When do NGOs Matter? Activist Organisations as a Source of Change in the International Debt Regime

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When do NGOs Matter? Activist Organisations as a Source of Change in theInternational Debt RegimeAndré Broome

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When do NGOs Matter? Activist Organisations as a

Source of Change in the International Debt Regime

ANDRE BROOME�

Who drives change in international economic regimes? While mainstream InternationalPolitical Economy scholarship has traditionally focused on the major players withinstates and markets as the key sources of political and economic change, recent studieshave sought to highlight the important role that is also played by a wider range ofsocial actors. A common point of reference here is the activities undertaken by non-governmental organisations (NGOs), with the campaign to put debt relief for heavilyindebted poor countries on the global agenda being often cited as the exemplar of acivil society success story. This article explores the mechanisms through which the inter-national sovereign debt regime for the world’s poorest and most indebted economies haschanged over the last 15 years, with increasing acceptance that large-scale debt relief wasappropriate for a select group of countries leading to the establishment of the heavilyindebted poor countries (HIPC) Initiative in 1996 and the Enhanced HIPC Initiativein 1999. Through tracing how international NGOs were able to shape the reformagenda with respect to the international sovereign debt regime for low-income countries,the article seeks to enhance our understanding of when, why, and how NGOs can poten-tially act as an important source of change in international economic regimes.

Introduction

Understanding the sources of change and continuity in international economicregimes has been a central concern of International Political Economy (IPE) scho-larship since the sub-discipline of International Relations (IR) first emerged in theearly 1970s.1 Yet despite this central focus on exploring how and why changeoccurs in international regimes, as well as investigating the sources of continuity,the majority of mainstream IPE scholarship has tended to focus on a narrow rangeof elite actors as the principal groups or individuals capable of effecting regimechange. For much of its history, the analysis of political and economic change inthe field of IPE has rather narrowly concentrated on the activities of majorstates, as well as changes occurring in the “big end of town” in financial

� I am grateful to Chris May, Leonard Seabrooke, and two anonymous reviewers for their helpfulsuggestions on earlier drafts of this article. I also wish to thank the participants at the 2008 BISA Inter-national Political Economy Group Workshop for their useful comments and suggestions.

1. Benjamin J. Cohen, International Political Economy: An Intellectual History (Princeton: PrincetonUniversity Press, 2008).

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markets, trade, and production.2 Broader social mechanisms—such as thepressures generated by non-elite actors, small states, gender relations, indigenouspolitics, and grassroots public campaigns—have tended to play a marginal role inaccounts of change in international economic regimes. Scholars have instead con-centrated on adding to what we know about how a very narrow range of actorswork—and the reasons why their actions achieve or fail to achieve change. As aresult, while there has been an exponential increase in the stock of IPE “knowl-edge” as the field has developed, many otherwise worthy contributions havefailed to move beyond conventional understandings of who is able to act in theglobal political economy and, more importantly, whose actions matter and how.

In order to move beyond the focus on exploring political and economic changesimply as a result of the interaction of major states on the one hand and importantmarket actors on the other, this article focuses on the role that non-governmentalorganisations (NGOs) may be able to play in shaping the process of change withinstates and markets.3 To do so, the article draws on the incremental process ofchange in the international sovereign debt regime for heavily-indebted poorcountries (HIPCs) to highlight how, when, and why NGOs may be able to exertinfluence on changes in international economic regimes, as well as the potentiallimits to this influence. As one of the best-known “success stories” of a co-ordinated public advocacy campaign among NGOs to effect political change,the customisation of the international sovereign debt regime for HIPCs may notbe generalisable to other areas of IPE where NGOs have sought to exert an influ-ence. This is nonetheless a useful case to revisit because it provides a window onhow the actions of NGOs may influence change in states and markets by revealingthe mechanisms through which such change occurs, as well as how pressures forchange may be blocked or channelled in ways that result in unintended outcomes.

The article proceeds as follows. First, how the sources of change in the globalpolitical economy are conventionally understood, and how NGOs have gainedincreased scholarly attention in recent years as a potential remedy to the perceiveddemocratic deficit of the major international economic organisations is discussed.Second, the gradual emergence of international debt norms that formed the termson which debtor states could renegotiate their sovereign loans when faced withdifficult economic circumstances is examined. Third, the role of NGOs in effectingchange in the international sovereign debt regime for HIPCs is investigated. Here,in particular, the focus is on how international NGOs’ public pressure for changewas translated into substantive change in practice through reframing how thesovereign debt problems of HIPCs were understood by policy makers, therebyaltering the basis on which new policy proposals were evaluated. Finally, thearticle concludes by arguing that IPE as a field needs to develop broader andmore inclusive accounts of the range of actors that shape the evolution of inter-national regimes. At the same time, the article calls for greater attention to befocused on specifying the mechanisms through which NGOs are able successfully

2. Leonard Seabrooke, The Social Sources of Financial Power (Ithaca, NY: Cornell University Press,2006), p. 3.

3. On the problems associated with the concept of “non-governmental organisation”, see NorbertGotz, “Reframing NGOs: The Identity of an International Relations Non-starter”, European Journal of

International Relations, Vol. 14, No. 2 (2008), pp. 231–258. On the rapid growth of NGOs in the post-war period, see Kim D. Reimann, “A View from the Top: International Politics, Norms and the World-wide Growth of NGOs”, International Studies Quarterly, Vol. 50, No. 1 (2006), pp. 45–67.

60 Andre Broome


to exert pressure for political change, to complement the existing work in IPE—and IR more broadly—that has concentrated on the normative role of NGOs ininternational affairs.

NGOs and the Sources of Change in the Global Political Economy

Despite the broadening of the subject matter of the field over the last two decades,many IPE scholars would continue to agree with Robert Keohane’s statement in hisseminal work After Hegemony that “Wealth and power are linked in internationalrelations through the activities of independent actors, the most important ofwhich are states.”4 The state remains the key institutional fulcrum in most expla-nations of how change is effected in the world economy, notwithstanding theincreased focus in recent years on how competing sources of authority may alsogenerate pressure for international political change (such as actors who can exercise“moral authority” or “private authority”).5 Indeed, even as the research agenda onthe evolution and impact of international norms on state behaviour has expanded,with numerous empirical studies demonstrating the catalytic role that non-stateactors can play in the global transmission of norms and the sanctioning of normtransgressions,6 the fundamental role of the state continues to be affirmed.

Although there remains a continued emphasis on the centrality of the state as theprimary actor in IR, and state–market interactions as the primary focal point inmainstream IPE, scholars have begun to focus their attention more directly onexploring the role of domestic actors in generating pressures for local, national,and international political change. Yet despite the pioneering research of scholarssuch as Peter Katzenstein,7 who made a strong case for the importance of analysinghow countries’ domestic politics matter for international relations, progresstowards routinely incorporating “low politics” into the study of IR as a matter ofcourse has been uneven and gradual. Nevertheless, the need to take into accounta state’s domestic politics as an essential methodological step for understandingits external strategic objectives now receives wide support. In a recent IPE textbook,for instance, Michael Hiscox argues that “Understanding why governments makethe particular choices they do requires careful attention to the political pressuresthey face from different domestic groups”, as well as studying how these variouspressures are mediated by a state’s domestic institutions.8 While this represents sig-nificant progress in a discipline that has tended to eschew the parochial politics ofstates’ domestic affairs in order to concentrate on the “high politics” of inter-staterelations, thereby drawing an analytic line in the sand to demarcate two distinct

4. Robert O. Keohane, After Hegemony: Cooperation and Discord in the World Political Economy

(Princeton: Princeton University Press, 2005/1984), p. 18.

5. Rodney Bruce Hall and Thomas J. Biersteker (eds.), The Emergence of Private Authority in Global

Governance (Cambridge: Cambridge University Press, 1999); Rodney Bruce Hall, “Moral Authority asa Power Resource”, International Organization, Vol. 51, No. 4 (1997), pp. 591–622.

