue governments for having infringedupon international public law. The foundation and/or strengthening ofvarious international courts is usually part and parcel of such schemes.Then there are those (e.9., Dryzek) who have heralded the withering awayof states and international organizations in favor of decision-makingthrough global ciail society. This view draws strength from the swift riseduring recent decades of (supposedly) nonhierarchical and transnation-ally organized citizens' movements that are concerned with promoting(what they beteve constitutes) the general interest. According to thisview, public decisions that would affect people living in different parts ofthe globe could best be taken in such citizens' fora, after careful consid-eration among all those involved. Yet another group of scholars(Archibugi, Balduinl and Donati; Held) have combined these threeplans in their blueprint for global (or cosmopolitan) democracy. Thisideal for world governance foresees the establishment of global and re-gional parliaments and the extension of public law as well as increasedparticipation of transnationally organized citizens' groups in interna-tional decision-making.

Contra all these plans to democratize international governance, quitea few have argued in favor of rolling back the scope of multilateral orga-nizntion. Reducing the influence of multilateral organizations couldstrengthen the hand of national governments and parliaments and/orincrease the discipline enforced by international markets. For example,the Meltzer Commission has called upon the IMF to limit its activities

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to lending to countries with short-term balance-of-payments problems.The commission has also urged the World Bank to stop all lendingand instead merely provide technical assistance, as well as grants, to thepoorest of countries. The director of Probe International, Patricia Adams,has gone one step further by calling for the abolishment of both theIMF and the Bank. This view has been supported rather clearly by the"50 Years Is Enough" movement, a network of over 200 U.S. and 165international citizens' groups that have protested the continuation ofthe IMF and the Bank since 1994 (see also Alternatives Committee ofthe International Forum on Globalization). And Lorri Wallach, oneof the organizers of the protests in Seattle, prefers the GATT to the WTO(Naim).

A final set of proposals would democratize and diversify internationalgovernance by strengthening the hold of national goannments on multilateralorganizations. Multilateral organizations are often perceived to operate ina political vacuum-that is, to be relatively free from scrutiny and controlby representatives from national governments and parliaments. BothNgaire Woods and Stiglitz (this issue) have advocated various measuresthrough which the activities of multilateral organizations can be broughtunder closer control of a wider variety of national leaders andparliaments.

All of these proposals are interesting and merit careful consideration.However, disadvantages cling to each of them. The call for global democ-racy may not be a highly realistic proposal, at least not in the short term.For instance, it can be doubted whether it is feasible to construct a globalpolity when nationalism is still strong (Scharpf 1998a,153-155; Weiler).Moreover, although global democrary may be ideal from certain politicalperspectives, it does not look at all desirable from other perspectives.Such an unparalled concentration of decision-making power at the globallevel would be anathema to all those who prefer government to be limitedand divided. Something similar applies to the advocary of global civilsociety. This plan, too, seems somewhat unrealistic, given that most of the191 states of this world are not likely to whither away anytime soon.Moreover, although highly democratic from an egalitarian perspective, itwould look quite suspect from other political viewpoints. The plea forrolling back transnational activity may be a council of despair. It risksforegoing the benefits that more even-handed and careful globalizationmight bring (Rodr1k1997). And any efforts to increase the monitoring ofmultilateral organizations by national governments and parliaments maybe necessary, but perhaps not sufficient. Moreover, this strategy overlooksthat many-indeed, most-states are "phoney democracies" (Economist2000a), or are not even pretending to be democratic (Diamond, 7-31).Given these disadvantages, it seems that there is still room for consider-ing yet anothet perhaps complementary, way of democratizing anddiversifying multilateral decision-making.

MARCO VERWEU AND TTMOTHY E.IOSLTNG

DELIBERAT(IV)ELY DEMOCRATIZING MULTILATERAL ORGANZATION

The contributions to this special issue consider deliberatiae decision-mnkingas a further way in which to democratize and pluralize multilateral orga-nization (cf. Bohman 1999; Schmalz-Bruns). Usually, deliberation isdefined as decision-making based on a search for consensus among allthose who will be affected by the decision (e.g., Cohen; Elster). This def-inition can be faulted on various grounds. First, it is often not clear whoexactly will be affected by a decision. Legitimate differences of opinionon this issue will typically abound, especially in deliberative settings.Second, some people who will clearly be affected by a certain decisionmay not have any particular preference or opinion regarding the issue.Their policy preferences may not be strong enough to make it worthwhilefor them to participate in the deliberative process. Finally, people whomay not be directly affected by a decision may still have an inierestingperspective on the issue at hand. It may, therefore, be better to definedeliberation as decision-making based on a search for consensus among allthose who haae a distinct opinion on the issue at hand, rather than by usingforce, voting, or bargaining.

