James Raymond Vreeland (Georgetown University)Co-author: Axel Dreher (University of Heidelberg)

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The Political Economy of the United Nations Security

Council:Money & Influence

Collaboration

Cooperation & Change

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IMF World Bank

The UN Security Council

IMF/WB project in Ghana

The question:

• Do temporary members of the UNSC receive financial perks?

Yes.

Why?

• The United States and other powerful countries seek additional influence over the UNSC.

Plan

• Overview of the book project

• What is the UN Security Council?

• Why seek influence over the UNSC?

• Evidence– Anecdotes– Large-n

The Political Economy of the United Nations Security

Council:Money and Influence

• Ch1: Money and Politics on the International Stage

• Ch2: A Theory of Trading UNSC Votes for Aid

• Ch3: Examples of Punishments, Threats, and Rewards

• Ch4: Who Wins Election to Represent the World?

• Ch5: Statistical Evidence

• Ch6: Consequences

• Ch7: Reform?

What is the UNSC(United Nations Security Council)?

What is the UNSC?

5 permanent members with veto power

10 elected members (2 year term - limited)Nominated by REGIONAL caucus, elected by GENERAL ASSEMBLY

•Resolutions (open ballot) require 9 votes

•UNSC votes on

–UN military action against aggressors–Economic sanctions & arms embargoes 10

3 2 2 1 2

Why bribe/reward votes?

• Elected members of the UNSC potentially will vote on matters of extreme international importance

• Voting power?

• Legitimacy

– There is a premium for getting (near) unanimous votes to win domestic public support (Prof. Voeten)

– Symbolic

– Informational 11

Rally around the flag!

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US President

Typical US voter

Conservative UNSC member

US President public support before and after military action – with and without UNSC authorization

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• The goal of the donor countries:

– Get countries under a program – in case important issues come up.

• Godfather-esque: – “Some day, and that day may never come, I'll call upon you

to do a service for me. But uh, until that day, accept this justice as a gift on my daughter’s wedding day.”

• http://www.youtube.com/watch?v=8Bz9iXernY4&feature=fvw

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Evidence

• Some anecdotes***

• Systematic evidence

Gulf War Examples

• Zimbabwe – UNSC member 1991-92

– 1992 – 1st IMF arrangement in a decade

– Votes for 2 resolutions against Iraq

– Then abstains…

– And Zimbabwe was threatened with new IMF conditions

– Subsequently votes for 11 resolutions condemning Iraq.

Gulf War Examples

• Zaire in early 1991: PRESIDENT of UNSC

– Request emergency UNSC meeting

– Inconvenient for:

–“Zaire was offered undisclosed ‘debt forgiveness’ and military equipment in return for silencing the Security Council when the attack was under way.”

Obama – Ondimba

• Spring 2011: President Obama & senior State Department officials meet with President Ondimba of Gabon

• Why would the United States grant Gabon (pop. 1.5 mil) a high-level meeting?

• Gabon supported

– Res. 1970 (26 February 2011): Imposed sanctions on Gaddafi’s regime

– Res. 1973 (17 March 2011): Established a no-fly zone over Libya & provided the legal basis for the military intervention in the Libyan Civil War.

– Res. 1973 was crucial & passed with only ten votes– http://www.npr.org/2011/06/14/137171315/for-u-s-dealing-with-dictators-is-not-unusual

Sec. Clinton

• Togo elected to the UNSC fall 2011 to serve 2012-13

• Sec. Clinton visits Togo

• Why?

– “No Secretary of State had ever been to Togo before.

– “Togo happens to be on the UN Security Council.

– “Going there, making the personal investment, has a real strategic purpose.

– “When... you look at the voting dynamics in key international institutions, you start to understand the value of paying attention to these places.” – Sec. Clinton

Counter examples?

Gulf War Examples

• Cuba – UNSC member 1990-1

– Consistently opposed Iraq resolutions

– IMF arrangement?

– Left the IMF in 1964 – not an IMF member

– (Why? Claimed the IMF was a tool of the US)

Gulf War Examples

• Yemen – UNSC member 1990-1

– Voted against Desert Storm

– U.S. representative was overheard declaring to the Yemeni ambassador that it was

“the most expensive vote you have ever cast.”

– The US cut hundreds of millions of dollars in aid

– (No IMF arrangement)

A more historical example?