6. See Thomas Risse, Stephen C. Ropp and Kathryn Sikkink (eds.), The Power of Human Rights: Inter-

national Norms and Domestic Change (Cambridge: Cambridge University Press, 1999); Martha Finnemoreand Kathryn Sikkink, “International Norm Dynamics and Political Change”, International Studies Quar-

terly, Vol. 52, No. 4 (1998), pp. 887–917; Ann Florini, “The Evolution of International Norms”, Inter-national Studies Quarterly, Vol. 40, No. 3 (1996), pp. 363–389.

7. Peter J. Katzenstein, Small States in World Markets (Ithaca, NY: Cornell University Press, 1985).

8. Michael Hiscox, “The Domestic Sources of Foreign Economic Policies”, in John Ravenhill (ed.),Global Political Economy (Oxford: Oxford University Press, 2005), p. 51.

When do NGOs Matter? 61


spheres of politics that many politicians would find spurious, the range of non-state(and non-market) actors that have received sustained attention among mainstreamIPE scholars has, until recently, remained fairly limited.

The most obvious exception to the continued focus on states and markets in IPE isthe increased attention many scholars have given to examining the changing rolesthat NGOs now play in some important dimensions of international affairs.9 In par-ticular, many scholars have begun to focus more closely on the interactions betweenNGOs and international economic organisations such as the International MonetaryFund (IMF),10 the World Bank,11 and the World Trade Organization.12 This has beendriven in part by the changing practices of the institutions themselves. In an effort toimprove their public image, and thereby ameliorate perceived “legitimacy crises”,13

several of the major international economic organisations have turned to increasedcivil society participation as a catch-all solution in response to the trenchant criti-cisms they have recently faced.14 In addition, some scholars have sought to buildan explicitly normative case for expanding the international role of NGOs and“global civil society” more broadly. From a cosmopolitan perspective, forexample, progressive goals can be achieved through incorporating NGOs withinthe formal decision-making structures of international economic organisations, asa means to achieve greater democratisation. In contrast, critical perspectives envi-sage NGOs remaining outside formal structures of public authority, as independentactors that might help to increase critical reflection and public deliberation aboutglobal governance.15

9. Michele M. Betsill and Elisabeth Corell, “NGO Influence in Environmental Negotiations: A Fra-mework for Analysis”, Global Environmental Politics, Vol. 1, No. 4 (2001), pp. 65–85.

10. Andrew Sumner, “In Search of the Post-Washington (Dis)consensus: The ‘Missing’ Content ofPRSPs”, Third World Quarterly, Vol. 27, No. 8 (2006), pp. 1401–1412; Ben Thirkell-White, “The IMFand Civil Society”, New Political Economy, Vol. 9, No. 2 (2004), pp. 251–270.

11. Paul J. Nelson, “Internationalising Economic and Environmental Policy: Transnational NGONetworks and the World Bank’s Expanding Influence”, Millennium, Vol. 25, No. 3 (2001), pp. 605–633; Susan Park, “Norm Diffusion within International Organizations: A Case Study of the WorldBank”, Journal of International Relations and Development, Vol. 8, No. 2 (2005), pp. 111–142; SusanPark, “How Transnational Environmental Advocacy Networks Socialize International Financial Insti-tutions: A Case Study of the International Finance Corporation”, Global Environmental Politics, Vol. 5,No. 4 (2005), pp. 95–119.

12. Luis Cabrera, “The Inconveniences of Transnational Democracy”, Ethics and International Affairs,Vol. 21, No. 2 (2007), pp. 219–238; Baogang He and Hannah Murphy, “Global Social Justice at the WTO?The Role of NGOs in Constructing Global Social Contracts”, International Affairs, Vol. 83, No. 4 (2007),pp. 707–727; Jan Aart Scholte, Robert O’Brien and Marc Williams, “The WTO and Civil Society”, Journal

of World Trade, Vol. 33, No. 1 (1999), pp. 107–124.

13. See Jacqueline Best, “Legitimacy Dilemmas: The IMF’s Pursuit of Country Ownership”, ThirdWorld Quarterly, Vol. 28, No. 3 (2007), pp. 469–488; Daniel C. Esty, “The World Trade Organization’sLegitimacy Crisis”, World Trade Review, Vol. 1, No. 1 (2002), pp. 7–22.

14. Thirkell-White, op. cit., pp. 255–257; Dieter Plehwe, “A Global Knowledge Bank? The WorldBank and Bottom-up Efforts to Reinforce Neoliberal Development Perspectives in the Post-WashingtonConsensus Era”, Globalizations, Vol. 4, No. 4 (2007), pp. 518–520; Pamela Blackmon, “RethinkingPoverty through the Eyes of the International Monetary Fund and the World Bank”, International

Studies Review, Vol. 10 (2008), pp. 179–202.

15. See William Smith and James Brassett, “Deliberation and Global Governance: Liberal, Cosmo-politan, and Critical Perspectives”, Ethics and International Affairs, Vol. 22, No. 1 (2008), pp. 69–92; cf.Kerstin Martens, “Institutionalizing Societal Activism within Global Governance Structures:Amnesty International and the United Nations System”, Journal of International Relations and Develop-

ment, Vol. 9, No. 4 (2006), pp. 371–395.

62 Andre Broome


How the concept of civil society is understood by different actors is, of course,neither universal nor natural.16 For instance, the tendency among many scholarsexplicitly to define civil society actors as “non-violent” does not always matchwith the shared understandings of non-elite social actors in different parts ofthe world, who may see groups that engage in violence as legitimate.17 In additionto the substantial differences in how the concept may be understood by academicsin comparison with the everyday experiences of non-elites,18 there is also a signifi-cant difference between the broad academic understanding of civil society as“a rule-governed society based on the consent of individuals”19 and the waythe concept is operationalised by institutions such as the IMF, which has soughtto improve country ownership of its economic reform programmes throughincreased dialogue with a select group of civil society actors.20

The key point to draw from this is that the concept of civil society in general, aswell as the specific roles played by individual NGOs, should not be understood asintrinsically good or necessarily progressive.21 The aim here is therefore not toreproduce the classical liberal assumption that civil society is inherently goodwhile government, if not kept in check by a strong civil society, is inherentlybad.22 Rather than assume that the actions of NGOs necessarily represent a legit-imate political agenda in opposition to the illegitimate agenda of internationaleconomic organisations and their dominant member states,23 this article seeksmore narrowly to explore the mechanisms through which NGOs, as a particularclass of political actors, were able to shape the global political agenda in a specificissue area—the evolution of the international sovereign debt regime for low-income countries.

The Emergence of International Sovereign Debt Norms

The co-ordinated campaign among NGOs to push for substantive changes to theinternational sovereign debt regime provides a useful case study of the role of civilsociety actors in the global political economy for two principal reasons. First, thedebt campaign appears to represent an NGO “success story”, where the public

16. See Louise Amoore and Paul Langley, “Ambiguities of Global Civil Society”, Review of Inter-national Studies, Vol. 30, No. 1 (2004), pp. 89–110.

17. Nick Henry, “A Civil War? Violence and Non-violence in a Democracy Movement”, Paper pre-sented at the Pan-European Conference on International Relations, Torino, 12–15 September 2007,available: ,http://archive.sgir.eu/uploads/Henry-A%20Civil%20War%20-%20Nick%20Henry%20-%20PECIR%20paper.pdf . (accessed 20 January 2008).

18. Rene Lemarchand, “Uncivil States and Civil Societies: How Illusion Became Reality”, Journal ofModern African Studies, Vol. 30, No. 2 (1992), p. 179.