Deliberative debate is characterizedby a diversity of policy views onwhat the problems are and how they should be solved. Proponents of acertain policy option can only hope to decide the debate in their favor byshowing how their preferred policy serves the common good better thanany alternatives. They cannot hope to win by offering arguments solelystated in terms of their own self-interest. Advocates of a certain course ofaction could, of course, try to hide their self-centered motives behind aveil of magnanimity. But it can be expected that such attempts at decep-tion will be unmasked in a vigorous debate between opposing views ofthe good life (Scharpf 7998b,9). Participants in a deliberative debate willtypically call into question the validity of the empirical and causal claimsincluded in the viewpoints of opponents, and vice versa. Thus, all pos-sible facets of a policy issue will be scrutinized within a deliberativediscourse.

This never-ending debate about the merits of alternative perspectivescomes with a number of advantages. It leads to public policies that arequite robust and well informed, as all their pros and cons will have beenexamined in detail (Thompson and Rayner; Thompson, Rayner, and Ney).Major policy surprises (such as, for instance, the outbreak of the EastAsian crisis following the deregulation of East Asian financial markets),as well as late and costly policy reversals, tend to be less frequent. In addi-tion, deliberative debate allows people to minimize moral dissensus andconflict (Gutman and Thompson,357). Through deliberation, people areable to discover on which issues they can cooperate and on which issuesthey have to agree to disagree. The continuous attempts to justify one'sposition, and convince others thereof, also encourages mutual under-standing. Furthermore, deliberative policies tend to be more generally

DELIBERATELYDEMOCRATIZNGMULTILATERALORGANZATION 11

accepted by those who will be affected by them. As a result, the imple-mentation of these policies tends to meet less resistance (Tyler).

This is not to say that deliberation is without its risks and problems(King this issue). It may sometimes take too long for decisions to betaken deliberatively. At times, it may not be possible to reach decisionsdeliberatively at all, given the existence of deep and (perhaps) intractablemoral divisions over various issues (such as abortion rights). Deliberationmay also run the risk of turning seemingly "technical" issues into divi-sive debates over ultimate values. Deliberating which scope and formdeliberative practices can best take in specific domains will, therefore,always be vital. Still, the advantages and strengths of deliberation havewon this type of democratic decision-making the support of Aristotle,Kant, Rousseau, Mill, Dewey, Arendt, Rawls, and Habermas, amongothers (see Bohman 1996). It is not exactly a new political ideal.

What is new is proposing this form of decision-making for multilateralorganization. At a minimum, the proposal urges all multilateral organi-zations to continuously discuss and coordinate their policies andstructures with representatives from a wide variety of international andlocal citizens'groups, business associations, private aid donors, and laborunions, as well as local national, and regional governments, parliaments,and international organizations. The aim should be to start an open-minded debate in which is heard the greatest plurality of perspectivesthat is still compatible with effective multilateral decision-making.a

Such multilateral deliberation holds four promises. First, increaseddeliberation would break open the "iron cages"s in which various multi-lateral organizations have locked themselves. It would increase thenumber of policy perspectives considered within multilateral organiza-tions and encourage comparison and debate. It would stimulate a searchfor synthetic policy solutions that would address the normative and otherconcerns of a larger plurality of viewpoints. Thus, it could improve thedesign and implementation of multilateral poliry.In this way, the outputlegitimacy of multilateral organizations might improve.

