On The Reform Of The World Bank Decision-making Mechanism

Since the establishment of Bretton Woods Institutions, the World Bank has always been dominated by the few large share-holding nations, developing nations have long been excluded by the decision-making system of World Bank. With the advent of the economic globalization, the inadequacy of global economic governance has become more and more serious. Developing nations have been persistently requiring the reform of decision-making mechanism of World Bank to realize universal participation, democracy and the rule of law in the decision- making process of World Bank. Through a thorough investigation of the elements of decision-making mechanism of World Bank, this thesis evaluates the allocation of qtota and votes, Bretton Woods Formula, majority voting and the organizational structure of World Bank. This thesis elaborates different views concerning the reform of decision-making mechanism of World Bank, and discusses the collaboration between World Bank and UN in the light of economic globalization. Finally, several suggestions of the decision-making reform of World Bank are proposed. The Quota system is the unique decision-making mechanism of World Bank and IMF. The Quota in World Bank plays a core role in the decision-making process of World Bank. Member nations subscription of the Bank capital, the votes of member nations and the composition of Executive Board of World Bank are determined by the member quota in World Bank. In other words, Quota determines the share of capital, the votes and the right to elect Executive Directors. Chapter One would elaborate on the Quota system, capital subscription and votes. This chapter would illustrate the unfairness of Quota system, the unbalance between rights and obligations broughtabout by the decreased proportion of paid-in capital. This chapter would also express the strong request by developing nations for enhance the share of basic votes. Quota is calculated on the basis of a multiple-indicator formula, this approach of allocation of votes seems to be more objective and reasonable. The underlying formula for quota calculation in World Bank is the Bretton Woods Formula. however, whether the Bretton woods formula could help realize the constitutional mandate of World Bank is doubtful. For this regards, some related issues would be further elaborated on Chapter Two. Chapter three: the rules of voting-special majority voting. This chapter illustrates the general theory of voting rules, and the special majority voting rules of World Bank, this chapter also analyses the defect of the sense of meeting rules and the unduly control of the veto power to constitutional amendment by a few powerful sharing holding nations. Chapter four: the decision-making structure of World Bank, mainly deals with, the Executive Board and the Presidency of World Bank, their constitutional obligation, and potential influence in decision-making. Chapter five discusses the World Bank unduly dominance by the few political giants, the approaches of World Bank to realize universal participation, democracy and the rule of law in the decision- making process, this chapter focuses on the collaboration between World Bank and United Nations.