19. Mary Kaldor, “The Idea of Global Civil Society”, International Affairs, Vol. 79, No. 3 (2003),pp. 583–593.

20. Thomas C. Dawson and Ghita Bhatt, The IMF and Civil Society Organizations: Striking a Balance

(Washington, DC: IMF, 2001), available: http://www.imf.org/external/pubs/ft/pdp/2001/pdp02.pdf(accessed 20 April 2008); Best, op. cit.; Thirkell-White, op. cit., p. 256.

21. See Julie Hearn, “African NGOs: The New Compradors?”, Development and Change, Vol. 38,No. 6 (2007), pp. 1095–1110.

22. Steven Scalet and David Schmidtz, “State, Civil Society, and Classical Liberalism”, NancyL. Rosenblum and Robert C. Post (eds.), Civil Society and Government (Princeton: Princeton UniversityPress, 2002), pp. 30–32.

23. Ian Clark, “Legitimacy in a Global Order”, Review of International Studies, Vol. 29, No. 1 (2003),p. 77.



campaign waged by international NGO networks such as the European Networkon Debt and Development (Eurodad), Oxfam International, and Jubilee 2000 iscommonly perceived to have played a role in reconstructing how the governmentsof major states conceived their interests in relation to the outstanding debts owedby low-income developing countries. While the apparent success of this cam-paign, compared with other NGO efforts, makes generalisations difficult, it doesprovide a concrete example of international political change with identifiableoutcomes which allows us to look more closely at the social mechanisms bywhich this was achieved. Second, when placed in a broader historical contextthe debt campaign would also seem to provide an example of a highly unlikelysuccess story, where a handful of (relatively) poorly resourced social groups,with no means to exercise coercive forms of power, were pitted against influentialelite actors and the established norms and rules of the international financialsystem. In this respect, although the fruits of the campaign were a long timecoming and the resulting policy initiatives continue to be subject to a range of cri-ticisms,24 the shift in the principles governing the treatment of sovereign debtowed to official creditors that these initiatives embody represents a significantchange in the international debt regime.

The key change in the principles underlying the treatment of sovereign debt bybilateral official creditors and multilateral institutions that has occurred duringthe last two decades is the weakening of pacta sunt servanda—the principle that“pacts must be respected”.25 An exception to the principle of pacta sunt servandain international law is provided by the principle of rebus sic stantibus, which poten-tially allows international agreements to be broken in the case of fundamentalchanges in the circumstances pertaining to an agreement, and when upholdingthe agreement would be inequitable.26 The weakening of the principle of pactasunt servanda with respect to the international debt regime occurred first withbilateral sovereign debt owed to other governments, and later in the case ofdebt owed to multilateral lenders such as the IMF and the World Bank, whichhad previously sought to protect their preferred creditor status by ensuring thatmultilateral debts were repaid.27 Securing the protection of external creditors’property rights in their dealings with sovereign governments, and in particularensuring that states honour promises to fulfil debt contracts by maintaining inter-est payments, has been a central concern of international economic rule-makingthroughout the last two centuries. Although sovereign debts have often beensubject to renegotiation (or in some cases outright default), these changes there-fore represent a major shift away from the previous treatment of sovereign debtcontracts for a restricted group of low-income countries.

24. Jonathan E. Sanford, “IDA Grants and HIPC Debt Cancellation: Their Effectiveness and Impacton IDA Resources”, World Development, Vol. 32, No. 9 (2004), pp. 1585–1588; Christian Barry and LydiaTomitova, “Fairness in Sovereign Debt”, Ethics and International Affairs, Vol. 21, No. s1 (2007), pp. 41–79;Jubilee Debt Campaign, Unfinished Business: Ten Years of Dropping the Debt (London: Jubilee DebtCampaign, 2008), available: ,http://www.jubileedebtcampaign.org.uk/download.php?id ¼ 729.

(accessed 1 June 2008).

25. Barry and Tomitova, op. cit., p. 53.

26. Martti Kostkenniemi, From Apology to Utopia: The Structure of International Legal Argument

(Helsinki: Finnish Lawyers’ Publishing Company, 1989), pp. 280, 299.

27. M. Bowe and J.W. Dean, “Has the Market Solved the Sovereign-debt Crisis?”, Princeton Studies

in International Finance, 83 (Princeton: Princeton University Press, 1997), p. 13.

64 Andre Broome


While the process of developing international rules to protect the property rightsof foreign capital owners developed initially among industrialised countries,these rules were later extended to less-developed countries in Africa, Asia, LatinAmerica, and elsewhere through a combination of diplomatic intervention, bargain-ing, and coercion.28 In the post-Second World War era, the global diffusion andreinforcement of the basic principle that interest payments due on sovereigndebts must be maintained, even if the timetables for loan repayments are resched-uled or maturing debt is refinanced, has been undertaken by international economicorganisations such as the IMF and the World Bank.29 For example, in an attempt toestablish the new international organisation’s credibility with the internationalfinancial community, when it opened for business the World Bank refused tolend to any state that had defaulted on loans during the Great Depression of the1930s until those outstanding claims were settled.30

Both the IMF and the World Bank have played a central role in co-ordinating theresponse to sovereign debt crises during the last 25 years. In developing multilateralresponses to major sovereign debt crises, what is at stake in the terms of debt rene-gotiations is not simply the impact of a heavy repayment burden on the economicrecovery of the country in question or the distribution of the financial losses that willbe sustained by official or private creditors, but also the integrity of the internationalfinancial system itself.31 Moreover, when faced with major debt renegotiations andthe risk of sovereign default, the IMF’s own institutional reputation is on the line asa credible commitment mechanism that can help to provide confidence to externalcreditors that a government will meet its obligations.32

The onset of the 1980s debt crisis has been described as “the greatest chal-lenge to international economic stability that the world had faced since theGreat Depression”.33 Private lending to oil-importing developing countriesexpanded rapidly during the course of the 1970s, with bank loans throughthe euromarkets rising to $4.5 billion by 1973 from only $300 million in1970.34 By the late 1970s many developing countries had accumulated heavyexternal debt burdens, both in terms of the total stock of public and publicly guar-anteed debt denominated in US dollars as well as rapidly increasing debt-serviceratios. In Brazil and Argentina, for instance, the ratio of debt-service payments toexport earnings doubled between 1973 and 1978, while Mexico’s debt-service ratioincreased from 30.3% to 74.1%. The rapid increase in foreign borrowing was duein part to encouragement from Organisation for Economic Cooperation andDevelopment (OECD) countries for banks to lend to developing countries to alle-viate their worsening balance of payments positions during the 1970s, whichresulted from higher import prices generated by the oil shocks. To protect their

28. Charles Lipson, Standing Guard: Protecting Foreign Capital in the Nineteenth and Twentieth Centu-

ries (Berkeley and Los Angeles: University of California Press, 1985), pp. 9, 12.

29. Susanne Soederberg, “The Transnational Debt Architecture and Emerging Markets: The Politicsof Discipline and Punishment”, Third World Quarterly, Vol. 26, No. 6 (2005), pp. 929–930.

30. Lipson, op. cit., pp. 169–170.

31. Ibid., p. 172.

32. See Andre Broome, “The Importance of Being Earnest: The IMF as a Reputational Intermedi-ary”, New Political Economy, Vol. 13, No. 2 (2008), pp. 125–151.

33. Ethan B. Kapstein, Governing the Global Economy: International Finance and the State (Cambridge,MA: Harvard University Press, 1996), p. 81.