Second, deliberation might also solidify their "input legitimacy"(Scharpf '1,998b,2) in a more practical way than other proposals foresee.Input legitimacy stands for the extent to which public policy decisionsare in accord with the will of those whose lives will be impacted.Other proposals prescribe increasing the hold of representative (ratherthan deliberative) democracy on multilateral decision-making, either byfounding global parliaments or by subjecting international organizationsto more direct control by domestic authorities. As has been argued above,although these plans certainly have their merits, they may either not besufficient or rather impractical. Deliberative debates invite the input of allthose who hold an opinion on the matter at hand, including, of course,those whose lives might be directly affected by the decision. This would,of course, create a problem if each individual who might be affected bya multilateral decision had her own particular take on the matter and was

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eager to get this across. In that case, deliberation would easily get boggeddown in a morass of opinions. But perception and cognition are social con-structs (Douglas), and the literature on policy debates (e.g., Sabatier and|enkins-Smith) shows that in many cases only a rather limited number oftruly alternative policy proposals are being advanced (see also Fiske;Thompson, Ellis, and Wildavsky).

Third, by becoming more deliberative, multilateral organizations couldalso serve as facilitators of more democratic processes within states thatare not true democracies (Sen, 15!154). Through discussing their poli-cies with representatives from local governments, labor unions, businessassociations, and citizens' groups, international organizations might beable to make up somewhat for the lack of human rights, dialogue, anddemocracy within countries. Effective implementation of the Compre-hensive Development Framework would indeed bring the World Bankvery close to this aim. Pursuing this goal would require a lot of tact anddiplomacy from the civil servants of multilateral organizations. Yet, it willno longer do to impose policies forged between undemocratic govern-ments and aloof multilateral organizations upon domestic populationswho may not support these policies but who will have to bear the burdenof any failures (Adams).

Last, deliberative transboundary practices could offer alternativeinstitutional arrangements that might bypass or complement the workof multilateral organizations (Fung this issue; Reinicke).6

To make multilateral organization safe for deliberation, a few nonis-sues need to be cleared away. Arguments exist against the participationof citizens'groups in multilateral decision-making. As more deliberationwould, at a minimum, involve greater consultation with such organiza-tions (besides local governments, business Broups, and labor unions),these objections need to be dealt with. One frequent complaint is thatcivil-society associations are not "representative"-that is, they are notdemocratically elected (see, e.g., Economist 2000b; Keohane and Nye,73-],4; Scholte, 119; Woods, 97). There are several ironies involved here.The complaint is usually filed by academics and journalists who them-selves attempt to influence the debate on multilateral organization, andwho of course have their own biases. (In fact, the effort to discredit par-ticipation by citizens' groups is itself an attempt to exercise influence.) Butwho has elected the journalists and academics writing on internationalmatters? They themselves are also not popularly chosen. The Economisthas many subscribers, but this number is smaller than the membershipof such citizens'associations as the World Wide Fund for Nature OVWF)and Greenpeace. Furthennore/ in striking up a dialogue with multilateralorganizations, these civil-society groups are simply copying consultativeprocedures that are well established in many democratic countries. Last,deliberating with citizens' associations (and many other groups) does notnecessarily entail handing over ultimate decision-making power to these

DELIBERATELYDEMOCRATZINGMULTILATERALORGANZAIION 13

associations. That all depends on the precise form that increased deliber-ation would take.

A related lament is that the most influential civil society groups are"Northern-based" and therefore tend to neglect the interests and plightof those in the "South" (Bhagwati2001.,27).ltis true that the largest envi-ronmental and human-rights groups have their headquarters in WesternEurope or North America, and that their leadership is dominated bypeople from these parts. However, it is almost always the case that thelarge citizens' groups (such as Environmental Defense, the NatureConservanry, the Sierra Club, and Transparenry International) rank thefate of the poorest people among their highest concerns and priorities.One may disagree with their perceptions of and proposed solutions todestitution and poverty. But that should lead to vigorous debate, not toattempts to exclude any views. Moreover, many citizens' groups based inthe North (for example, Friends of the Earth, \ /VVF, Greenpeace, the "50Years Is Enough" Network, Global Exchange, Public Citizen, the Jubilee2000 Campaign, and the International Forum on Globalization) makeextensive efforts to organize themselves transnationally and to alignthemselves with NGOs and individuals from the South. Plus, in settingup deliberative debates, it should be quite feasible to make room for theparticipation of the many Southern NGOs that have set up shop over thelast few decades.

