Economic Development and UN Reform

There are many reasons for embarking upon such an endeavor. They range from the need to modernize institutions set up about half a century ago to the need to address the acute disparities afflicting most of the developing world and to meet the challenges imposed by an increasingly regulated global trade and financial system.

I believe that the overriding motive to revise the multilateral architecture for economic development is the need to improve its contribution to the fight against poverty and the quest for global security. Nonetheless, I consider throughout the book many of the other arguments. For that purpose I have organized the discussion around two major axes: that of the ‘institutional’ aspects covered by most of the UN reform proposals (chapters 2 and 3) and that of the ‘programmatic’ challenges to be addressed by the system to improve its effectiveness (chapters 4 and 5). This is, of course, an arbitrary distinction introduced to facilitate the analysis and to simplify the key message of the book: that more attention should be given to the programmatic aspects of the reform efforts undertaken at the UN system.

The ‘institutional’ aspects revolve mainly around bureaucratic, administrative and financial arrangements to improve coherence at the system level, including operations in the field. The ‘programmatic’ challenges relate to the need to align and harmonize the normative and operational functions of the system in the field of economic development so as to maximize its contribution to the collective goals of the UN established by its Member States at the major UN conferences and summits.

Within this "programmatic" dimension of UN reform, I address (particulary in chapter 5) a number of issues related to how the theory and practice of of development economics have evolved since World War II are addressed. The knowledge and information available half a century ago, which laid the foundations for the system’s current economic development architecture, remains relevant and valid to categorize the problems confronted by developing countries. However, the evolution of economic thinking, the availability of new tools of economic analysis and the new global trade and financial agreements have considerably influenced the practice of development economics, demanding the adaptation of the UN economic development functions to these new realities.

One way or another, all reform proposals, although focused on managerial changes, administrative measures or institutional arrangements, contained elements of a programmatic nature. Moreover, these programmatic elements gradually grew in importance over the years, particularly from the mid-1990s onwards — not surprisingly, after the fall of the Berlin wall and the easing of the East–West tensions.

Now the time has come for this gradual and slow shift in accent from ‘institutional’ to ‘programmatic’ arguments in UN reform proposals to be carried forward and sped up, placing a number of substantive issues at the core of the reform process with a view to strengthening the link between development, peace and security and ensuring a positive reciprocal interaction between them.

This book argues that thanks to the early efforts devoted to the so-called ‘institutional’ arguments, circumstances are now ripe to place the ‘programmatic’ issues at the core of the reform efforts of the multilateral system, in particular with regard to the revitalization of the UN’s economic development functions.

Let me be explicit from the outset. This is a very humble proposal, which does not intend to rediscover fire or reinvent the wheel. Quite the contrary, it attempts to devise a practical approach that takes due note of the constraints affecting a process of change in a context as complex as that of the UN.

For this reason the book takes stock of previous reform initiatives at the UN related to economic development. Chapter 3 is entirely devoted to reviewing a number of such proposals. I consider this exercise very important to understand the dynamics of change at the UN and to identify the roots of success or failure in attempts to transform the system.

Some of the reform proposals presented since the inception of the UN marked special moments or left a visible trace, even if their recommendations were not accepted or implemented. Such was the case with the Jackson study (1969), the Gardener Report (1975), the Bertrand report (1985), the Childers-Urquhart Proposal (1985), the South Commission (1990), the Nordic Project (1991), the Commission of Global Governance (1994), the Independent Working Group (1995), the Nordic Project II and the European Union (EU) proposals (1997). Additionally the last two Secretaries-General, Boutros-Ghali (1992) and Kofi Annan (1997 and 2002) felt the need to outline their own reform programmes. As one can see by just looking at the dates, the process of change at the UN has been accelerating over the last decade.