34. Jose Antonio Ocampo, Jan Kregel and Stephany Griffith-Jones (eds.), International Finance and

Development (London: Zed Books/United Nations, 2007), p. 109.



own export earnings, major OECD countries encouraged developing countries toaccommodate the new international economic environment through externalborrowing rather than to take the painful route of radical adjustment of theirpolicy settings, in the belief that deficit countries could trade their way out oftrouble through increasing exports. At the same time, relatively high inflationrates meant that interest rates on sovereign debt remained low in real termsduring the 1970s, thereby making borrowing to fund balance-of-paymentsshortfalls and development projects an attractive short-term option for manygovernments.35

Following the second oil shock in 1979, a world recession, and higher interestrates around the world stemming from monetary policy changes in the UnitedStates, the growing debt burden in developing countries came to a head inAugust 1982 with the announcement by Mexico’s finance minister that the gov-ernment was suspending its forthcoming interest payments on foreign bankloans. In the immediate aftermath of Mexico’s announcement, the US governmenttook the lead, together with the central banks of other major OECD economies, inorganising a large bailout package to extend new loans to the country in anattempt to contain the short-term effects of Mexico’s debt moratorium for theinternational financial system, with the United States later continuing to play akey role in negotiating debt rescheduling and refinancing agreements betweenthe Mexican government and commercial banks. Following Mexico’s debt mora-torium, 20 other developing countries sought debt rescheduling agreementsduring 1983, with the IMF gaining increased responsibility for co-ordinatingdebt renegotiations between borrowing countries and commercial lenders.36

A key source of the IMF’s potential influence in the world economy stems fromits capacity to act as a reputational intermediary for its member states, by lendingcredibility to policy-makers’ efforts to achieve macroeconomic stability in adverseeconomic circumstances.37 During the 1980s debt crisis, the IMF’s importance toprivate creditors lay in the organisation’s ability to design and oversee macroeco-nomic stabilisation programmes for each country, which allowed lenders to avoidentanglement in a debtor country’s domestic politics, while the IMF’s involve-ment also helped to facilitate agreement on debt rescheduling terms among thenumerous private creditors that were involved.38 Less than a decade afterMexico’s announcement of a debt moratorium, increasing foreign investmentand economic growth in many Latin American countries led observers to con-clude that, notwithstanding the significant social and economic costs that hadbeen borne by developing countries, the debt crisis had been adequatelyresolved—at least as far as middle-income developing countries were concerned.For a large group of low-income developing countries, however, the debt crisis ofthe 1980s had left them with a reputation for being inherently “uncreditworthy”,with the result that many low-income countries continued to remain locked outfrom private sources of external finance.39

35. Kapstein, op. cit., pp. 70–71, 85–86.

36. Ibid., pp. 88–89.

37. Broome, op. cit.; cf. Mark Beeson and Andre Broome, “Watching from the Sidelines? The Declineof the IMF’s Crisis Management Role”, Contemporary Politics, Vol. 14, No. 4 (2008), pp. 393–409.

38. Lipson, op. cit., pp. 92–93.

39. Lex Rieffel, Restructuring Sovereign Debt: The Case for Ad Hoc Machinery (Washington, DC:Brookings Institution Press, 2003), pp. 3–4.

66 Andre Broome


In the post-Second World War era, renegotiations of sovereign debt owed toother governments have usually been dealt with on a case-by-case basisthrough the Paris Club, an ad hoc grouping of official lenders first convened in1956 as a forum for Argentina to renegotiate its outstanding debts with creditorgovernments. States seeking to reschedule the timetable for repaying officialloans must have an IMF programme in place in order to assure creditors thatthe new terms for repaying loans will be observed. In order for a country togain a debt rescheduling agreement through the Paris Club, three principles inparticular have to be upheld—imminent default, policy conditionality andburden sharing. First, countries must be able to demonstrate—through substantialarrears on external debt payments—that in the absence of a rescheduling agree-ment sovereign default is imminent, a diagnosis which often relies on the IMF’sshort-term balance-of-payments projections for a country. Second, creditor gov-ernments insist that a debtor country agree to a programme of reforms to nationalpolicy settings in order to resolve the causes of payment difficulties, usuallythrough an IMF loan agreement. Third, the costs of rescheduling debt must beshared among creditors according to the level of their exposure, with debtorcountries unable to grant a particular creditor more favourable terms thanothers.40 Because of the importance that creditors have attached to upholdingthese principles and the ad hoc nature of the Paris Club (similar to the LondonClub, where countries negotiate with private creditors to refinance debt owedto commercial banks), the process has served to isolate debtors while helping toensure solidarity among creditors.41

Throughout the debt crisis of the 1980s it was widely assumed that the solutionfor countries struggling with external debt was to balance the rescheduling ofrepayment obligations through the Paris Club with refinancing to safeguardthe integrity of the international financial system and, in particular, to upholdthe principle of pacta sunt servanda. In this respect, “the conventional wisdomwas that the debtors were illiquid but solvent if given enough time to pay”.42

OECD governments and the international economic organisations long soughtto avoid changing the international sovereign debt regime in any way thatrisked violating the principle of the sanctity of contracts.43 Debtor governmentshad argued strongly for sovereign debt relief, special treatment for low-incomedebtors, and a move away from case-by-case debt rescheduling in order toshelter debt renegotiations from bilateral strategic politics as key demands inthe New International Economic Order negotiations during the 1970s and early1980s.44 In response, a “moral hazard” counterargument was often put forwardagainst proposals to reduce sovereign debt stocks, which maintained thatdebtor governments must honour previous loan agreements, even if these werepaid off over an extended period of time, to avoid creating perverse incentives

40. Alexis Rieffel, “The Role of the Paris Club in Managing Debt Problems”, Essays in International

Finance, 161 (Princeton: Princeton University Press, 1985).

41. Charles Lipson, “The International Organization of Third World Debt”, International Organiz-

ation, Vol. 35, No. 4 (1981), p. 622.

42. Huw Evans, “Debt Relief for the Poorest Countries: Why Did it Take So Long?”, DevelopmentPolicy Review, Vol. 17, No. 3 (1999), p. 268.

43. Ibid., p. 270.

44. Thomas M. Callaghy, Innovations in the Sovereign Debt Regime: From the Paris Club to Enhanced

HIPC and Beyond (Washington, DC: World Bank Operations Evaluation Department, 2004), p. 5.



in the future for countries to increase their borrowing in order to secure a debtwrite-off.45

In contrast to middle-income developing countries that had borrowed heavilyfrom private creditors, the bulk of the debt owed by many low-income developingcountries stemmed from trade credits or credit guarantees that had been extendedby OECD countries’ export credit agencies in order to support their overseasexports.46 As a result, unlike middle-income debtors, low-income debtors weremore likely to face a prolonged period shut out from private sources of externalfinance, as most had restricted access to private financing even during the banklending boom of the mid-1970s. With their economic growth rates and terms oftrade continuing to deteriorate during the 1980s, in many cases the non-conces-sional cashflow relief available to low-income countries through the Paris Clubprocess only served to increase the overall stock of their outstanding debts overthe course of the decade.47

NGOs, Moral Authority, and Political Change

The process of customising the international sovereign debt regime for HIPCswas a long-drawn-out process that evolved haphazardly from the late 1980s.Beginning in 1988 with agreement on the Toronto Terms (which allowed fora maximum 33% reduction in official debt), Paris Club creditors began toaccept that substantively to address the chronic debt problems of low-incomecountries rather than simply applying a short-term bandage to disguise theirdifficulties required debt rescheduling on concessional terms, and at least apartial reduction in the stock of debt. When these changes to debt-servicingagreements failed to make a significant improvement in the debt stocks anddebt-service ratios of many low-income countries, this process continued toevolve through the 1990s.