A final objection holds that citizens' groups offer no alternatives tocurrent multilateral policies (Dunning) and that they have a feeble graspof economic fundamentals (Bhagwati 2007,22-25). For instance, RobertKeohane and ]oseph Nye (9) write of the "protestors' annoyingly naiveor even ignorant characterizations of the WTO, IMF and World Bank, andtheir frequent failure to understand even elementary economics." Apassage from that spirited defense of deliberative democracy, Mill's OnLiberty (116), springs to mind: "[T]hough the silenced opinion be an error,it may, and very commonly does, contain a portion of truth; and since thegeneral or prevailing opinion on any subject is rarely or never the wholetruth, it is only by collision of adverse opinions that the remainder of truthhas any chance of being applied." The civil-society groups that have beeninvolved in the protests against the WTO, the IMF and World Bank (suchas Public Citizen, Earth First!, and Global Exchange) typically offer thefollowing economic rationale against an unfettered liberalization andintegration of the world's markets (Alternatives Committee of the Inter-national Forum on Globalization; Danaher and Burbach; Gill, 13,1--135):Opening up domestic markets of developing countries to foreign compe-tition pits local companies against formidable multinational enterprises.This is hardly a level playing field, as the latter enterprises have betteraccess to capital, possess superior marketing skills and technology, andcan use their profits from other markets to undercut local competition.Once the multinational companies have eliminated local competition,

1,4 MARCO VERWEIJAND TIMOTHY E.IOSLING

they will use their newly acquired monopoly position to extract rentsfrom these markets. Moreover, their unique importance to the localeconomy, and their financial might, will allow them to decide governmentpolicy (regarding minimum wages, health and safety standards, envi-ronmental regulations, and labor unions) in their favor. This will be aneven likelier outcome in nondemocratic states (which make up the major-ity of developing countries), where firms and governments can form atight unison. Unemployment will rise, as many workers will not have theadequate skills to participate in the modernized economy. Social-securitybenefits and retraining programs are often absent in developing countries.Local institutions (i.e., forms of solidarity, authority, accountability, andjustice) may be disrupted by migration, unemployment, and new pro-duction patterns. If this happens, then alcoholism, drug abuse, and crimemay increase. The large international companies will also bring aboutuniformization of production and consumption activities, the dreaded"McDonaldizalion" of the world. Certainly, this analysis may not alwaysbe a valid or complete description of economic reality. However, it high-lights a number of social factors and forces that are quite often overlookedin standard, neoclassical economic analysis (Douglas and Isherwood;Rodrik 2001): the influence of political and military power on economicarrangements; the importance of social networks and norms for the func-tioning of economic systems (and vice versa: the innate importance ofcertain types of work for the continued functioning of social systems); theintrinsic value that the ways in which goods are produced and consumedoften have for people; and the many practical difficulties that can standin the way of the money transfers needed to make economic changesPareto-efficient. This is not to take sides in the debate for or against dereg-ulation of international markets. It is merely to point out that even quiteradical economic analyses may contain portions of truth that should notbe dismissed a priori.

We do not argue that more deliberation is all that is needed. It mightnot even be possible to induce all multilateral organizations to becomemore deliberative without instituting more representatively democraticcontrols at the same time (Stiglitz this issue). Perhaps only vigorous over-sight by countries' representatives can ensure that multilateral organiza-tions will continue to engage in deliberation once the present furor hasebbed away. And, many of the voices currently engaged in multilateraldebates also desire more oversight by popularly elected bodies. Thus,expanding multilateral deliberation would probably only cause the callfor establishing and strengthening other forms of democracy-at both thenational and international level-to grow stronger. In the end, the lack ofdemocracy and plurality among multilateral organizations might best besolved through a continuously shifting and contested mix of deliberativeand representative forms of decision-making (Coleman and Porter).

