Financial Crises and Civil Society

Abstract:     
International financial law institutions struggle to confront financial crises effectively and flexibly, playing the role of both regulator and rescuer. At the same time, these institutions confront demands for greater legitimacy in light of the public policy implications of their actions. Some might argue that greater participation by civil society may serve to foster greater legitimacy by improving representativeness, transparency, accountability, and reasoned decision-making. But greater civil society access also has costs that can undermine both regulation and rescue efforts. I argue that we should not presume greater civil society participation lends greater legitimacy to international financial institutions. Rather, we should examine various types of civil society contributions at different points in the financial crisis and attempt to identify when and what kind of participation would be most helpful in light of the role played by the different institutions involved. As a general rule subject to certain caveats, civil society groups whose missions are closely related to interests affected by the institutions’ actions can make their greatest contribution to policy-setting institutions while civil society groups with a high degree of expertise should be more involved with institutions when they are performing detailed rule-making functions.

Number of Pages in PDF File: 52

Keywords: Financial Crisis, NGOs, Civil Society, IFIs, IMF, G20, Financial Regulation

Accepted Paper Series