The terms of debt renegotiations gradually became more generous as Paris Clubcreditors subsequently agreed on the Houston Terms in 1990 (enabling morefavourable rescheduling terms for middle-income debtors), the London Termsin 1991 (allowing for up to 50% debt reduction for low-income countries) andthe Naples Terms in 1994 (which increased debt reduction to a maximum of67% for the poorest countries that were eligible to borrow on concessionalterms from the World Bank’s International Development Association). This ledto further changes with the establishment of the HIPC Initiative under the aus-pices of the World Bank and the IMF in 1996 on the Paris Club’s Lyon Terms,which increased the level of debt reduction to 80% for a specific group of theworld’s poorest countries with high ratios of external debt to export earnings.The stated goal of the HIPC Initiative was that heavily indebted countriesshould finally make an exit from the continual process of debt reschedulingthrough achieving “debt sustainability”.48

45. William Easterly, “Reviewing Two Decades of Debt Relief”, World Development, Vol. 30, No. 10(2002), pp. 1679, 1681.

46. Christina Daseking and Robert Powell, From Toronto Terms to the HIPC Initiative: A Brief History ofDebt Relief for Low-income Countries, IMF Working Paper, WP/99/142 (Washington, DC: IMF, 1999), p. 4.

47. Anthony R. Boote and Kamau Thugge, “Debt Relief for Low-income Countries: The HIPCInitiative”, IMF Pamphlet Series, 51 (Washington, DC: IMF, 1999), p. 4.

48. Ibid., pp. 4–5; Callaghy, op. cit., pp. 16–17, 34–36.

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With the debt debate quickly progressing to proposals for 100% cancellation ofexternal debts owed to the OECD governments and the international economicorganisations by HIPCs in the late 1990s, the Enhanced HIPC Initiative wascreated in 1999 following a wide-ranging review by the international economicorganisations of the initial outcomes of the HIPC Initiative.49 This included theCologne Terms, which would extend up to 90% debt reduction for HIPCs that suc-cessfully graduated from the intensive policy surveillance and structural reformprocess that the IMF- and World Bank-supervised Enhanced HIPC Initiativeentails through the design of Poverty Reduction Strategy Papers for eligiblecountries.50 The international sovereign debt regime for heavily indebted poorcountries was further fine-tuned with the decision by the Group of 8 (G8)countries at the Gleneagles Summit in July 2005 finally to accept 100% cancellation(with some conditions) of HIPC debts owed to the IMF and the World Bank.51

The advocacy role of NGOs has played an important part in shaping the evol-ution of the sovereign debt agenda during the last decade and a half. Although theinternational sovereign debt regime had previously revolved around state inter-ests and inter-state bargaining, during the 1990s networks of NGOs led a con-certed push for OECD governments and the IMF and the World Bank to acceptthe principle of debt reduction for the world’s poorest and most indebtedcountries. This involved altering the terms that were used to describe and to inter-pret the issue of low-income developing country debt, in order to build publicsupport for a narrative that rich countries had an obligation to assist poorercountries through debt forgiveness. With the combined debt levels of the 41countries that were given the “heavily indebted poor country” label by the IMFand the World Bank during the 1990s rising from US$55 billion in 1980 toUS$183 billion in 1990 and US$215 billion in 1995, NGO networks focusing ondebt issues, such as Jubilee 2000, Oxfam International and Eurodad, sought to per-suade richer countries to act to alleviate extreme poverty in HIPCs. While thetransformative potential of civil society actors in the contemporary worldeconomy has sometimes been overstated in recent years,52 in this case NGOsplayed an important role in helping to shift the terms through which the inter-national debt debate was framed, thereby altering the criteria on which appropri-ate policy solutions were evaluated.53

Central to the co-ordinated NGO campaign to generate pressure for reform of theinternational sovereign debt regime was the construction and transmission of “amoral discourse that portrays developing country debt as an immoral burden onthe backs of the poor”.54 This encouraged the presentation of policy proposalsfor debt relief as a moral imperative, based either on religious principles or

49. IMF and World Bank Staffs, “100 Percent Debt Cancellation? A Response from the IMF and theWorld Bank”, IMF Issues Brief, 01/07 (Washington, DC: IMF, 2001), available: ,http://www.imf.org/external/np/exr/ib/2001/071001.htm. (accessed 15 April 2008).

50. David Craig and Doug Porter, “Poverty Reduction Strategy Papers: A New Convergence”,World Development, Vol. 31, No. 1 (2003), p. 60.

51. Eric Helleiner and Geoffrey Cameron, “Another World Order? The Bush Administration andHIPC Debt Cancellation”, New Political Economy, Vol. 11, No. 1 (2006), pp. 125–140.

52. Amoore and Langley, op. cit.

53. Callaghy, op. cit., pp. 6, 44; Evans, op. cit., p. 274.

54. Thomas M. Callaghy, “Networks and Governance in Africa: Innovation in the Debt Regime”, inThomas Callaghy, Ronald Kassimir and Robert Latham (eds.), Intervention and Transnationalism in

Africa: Global–Local Networks of Power (Cambridge: Cambridge University Press, 2002), p. 125.



secular ethics.55 In this respect, the NGO campaign to transform the principlesunderpinning the treatment of sovereign debt by official creditors relied on theexercise of moral authority to alter the frames that policy makers used to under-stand the debt problem and the policy choice set of possible solutions.56 FollowingThomas Biersteker and Rodney Bruce Hall,57 the foundation of NGOs’ moralauthority can be located in their capacity to provide an alternative source ofexpertise in a given issue area, combined with their status as “other-regarding”,non-self-interested actors in contrast with the self-interested agendas pursuedby national governments. In public discourse, frames can operate as a cognitiveconstraint on how a group of actors think about a particular political issue becausethey help to “call attention to some aspect of reality while obscuring otherelements”.58 In short, an actor or group of actors that can shape how an issue isframed may be able to tilt the political playing field in their favour, because thestrategic use of frames can influence what counts as a political problem, howthe causes are diagnosed and what possible solutions may be prescribed.59 Bypublicly articulating a common understanding of low-income countries’ debtproblems that was framed in moral terms, NGOs attempted to embarrass—or to“shame”—both IMF and World Bank officials as well as national policy makersinto viewing the insistence on full debt repayment for the poorest countries asan illegitimate position.60

NGOs specifically employed the strategic use of frames to encourage policymakers to conceptualise the high sovereign debt levels of low-income countries inmoral terms.61 This was achieved through the mass mobilisation of public supportin favour of the goal of debt relief for the poorest and most heavily indebtedcountries, a campaign which was strengthened by the involvement of high-profile celebrities such as Bono and Bob Geldof. In this respect, the debt reliefgoals of activist organisations were boosted by the “celebrity diplomacy” of indi-viduals such as Bono, who was able to gain one-on-one audiences at G8 summitswith leading politicians such as George W. Bush, Tony Blair, and GerhardSchroder, among others.62 Through a combination of the development of analy-tical expertise on debt issues, which strengthened the case for debt relief thatNGOs put to officials within the World Bank and the IMF, and public campaigns

55. Dot Keet, “The International Anti-debt Campaign: A Southern Activist View for Activists in ‘theNorth’ . . . and ‘the South’”, Development in Practice, Vol. 10, Nos. 3 and 4 (2000), p. 461.

56. See Joshua William Busby, “Bono Made Jesse Helms Cry: Jubilee 2000, Debt Relief, and MoralAction in International Politics”, International Studies Quarterly, Vol. 51, No. 2 (2007), pp. 247–275. On“moral authority” and international affairs, see Hall, op. cit.; Miroslav Nincic and Donna Nincic,“Humanitarian Intervention and Paradoxes of Moral Authority: Lessons from the Balkans”, Inter-national Journal of Human Rights, Vol. 8, No. 1 (2004), pp. 45–64; Chaim D. Kaufmann and RobertA. Pape, “Explaining Costly International Moral Action: Britain’s Sixty-year Campaign against theAtlantic Slave Trade”, International Organization, Vol. 53, No. 4 (1999), pp. 631–668.

57. Thomas J. Biersteker and Rodney Bruce Hall, “Private Authority as Global Governance”, in Halland Biersteker (eds.), The Emergence of Private Authority in Global Governance, op. cit., p. 218.

58. Robert M. Entmann, “Framing: Toward Clarification of a Fractured Paradigm”, Journal of Com-munication, Vol. 43, No. 4 (1993), p. 55.