What precise forms should more deliberative multilateral decision-making take? Deliberative practices come in many shapes, ranging from

DELIBERATELYDEMOCRATZINGMULTILAIERALORGANIZATION 15

decision-making through extensive debate among all involved citizens (riIa Dryzek) to the careful weighing of opposing perspectives by politicaland bureaucratic elites (Bell). This variety of deliberative types comes inhandy, as it is unlikely that all multilateral organizations would be bestserved by one deliberative model. The precise form of deliberation thatbest suits a particular multilateral organization should be discovered ina continuing dialogue between its board of governors and civil servantswith representatives of enterprises, labor unions, national parliaments,and international and local citizens' associations. That is, part and parcelof making multilateral organizations more deliberative is a continuingdeliberation about the precise ways in which particular internationalorganizations should become so. Perhaps it might be best for many mul-tilateral organizations to continuously engage in an open-minded debateover their policies and structures with a wide variety of stakeholderswithout offering up ultimate decision-making power to nonstate organi-zations. This is, however, merely a suggestion, though one that is sharedby all contributors to this issue.

In 1859, John Stuart Mill (110) wrote:

In politics again, it is almost a commonplace that a party of order or stabilityand a party of progress or reform are both necessary elements of a healthy stateof political life . . . Each of these modes of thinking derives its utilities from thedeficiencies of the other; but it is in great measure the opposition of the otherthat keeps each within the limits of reason and sanity.

It seems high time that all multilateral organizations finally, fully embracethe insight that Mill called a "commonplace" some 150 years ago. Thecontributions to this special issue address this issue. Appropriately, thearticles discuss, and advocate, alternative ways in which different inter-national organizations can be made more deliberatively democratic.

Loren King provides a useful overview of the literature on deliberativedemocracy and, in doing so, builds an argument for increased delibera-tive decision-making at the multilateral level based upon a "worst-casescenario." In his view, even if deliberation neither improved the epistemicvalue of the arguments considered nor facilitated cooperation and under-standing, it could still be defended on solid normative grounds. Accord-ing to this normative ideal, public policies should not be implementedwithout (1) having been extensively justified to and openly debated withthe people whose lives will be impacted by these policies, and (2) havingbeen decided upon in procedures that the people involved have freelyconsented to. Thus, King settles on an input argument for increased mul-tilateral deliberation.

By contrast, Susanne Lohmann advances an output argument. She(105) claims that domestic and international institutions need to be"messy": that is, to function well they need to be monitored by a diverseset of audiences. She illustrates her argument with the German Bundes-bank,the European Monetary Union (EMU), and the IMF. In her view, the

MARCO VERWEU AND TTMOTT{Y E. JOSLTNG

secret behind the Bundesbanl(s successes was not its often-praised inde-pendence from political interference, but rather its responsiveness to theperspectives, concerns, and interests emanating from a plurality of insti-tutional settings. She contrasts this balancing act with the behavior of themore isolated and aloof EMU and IMF and argues that the latter will onlystart to function more satisfactorily if they become rooted within a morediverse set of institutional settings and audiences.

The other contributions to this issue are less general in nature;they focus on the need for and the extent of deliberative practices (andother forms of democracy) among particular multilateral organizations.Robert Howse and Kalypso Nicolaidis analyze the WTO. They showthat within the legal institutions of the WTO, a variety of opportunitiesabounds for reformulating international trade rules, so as to let theserules reflect a greater variety of interests and goals than just economicgrowth. Howse and Nicolaidis call these opportunities institutionalsensitivity, political inclusiveness, and top-down empowennent. Infollowing these three principles, the WTO would open itself up to theperspectives and concerns of a wider range of actors than that limitedto national trade negotiators and lobbyists of multinational firms. Thus,the trade organization could become more deliberative and gain inputlegitimacy, without compromising the ultimate authority of the partici-pating governments.

Archon Fung focuses on the international efforts to improve labor stan-dards. He argues that within this particular issue area, little should beexpected from the ongoing deliberations within established intergovern-mental organizations such as the ILO. Their efforts to develop a minimumof formal, universal standards for labor conditions have been hamperedby vast differences of opinions and interests among governmentsinvolved. In order to achieve progress on labor conditions, in particularwithin developing countries, Fung advocates the further expansion of aglobal public space in which corporations, NGOs, labor unions, consumerorganizations, journalists, students, and others ferociously debate whatworking conditions should prevail in particular places and whether theseconditions have already been achieved. By publicly debating their con-flicting arguments and evidence, these actors would seek to induce inter-ested citizens and governments around the world to use their economicand political power to punish certain enterprises and practices andreward others. Contrary to the perspective sketched by Howse and Nico-laidis, the picture painted by Fung holds that transnational deliberativepractices can and should bypass-and complement-the work of multi-lateral organizations. Whereas Howse and Nicolaidis argue that increaseddeliberation can take place within the multilateral forum that is the WTO,Fung is less sanguine about the chances of reforming international orga-nizations working on labor relations. Instead, he stresses the possibilitiesof engaging in "decentralized deliberation" in this issue area. Still, thereis room for a transnational public authority in Fung's vision. He argues

