Dear Robin,

Thanks to Robin for the interesting paper on legislator oversight of
the BWIs.The global democratic deficit is all the more problematic as
the BWIs are also financially unaccountable, even allowed to benefit
financially from their own negligence. These two systemic problems
compound. May I use this opportunity to inform you that a paper of
mine on how to make IFIs financially accountable to protect the poor
has just been published by the Carnegie Council on Ethics &
International Affairs
(http://www.carnegiecouncil.org/viewMedia.php/prmID/5002) The
contents - for those interested, and my apologies to those who are
not:

ABSTRACT
International Financial Institutions and Financial Accountability

While useful proposals to reform International Financial Institutions
(IFIs) have been widely discussed, the lack of meaningful financial
accountability has received little attention. Considering the
substantial damage done by IFIs this is surprising both from an
ethical and an economist's point of view. In a market economy anyone
must face the economic consequences of their actions and decisions.
If consultants give advice negligently or without obeying minimal
professional standards, they have to pay compensation for the damage
they have caused. National liability and tort laws serve the purpose
of compensating those suffering unlawful damages and of deterring
such behavior.

By contrast, tortious damage caused by IFIs must be paid by their
borrowers, including many of the world's poorest people. IFIs may
even gain financially from their own negligence by extending new
loans necessary to repair damages done by their prior loans. One
failed adjustment program calls for the next. This mechanism makes
IFI-flops generate IFI-jobs and additional income. This perverted
incentive system rewarding errors, negligence, and even violations of
the very constitutions of IFIs is absolutely at odds with the
principles on which Western market economies rest. It must be brought
to an end. This paper presents the idea of financial accountability,
showing how easily reforms making IFIs financially accountable could
be implemented. Moreover, embracing financial accountability would
bring IFI-operations closer to the intentions of their founders, who
wanted IFIs subject to the basic legal and economic concepts of
financial accountability not exempt from it. The market mechanism and
its beneficial incentive system must finally be brought to IFIs.

Best regards/Sincerely

Kunibert Raffer