59. Ibid., p. 52.

60. Keet, op. cit., pp. 461, 472.

61. See Barry and Tomitova, op. cit.; Elizabeth A. Donelly, “Making the Case for Jubilee: The Catho-lic Church and the Poor-country Debt Movement”, Ethics and International Affairs, Vol. 21, No. 1 (2007),pp. 107–133.

62. See Andrew F. Cooper, Celebrity Diplomacy (Boulder: Paradigm, 2008), p. 37.

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with clear slogans such as “Drop the Debt” and “Make Poverty History” that weresponsored by celebrities who could gain access to key G8 politicians, internationalNGOs were able to generate strong support for reforming the international sover-eign debt regime for HIPCs among the wider public as well as key policy-makingofficials.

By drawing on celebrity support to gain a greater media profile and public rec-ognition for their campaign, NGOs helped to dramatise the issue of debt relief bycontesting the fairness of the international debt regime and arguing that in itscurrent form it neglected a universal moral duty to assist the world’s poor. Withthe total stock of HIPC debt nearly quadrupling from 1980 to 1995, framing thedebt problems of low-income countries in terms of fairness helped to tie thegoal of debt relief to the broader issue of developed countries’ foreign aid respon-sibilities, which survey evidence suggests continues to enjoy relatively strongpublic backing in OECD countries.63 As a consequence, framing debt relief as amoral responsibility could resonate with the public in wealthy countriesbecause it chimed with the expectation that governments could and should actto alleviate poverty in less fortunate countries. When this was coupled with analy-sis from NGOs, such as Eurodad, which demonstrated that HIPCs faced anincreasing sovereign debt burden that they would be unable to service, as weshall see below, it helped to undermine the argument that debt relief wouldcreate a “moral hazard” problem in the international financial system. Yet whilethe development of rival expertise by NGOs was clearly important in buildinga case for debt relief, the moral component of the campaign waged by NGOswas crucial to the public legitimation of the principle of debt relief for heavilyindebted low-income countries.

Although barely noticeable until the late 1990s, even the IMF gradually began toarticulate in public a more explicit “moral concern with ensuring that the poorestaren’t left behind”, at the same time as linking this goal to further internationaleconomic integration.64 The success of NGOs in helping to change the terms ofreference for policy discussions of the sovereign debt problems of low-incomecountries represented a significant shift compared with the debt policy debatesof the mid-1990s. During the establishment of the HIPC Initiative in 1996—which extended much less generous debt relief terms than those later agreed in1999 for the Enhanced HIPC Initiative—state representatives on the ExecutiveBoard of the IMF continued to question the “moral hazard” problem thatthe initiative might produce.65 As late as 1998, IMF Managing Director MichelCamdessus warned an audience at a conference on the ethical dimensions ofinternational debt about the moral hazard risk that debt relief posed, whichmight stimulate “less than optimal policy by debtor governments . . . or recklessbehavior by investors—public or private”.66 During the process that led to the

63. Mark Otter, “Domestic Public Support for Foreign Aid: Does it Matter?”, Third World Quarterly,Vol. 24, No. 1 (2003), p. 117.

64. Jacqueline Best, “Co-opting Cosmopolitanism? The International Monetary Fund’s New GlobalEthics”, Global Society, Vol. 20, No. 3 (2006), p. 314.

65. IMF Archives, Debt Problems of Heavily Indebted Poor Countries—Framework for Action—

Draft Report to Interim and Development Committees, Executive Board Meeting Minutes, EBM/96/34(Washington, DC: IMF, 1996), p. 10.

66. IMF Archives, Addressing Concerns for the Poor and Social Justice in Debt Relief and Adjustment Pro-

grams, Address by Michel Camdessus, Managing Director of the International Monetary Fund, at the



establishment of the Enhanced HIPC Initiative in 1999, however, moral hazardconcerns gradually became less prominent. Instead, the extension of debt reliefcame to be viewed within the IMF as very closely associated with the goal ofimproving poverty reduction within heavily indebted poor countries because itwould help to free up resources to enable increased public expenditure in areassuch as health and education.67

To facilitate change in the international sovereign debt regime, a key politicalgoal pursued by NGOs was therefore to shift to a common understanding ofsovereign debt in low-income countries as a problem of social justice and fairnessrather than as a technocratic economic problem that required the maintenance ofthe principle of pacta sunt servanda to guard against moral hazard in the inter-national financial system. In this respect, NGOs were effectively arguing that fun-damental changes in the circumstances of heavily indebted poor countries hadcaused sovereign debt agreements to become inequitable, in line with the prin-ciple of rebus sic stantibus that would allow for existing agreements to bebroken. Within this broad overall strategy, which involved hundreds of NGOsactive in numerous countries around the world, different NGOs undertookspecific (albeit overlapping) tactical roles. These campaign tactics included pro-viding expert information to challenge the analysis of debt issues conductedby IMF and World Bank staff,68 raising the public profile of the debt problemthrough greater media coverage and “celebrity diplomacy”,69 arguing in favourof initiatives that would provide a comprehensive response common to all eligibledebtors rather than an ad hoc approach, and monitoring official creditors’compliance with previous agreements.70

The provision of an alternative source of expert analysis of debt issues to that con-ducted by the staff of the IMF and the World Bank was particularly important fortwo reasons. First, it helped to undermine the claim made in the early 1990s byboth the World Bank and the IMF that external debt was not the principal economicproblem faced by most low-income developing countries. Second, because bothorganisations base their claim to expert authority on undertaking top-quality analy-sis grounded in hard statistical data, challenging the IMF’s and the World Bank’sviews by talking in their own language of facts and figures meant that the casefor reform was likely to have greater resonance within the organisations them-selves. In addition, the tactical use of expert information by NGOs such asEurodad was important because the analysis conducted by IMF and WorldBank staff has long been criticised for the tendency to base projections on overly

Conference on the Ethical Dimensions of International Debt, Seton Hall University, South Orange,New Jersey, 22 October 1998 (Washington, DC: IMF, 1988), p. 4.

67. IMF Archives, Heavily-indebted Poor Country (HIPC) Initiative—Strengthening the Link BetweenDebt Relief and Poverty Reduction, EBS/99/168 (Washington, DC: IMF, 1999); IMF Archives, Modifications

to the Heavily-indebted Poor Country (HIPC) Initiative, EBS/99/138 (Washington, DC: IMF, 1999).

68. Sasja Bokkerink and Ted van Hees, “Eurodad’s Campaign on Multilateral Debt: The 1996 HIPCDebt Initiative and Beyond”, Development in Practice, Vol. 8, No. 3 (1998), pp. 325–326; Helen Yanaco-pulos, “The Public Face of Debt”, Journal of International Development, Vol. 16, No. 5 (2004), pp. 724–725.

69. Cooper, op. cit., p. 37.

70. Gail Hurley, Multilateral Debt: One Step Forward, How Many Back? (Eurodad, 2007), available:,http://www.eurodad.org/uploadedFiles/Whats_New/Reports/Microsoft_Word__Eurodad_MDRI_Update_April07_FINAL.pdf. (accessed 17 April 2008); Jubilee Debt Campaign/Jubilee USA, LooseEnds: The G8 Debt Deal and the Annual Meetings (London: Jubilee Debt Campaign, 2005), available:,http://www.jubileedebtcampaign.org.uk/download.php?id ¼ 137. (accessed 20 February 2008).

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optimistic assumptions about debtors’ economic growth prospects and exportperformance, which underestimates the severity of a country’s debt problems.71

This use of hard evidence helped to underpin and add credibility to the broadermoral critique of the international sovereign debt regime.

