Social Implications of Governance Related Conditionality Analysis of the roles of the WTO and the Bretton Woods Institutions in Fostering Stability and Long-Term Development

The Bretton Woods Institutions, and lately the World Trade Organisation, have all been accused of representing narrow Western economic interests and ignoring important elements of culture and local conditions in their policies towards the developing countries. In drafting ‘one-fit-for-all’ strategies and conditionalities they have paid little attention to existing governance structures and have ignored the social dimensions of their policies. The paper explores the underlying principles of governance and conditionality present in the operating mandates of these agents, and the observed effects on the long run development and social stability of affected countries. By drawing on historical references from different regions it investigates the relationship between conditionality clauses and the building of stable social, political and economic national structures. The role of the WTO as an international governance actor is analysed in the context of China’s recent accession into the world trading system; while the Bretton Woods Institutions are looked at through the lens of conditionality clauses imposed on transitioning African economies. The conclusion reached in both cases is that governance-related conditionality may erode local ownership of, and commitment to, necessary economic and political reforms. Furthermore, by supplanting local governance mechanisms, conditionalities threaten fragile social structures and may lead to social and political instability and conflict. RATYNSKA /Social Implications of Governance Related Conditionality