Multilateralism in Multilateral Institutions: The Case of the IMF and OFID Aid Policies to the Philippines

Abstract

Multilateralism, in principle, ensures that no single state or a group of states shall be able to use the arrangement, or in this case, the institution, to forward its own interests, may they be political or economic. This is done through the diffusion of decision-making power among all members states. However, there is instances when the multilateral institutions themselves make it possible for some of its member states to dominate within their organizational structures. Furthermore, this domination by some states are institutionalized within the institutions due to the employment of institutional norms and devices that aim to introduce efficiency in the decision making process. In the case of aid giving all scholars agree that it is as much as an instrument of foreign policy as it is a benevolent act by rich countries. There is, thus, a great potential for aid to be used as a device to advance the donor states interests. The International Monetary Fund and the OPEC Fund for International Development, as multilateral and institutions, claim to do away with this problem when providing assistance to their clients or beneficiaries. This study aims to determine how these institutions promote or hinder multilateralism within their own memberships. A review of state interests of the most powerful member of the two institutions as seen in the context of their economic structures, political orientation and their perceived roles in the achievement of development by the less developed countries (LDCs) reveals that both institutions top members share similar conceptions of politics, economics, and the interaction of politics and economics (political economy). Upon scrutiny of institutional devices utilized by the IMF, it is found that generalized principles of conduct within the institutions, such as voting rules, rules of representation and delegation and the adoption of consensus building actually permit its top members to exert undue influence in the decision making process within the institution. The results of analysis of IMF aid policies to the Philippines support this observation. The OFID institutional mechanism, despite its seemingly equitable distribution of power among its members, essentially exhibits similar proclivity to allow its to member to sway OFID decisions in the course of decision making. However, an examination of OFID aid policies to the Philippines is not sufficient to unequivocally conclude that this proclivity plays a big part in the process of crafting and implementing these policies. Finally, a conclusion can be drawn from the lessons of the IMF and the OFID Multilateral aid institutions generally find it acceptable to allot larger shares of power to their top-contributing members. It depends on the membership size and the institutional mandate whether or not the allotment would be consider inequitable or unacceptable by the other members.