Almost all these reform proposals (that of the South Commission being a notable exception) paid prominent attention to administrative, financial and bureaucratic arrangements seeking to increase the coherence, efficiency and effectiveness of the UN economic development functions. This they did by advocating:

1. A single development authority (Jackson report 1969, Gardener report 1975, Bertrand report 1985),
2. An Economic Security Council, basically by reforming the Economic and Social Council, ECOSOC (Bertrand report 1985, Nordic Project 1991, Independent Working Group 1995), or
3. A single department for economic and social issues (the Nordic Project 1991, later implemented by Secretary-General Annan).

Most of these proposals looked at the system either from the outside in or, inside, from the top down.

The reform proposal put forward here can claim originality in at least two aspects. In the first place it gives less weight to bureaucratic arrangements and more to organizing the system’s activities around a set of substantive economic development topics or issues in the search for coherence, efficiency and effectiveness. Examples of those topics are capacity-building for private-sector development (PSD), policies for the rural and informal sectors of developing-country economies; technology transfer and diffusion; trade capacity building; and energy and the environment — each and all of which topics call for more policy coherence and operational effectiveness of the UN’s economic development functions. In the second it adopts a bottom-up approach, drawing from the actual experience of reform of a particular piece of the UN’s economic development machinery.

From the perspective of the present proposal, there is no doubt that renewed administrative, financial and bureaucratic arrangements are needed to achieve a proper management of resources. Nevertheless, their effectiveness in accomplishing better coordination, more coherence and improved efficiency will always be a function of the relevance and the quality of the substantive contributions these new arrangements are able to deliver — for example, in the field of economic development.

Without pretending to offer a definitive answer, the proposal contained here seeks to promote a slight but significant conceptual shift by emphasizing that neither the establishment of a new body nor the creation of a new coordinating mechanism will suffice to enhance the relevance of the UN’s contribution to economic development unless and until a relevant set of substantive issues — selected through the proper political process, approached with a modern outlook and clustered around a clearly defined agenda — gives renewed focus and better guidance to the system’s normative and operational activities.

The inclusion of the United Nations Industrial Development Organization’s (UNIDO) experience as a case study in the second part of this book illustrates the sense and relevance of the bottom-up approach. UNIDO’s reform process has been successful and its results very encouraging.However, as we shall see, to maintain its pace and consolidate its achievements over the long run, the agency will have to address and overcome constraints on two fronts: its relationships with the other UN programmes, funds and agencies acting in the economic development field; and its field coverage and reach.

On both fronts, UNIDO can only advance if it can count on a blueprint of the way forward for the system as a whole. Such a thing exists with regard to field coverage: the agency is integrating at an accelerated pace into the Resident Coordinator system.However, no clear roadmap exists for the most relevant front: that of the substantive interventions in the fields mentioned above for UN programmes, funds and agencies.

The relevance of the bottom-up approach emerges from verifying that efficiency gains achieved through a successful reform process in a particular UN body can only go as far as system-wide efficiency allows. In the case study in the second part of the book, the ceiling for improvements in a particular agency is set by the system’s productivity in the field of economic development.

It is from this standpoint that I have developed the proposal presented in chapter 1. My interest in the subject — the way forward for multilateralism in the economic arena — does not come from a desire to perform a duty to which I was not called, such as revisiting the architecture of multilateral development. On the contrary, I felt almost compelled to get involved in it due to the stage reached by UNIDO’s own continuing reform process.

I sincerely hope that the ideas contained in this book will help to spark some interest and, above all, some additional actions to reorganize and reinvigorate the UN’s economic development functions. I do believe that this is a pivotal need of the development community in general and the developing countries in particular.

To conclude, I must confess that I had serious doubts about releasing a new book on UN reform. It is always difficult to produce a new work in an already overpopulated field. I did it only when I was able to convince myself that there was something new to say and some originality in the approach proposed, supported by an actual experience of success in reforming one of the UN bodies, which I wanted to share.

I have tried to explain in this introduction the reasons that convinced me. Whether my arguments are persuasive will certainly be judged by the readers. But what I believe undeniable in a system that counts more reform proposals than years of existence is that its Member States have certain unsatisfied expectations on how the system works or what it delivers. It is my desire to make a contribution to addressing those concerns.

Carlos Magariños

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