The main targets of NGO publications on debt issues were the international econ-omic organisations and their major shareholding governments in the G8. AsThomas Callaghy demonstrates, sympathetic “insiders” within G8 governmentsand the IMF and World Bank bureaucracies were sometimes able to draw fromthe NGO discourse on sovereign debt to support their own arguments in internalpolicy debates, which helped to validate the wider NGO debt reform agenda.72 Acrucial initial step was to convince both bilateral and multilateral official creditorsthat a systemic debt problem did in fact exist for a large group of low-incomecountries, and to define the scope of the problem through credible analysis.

Understanding the Influence of NGOs on the International Debt Regime

Evaluating the extent of NGOs’ influence and the mechanisms through which this isexercised is often difficult owing to the range of potential causal factors involved inthe process of change in international regimes, as well as the problems inherent inany attempt to establish an unambiguous link between the intentional actions ofNGOs and policy outcomes.73 Notwithstanding these methodological difficulties,the overall impact of the NGO campaign from the early 1990s onwards to transformthe principles underpinning the international sovereign debt regime depended to alarge extent on the following three key conditions. First, the identification and use offormal and informal pressure points where NGOs might be able to exert a persua-sive influence, which included lobbying individual governments at the nationallevel and during G8 meetings, targeting the Executive Boards of the IMF and theWorld Bank and seeking to influence the management and staff of the organisationsthrough both formal lobbying and, where possible, informal contacts. A secondimportant factor was the ability to take advantage of a window of opportunityfor change that was created by the chance confluence of a series of events. Thisincluded the appointment of a reform-oriented World Bank president, James Wol-fensohn, in 1995,74 as well as the election of the Labour government in the UnitedKingdom in 1997 which made more generous debt relief terms through reform ofthe HIPC Initiative a cornerstone of its foreign economic policy.75

Political support for reforming the international sovereign debt regime was alsodriven by actors as a means to achieve other political goals. For instance, supportfrom the United States for greater official debt relief was driven by the need to dealwith the massive level of sovereign debt owed by Iraq after 2003, as well as theinfluence of religious actors and economic conservatives in the RepublicanParty. Economic conservatives in the United States were keen to rein in the

71. Bokkerink and van Hees, op. cit., p. 325; Ocampo, et al., op. cit., p. 116.

72. Callaghy, op. cit., pp. 21–22, 27.

73. See Betsill and Corell, op. cit.; Paul Nelson, “Heroism and Ambiguity: NGO Advocacy in Inter-national Policy”, Development in Practice, Vol. 10, Nos. 3 and 4 (2000), pp. 478–490.

74. Callaghy, op. cit., p. 29.

75. Rob Dixon and Paul Williams, “Tough on Debt, Tough on the Causes of Debt? New Labour’sThird Way Foreign Policy”, British Journal of Politics and International Relations, Vol. 3, No. 2 (2001),pp. 150–172.



activities of the IMF and the World Bank by forcing the organisations to absorbthe cost of debt relief themselves, while religious actors—mobilised by JubileeUSA—argued that debt forgiveness was morally right.76

This is not to suggest that the pre-existing policy preferences of the Labour gov-ernment in the United Kingdom after 1997 and the Bush administration’s affinitywith many of the goals of religious groups in the United States can simply accountfor how the United States and the United Kingdom came to accept and to supportthe principle of an extension of debt relief for HIPCs. Rather, NGOs were able tobuild on these foundations to dramatise and promote their political goals. As thenBritish Chancellor Gordon Brown observed in 1999, agreement within the G8 onthe principle of greater debt relief was “[i]nspired by the campaign led bychurches and charities”.77 The point to note is that NGOs were able to buildupon these contextual factors to mobilise support for changes to the internationalsovereign debt regime, by connecting the Labour government’s stated position onthe debt problems of low-income countries and President Bush’s religious valuesto the principle of debt relief.78

In addition, the public relations damage suffered by the IMF as a result of itsactions during the Asian financial crisis in 1997/98 motivated the organisationto attempt to restore its reputation among both borrower and creditor governmentsthrough addressing some of the concerns raised by its critics.79 While among themajor international economic organisations the IMF, in particular, has continuedto be subject to strong criticisms from many NGOs, some of their concerns havegradually achieved greater recognition—although not necessarily greater influ-ence—within the organisation. For example, when discussions over reforms tothe 1996 HIPC Initiative were in full swing in 1999, the IMF and World Bankstaff submitted a joint report to their respective Boards that represent memberstates on alternative proposals for reforming the international sovereign debtregime that included a survey of the main positions of Jubilee 2000, Oxfam Inter-national, Eurodad, and many other groups such as the Vatican, Christian Aid, andthe Anglican Church.80 This falls well short of providing clear evidence that themajor NGOs involved with the debt campaign directly shaped policy debateswithin either the IMF or the World Bank. Nevertheless, the discussion of thevarious rationales for sovereign debt relief articulated by NGOs (such as thosebased on moral and social justice arguments), which were drawn from face-to-face consultations strongly encouraged by member state representativesat the IMF and the World Bank,81 does suggest a significant shift from past practice

76. Helleiner and Cameron, op. cit., p. 131; cf. Alexandra Homolar-Riechmann, “Loose Morals: TheFoundations of Neoconservativism”, Paper presented at the BISA United States Foreign PolicyWorking Group Conference, Institute for the Study of the Americas and London School of Economics,18–19 September 2008.

77. Gordon Brown, “Smash the Chains”, The Guardian (21 December 1999), available:,www.guardian.co.uk/world/1999/dec/21/debtrelief.development. (accessed 10 September 2008).

78. Cf. Helleiner and Cameron, op. cit., p. 133; Dixon and Williams, op. cit., p. 161.

79. Beeson and Broome, op. cit.

80. IMF Archives, HIPC Initiative—Perspectives on the Current Framework and Options for Change,EBS/99/52 (Washington, DC: IMF, 1999).

81. IMF Archives, Chairman’s Summing Up—Meeting of the World Bank’s Committee of the Whole onHeavily Indebted Poor Countries (HIPC) Initiative—Perspectives on the Current Framework and Options for

Change, EBS/99/58 (Washington, DC: IMF, 1999), p. 1.

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where the debt policy agenda was negotiated behind closed doors between theIMF and World Bank staff and state representatives.

The third condition that enabled the NGO debt campaign to have a significantimpact upon the evolution of the international sovereign debt regime was theability of different NGOs, despite pursuing a range of political agendas, to co-operate and increasingly to co-ordinate their activities to maximise their publicimpact. Like states, NGOs also face a collective-action problem when they holdvarying preferences over political goals. However, when a broad degree of con-sensus over strategic goals can be achieved—even if the principled beliefs thatmotivate the advancement of these goals vary—NGOs can be expected toachieve a stronger degree of influence over international political and economicchange.82 High-profile celebrity support combined with events such as theBirmingham G8 summit in 1998, where NGOs organised a human chain madeup of over 50,000 people to encircle the summit, enabled the coalitions of NGOsfocused on achieving more generous official debt relief to attract widespreadpublic support all over the world, ensuring that the debt problem remained alive issue on the political agenda for G8 governments.83

While the changes to the international sovereign debt regime during the last20 years are often cited as unambiguous evidence of the increased importanceof civil society actors in international affairs, it is important to note that theirimpact in this case must be conceived in terms of their direct and indirect influ-ence over the actions of states. As Daniel Drezner has argued, the processthrough which changes in international regimes are negotiated may sometimesbe shaped by non-state actors such as NGOs, but concrete political changes thatresult in the design of new policy regimes at the global level are finalisedthrough agreements struck among major states.84 For instance, the incrementalcustomisation of the international sovereign debt regime for low-incomecountries also highlights the importance of informal fora of international econ-omic governance involving major states—relative to formal international econ-omic organisations such as the IMF and the World Bank—as crucial drivers ofchange in the global political economy. The key informal forum in the debt casewas the G8, which pushed the IMF and the World Bank towards understandingdebt issues as a common problem faced by a set of low-income countriesduring the mid-1990s.85 The G8 also endorsed the final shape of the HIPCand Enhanced HIPC Initiatives,86 and pushed the international economic organ-isations to adopt 100% cancellation of multilateral debts (at least in principle)despite their strong opposition.87 In the case of the IMF, which has continuedto remain reluctant to support proposals for the extension of debt relief,88 itis clear that winning support among G8 members was crucial forthe calls from NGOs for multilateral debt relief to gain traction within the

82. Daniel W. Drezner, All Politics is Global: Explaining International Regulatory Regimes (Princeton:Princeton University Press, 2007), pp. 70–71.