DELIBERATELYDEMOCRATTZINGMULTILATERALORGANZANON 1,7

for the establishment of such an authority that would foster vigorousdebate on labor conditions by acting as a clearinghouse for informatioryas well as by ensuring that the voices of less powerful organizations andpeople are heard.

Finally, in his analysis and critique of the world Bank and the IMF,foseph stiglitz points towards the potential role that representativedemocracy can play in expanding the perspectives and inteiests consid-ered during the making of multilateral policy. stiglitz pleads for greaterpublic access to the records of the Bank and the IMF, more stringentcontrol of these institutions by their boards of governors (representing themember-states), expansion of these boards to include representativesfrom other ministries than just finance, and more voting rights for thegovernments of developing countries. According to stiglitz, the policiesof the Bank and the IMF will only become less counterproductive whenthe grip of national governments on both institutions ii strengthened inthese ways. In his view, the Bank has thus far reformed itself-more suc-cessfully than has the IMF. This more detailed analysis can be seen as onepossible specification of the various audiences to which the IMF and theworld Bank should become accountable, according to the more generalperspective offered by Lohmann.

The contributors to this special issue of Goaernance have, therefore,in common a belief that decision-making within multilateral organiza-tions should become more deliberatively democratic. They also sharethe view that this should not entail handing over ultimite decision-making authority within multilateral organizations to nonstate actors.The authors differ from each other regarding the precise justificationsthey offer for increased deliberation and the exact ways in which theysuggest multilateral organizations should be made more deliberative$democratic. And this is as it should be. International organizations differfrom each other in their missions, organizational cultures, and institu-tional settings. Thus, it is unlikely that one particular model of de-liberative decision-making will always be best for all. Moreover thedeliberative ideal itself invites a never-ending debate about the pros andcons, as well as the precise forms, of deliberative decision-making at theinternational level. This special issue aims to make a contribution to thisongoing debate.

ACKNOWLEDGMENTS

I would like to thank Adrienne Hdritier, Tim fosling, Dirk Lehmkuhl,susan okin, and Vincent ostrom for their helpful comments on a previ-ous draft of the introduction. This special issue is based on a one-dayworkshop on "Deliberately Democratizing Multilateral organization,,lhat ]im Josling and I held in september 2000. I am very grateful tostanford Universit5/s European Forum for having hosted uottr ttre work-shop and me (for a seven-month stay).

1.

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18 MARCO VERWEU ANDTTMOTT{Y E.IOSLTNG

NOTES

That this has acfually happened is one of the main conclusions of a recentstudy of the relationships between multilateral economic organizations andglobal social movements (O'Brien, Goetz, Scholte and Williams, 20G234).ftharpf (1998b,2) sets out the distinction between the'tnput" and "output''legitimacy of public policies. "Input" legitimacy stands for the extent towhich those who will be affected by public policies have been involved inthe decisions leading up to these policies. "Output" legitimary representsthe degree to which public policies have actually satisfied the desires ofthose who are affected bv them.The view that nothing needs to be done, as increasing liberalization andinterdependence itself represent the spread of democrary, is alive andkicking (see, for example, Lehmann).Increased deliberation would blur the boundaries between the multilateralorganizations, on the one hand, and their "environmenf' (made up in partby local and transnational NGOs and other governmental bodies) on theother. Hence, the singular "multilateral organization" in the title of thisspecial issue.This invokes the usual English translation of Weber's (835) term "stdhler-nen Gehduse" (steel case).Fritz Scharpf (1998b) has advocated yet another way in which increaseddeliberation could help citizens cope with increasing international interde-pendence and its threat to democracy. In his view, more deliberativedecision-making within countries is called for to ward off this threat.

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