83. Busby, op. cit., p. 257.

84. Drezner, op. cit., pp. 88, 204.

85. Bokkerink and van Hees, op. cit., p. 325.

86. Sieglinde Gstohl, “Governance through Governance Networks: The G8 and InternationalOrganizations”, Review of International Organizations, Vol. 2, No. 1 (2007), p. 15.

87. Helleiner and Cameron, op. cit.; IMF and World Bank Staffs, op. cit.

88. Callaghy, op. cit., p. 34.



organisation.89 G8 governments, together with other Paris Club members, havealso stumped up most of the financing for debt relief that has been made avail-able, with non-Paris Club creditors less willing to support debt relief throughthe HIPC Initiative and Enhanced HIPC Initiative.90

The campaign by NGOs to influence change in the international sovereign debtregime suggests that NGOs matter in the study of IPE for three principal reasons.First, through the exercise of moral authority NGOs can potentially shape howpolitical issues are defined, both through their public campaigning and throughtheir efforts to lobby national policy makers and officials in international economicorganisations. Second, NGOs can potentially influence how policy responses toparticular issues are crafted, which may involve influencing both the scope ofpolicy change and the process through which change is implemented (such aswhether an issue will be dealt with on an ad hoc basis or through new multilateralrules). Finally, the process of changing the international sovereign debt regimefor HIPCs suggests that large professional NGOs are engaged in a symbioticrelationship with IOs and states that could potentially transform the politicalenvironment within which international economic regimes are constructed aswell as influencing how they evolve.91 While the incremental moves towardsgreater inclusion of NGOs within the formal regulatory processes of internationaleconomic organisations might not necessarily enhance the legitimacy of insti-tutions such as the IMF, the World Bank, or the World Trade Organization, thismight nonetheless suggest that co-ordinated and sustained opposition fromNGOs risks doing severe damage to their reputations and undermining theirsources of legitimacy.

Conclusion

From the emergence of the debt crisis in the 1980s the debate over alternativepolicy solutions has often been framed in moral language, but the terms of thedebate have shifted significantly during the past two decades. The symbolicsuccess of the debt campaign waged by NGOs during the last 15 years can beseen in the gradual shift in terminology from the discussion of alternativepolicy solutions to low-income countries’ high debt levels in terms of the moralhazard problem that debt relief might pose to the stability of the internationalfinancial system, to a greater focus on the problem of moral fairness in theglobal political economy. Yet while the co-ordinated efforts of NGOs contributedto the adoption of major changes in the principles underpinning the internationalsovereign debt regime for HIPCs, significant gaps remain between the headline-grabbing initiatives that have been announced by official bilateral and multilateralcreditors and the full implementation of the benefits of debt relief initiatives foreligible countries.

Moral victories, while important in their own right as potential impulses forfuture social action, may often prove difficult to translate into substantive politicaland economic change in practice. The broader lessons of this article for under-standing the sources of change in international economic regimes are threefold.

89. Yanacopulos, op. cit., pp. 722–724.

90. IMF Archives, Enhanced Initiative for Heavily-indebted Poor Countries—Review of Implementation,EBS/00/166 (Washington, DC: IMF, 2000), pp. 15–16.

91. Cf. Reimann, op. cit.; Martens, op. cit.

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First, the case of the debt campaign suggests there is a need for IPE scholars to payfurther attention to exploring the strategic use of frames by actors who do not haverecourse to more coercive forms of influence. A key part of the NGO campaign toeffect a change in the principles of the international sovereign debt regime was thecredible use of evidence-based arguments against the claims in the early 1990s ofthe World Bank and the IMF that a debt crisis in a large group of low-incomecountries did not exist. But the key to assembling the broad transnational coalitionthat rallied behind the debt relief cause was the success of NGOs such as Jubilee2000 and Oxfam International in reframing sovereign debt problems in terms of amoral imperative for wealthy OECD governments to assist the poorest societies inthe world, with the articulation of “debt relief” as an important part of the sol-ution. This played an important role in the effort to discredit the traditional econ-omic argument that non-concessional debt rescheduling was a more appropriateresponse for distressed economies than debt relief, which, it was argued, wouldcreate a moral hazard problem and contribute to international financial instability.While other scholars have suggested that we should expect to find transnationaladvocacy networks achieving a stronger influence on policy elites when theycampaign on “global issues with a visible moral dimension”,92 the importanceof the role of NGOs in advocating changes to the international sovereign debtregime is that NGOs were partly responsible for transforming the politicalcontext in which debt problems were understood. That is, while the sovereigndebt problems of low-income countries gradually evolved into a political debatethat incorporated a strong moral dimension, this had previously been a set ofissues that tended to be discussed only in economic and strategic terms amongnational and international policy elites. By translating a set of technical conceptsand public policy problems into moral language and achieving a significantdegree of success in persuading other actors to buy into this reinterpretation,NGOs were able to introduce—or at least more strongly emphasise—a moraldimension to the issue of low-income countries’ high levels of sovereign debt.

The second lesson that this article suggests for the study of political and econ-omic change is the importance of exploring how a specific set of contingent cir-cumstances may allow non-state actors successfully to exert influence on publicdecision-making processes. The impact of the NGO debt campaign during the1990s and early 2000s was partly enabled by a window of opportunity for chan-ging the international sovereign debt regime created by a leadership change atthe World Bank, as well as changes in government in the United Kingdom andthe United States where, for very different reasons, political leaders madegreater debt relief for heavily indebted poor countries a foreign policy priority.This provided an important opening for NGOs to push for changes to the inter-national sovereign debt regime. In addition, the damage done to the IMF’s repu-tation during the Asian financial crisis may have made it more difficult for the IMFto resist the expansion of debt relief beyond the terms agreed for the 1996 HIPCInitiative. The confluence of a number of favourable conditions in this casesuggests that public campaigns run by NGO coalitions on different issues in thefuture may fare less well. It is also doubtful whether it would be possible to

92. Cenap Cakmak, “Transnational Activism in World Politics and Effectiveness of a LooselyOrganised Principled Global Network: The Case of the NGO Coalition for an International CriminalCourt”, International Journal of Human Rights, Vol. 12, No. 3 (2008), p. 388.



mobilise such a wide range of supporters—who often pursued different politicalagendas—to co-operate to push for change on other issues. In this respect, thepublic campaign for debt relief enabled numerous groups to co-operate tosupport a common goal for very different reasons (such as the different under-lying rationale of economic conservatives compared with religious actors in theUnited States).

The third and final broader lesson this article suggests for the study of thesources of change in international economic regimes is that while NGOs havebecome more prominent players in international affairs in recent years, specifi-cally as critics of the policies of the international economic organisations, theirimpact on formal policy change is likely to continue to depend on the extent towhich they are able to influence the political agendas of major states. This ishardly surprising, as international organisations such as the IMF and the WorldBank remain at heart state-driven agencies, despite exhibiting a significantdegree of autonomy. However, because for the most part their influence is chan-nelled through states, this does suggest that recent claims that NGOs are at thevanguard of an emergent global civil society that can help to generate transna-tional democracy without accessing formal decision-making structures shouldbe treated with scepticism.

78 Andre Broome


When do NGOs Matter? Activist Organisations as a Source of Change in the International Debt Regime

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