• Tanzania

– 1961-1974 no IMF, no UNSC

– 1975

• UNSC member

• First IMF arrangement – exceedingly weak conditionality

What does it mean“to explain”?

Nomothetic (law-like)vs. Idiographic (descriptive) approaches

• Law-like statement:

– Whenever & wherever X occurs, X is in a certain relation to Y.

• Descriptive statement:

– Specifies spatio-temporal locations and makes all subsequent propositions relative to these parameters.

Description (idiographic):

• Julius Nyerere was the first President of Tanzania from the country’s founding in 1961 until 1985 (his retirement )

• 1975

– UNSC member

– First IMF arrangement – exceedingly weak conditionality

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Law-like (nomothetic):

• UNSC members are more likely to receive IMF loans with light conditionality

• Other examples: – A particle to which no force is applied will move with constant

velocity in a straight line.

– Every particle of matter in the universe attracts every other particle with a force that is directly proportional to the product of the masses of the particles and inversely proportional to the square of the distance between them.

– E=mc2

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We can easily apply law-like statements to particular cases…

• A particle to which no force was applied in Brazil during the 1960s moved in a straight line with constant velocity.

• Particles of matter in Argentina during the 1990s attracted other particles in Mercosur and the rest of the world with forces directly proportional to the product of the masses of the particles and inversely proportional to the square of the distance between them.

• In France, E equaled mc2 after the collapse of the Bretton Woods system.

True - but redundant - statements.

But some would judge the following “improper” because people don’t behave in a universal fashion the way “particles” do.

– Import substitution industrialization retards economic development in the long-run.

– Fixed exchange rates may fail as credible commitments leading to economic catastrophe.

– The Trilemma.

We have taken a “nomothetic” approach to IPE

• Risky!

– We may have made false generalizations

• Alternative:

• History of international political economy

– Descriptive

– Less risky

– Can lead to the view that every outcome is UNIQUE

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According to the approach of this class,

What is it to explain?• To state the conditions under which a

phenomenon always or usually takes place (perhaps probabilistically)

• The BRIDGE– The BRIDGE between historical observations

and general theory is the substitution of variables for proper names and dates

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• Instead of: – Julius Nyerere, the first President of

Tanzania, saw his country elected to serve on the UNSC in 1975 and entered into an IMF arrangement with light conditions that year.

• We have:– UNSC members are more likely to receive

IMF loans with light conditionality

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IMF reply in the Washington Post (November 1, 2006):

• An IMF spokesman said “the [Tanzania] evidence is anecdotal and circumstantial.”

• To convince people, we need

– many more anecdotes

– statistical evidence (it’s not just luck)

Descriptive data

(non-UNSC: n=5719) (UNSC: n=339)

Enter the IMF & the World Bank

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Key points about the IMF & World Bank

• Involved with developing countries through “programs”: loans+conditions.

• Influence over decisions pegged to economic size.

• Growing evidence that the major shareholders use their influence for political reasons (e.g. Stone, Reynaud, Momani, Kilby).

• Especially when they agree (Copelovitch). 42

Why use IFIs to influence the UNSC?

– Political benefits (for both actors)• “DIRTY WORK” (Vaubel)

– Leverage benefits • Conditionality & loan disbursements

– Cost benefits

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Figure 1: Participation in IMF programs by non-permanent UN Security Council Membership over time

0%

10%

20%

30%

40%

50%

Non-members

Members Other years 4 yearsbefore

3 yearsbefore

2 yearsbefore

1 year before 1st yearmember

2nd yearmember

1 year after 2 years after

mean=0.28 mean=0.34 mean=0.28 mean=0.28 mean=0.31 mean=0.33 mean=0.32 mean=0.35 mean=0.34 mean=0.30 mean=0.28

st.dev.=0.45 st.dev.=0.48 st.dev.=0.45 st.dev.=0.45 st.dev.=0.46 st.dev.=0.47 st.dev.=0.47 st.dev.=0.48 st.dev.=0.48 st.dev.=0.46 st.dev.=0.45

(n=6684) (n=462) (n=5405) (n=178) (n=196) (n=215) (n=236) (n=236) (n=225) (n=234) (n=221)

UN Security Council Membership Status

% o

f ob

s. p

arti

cipa

ting

in I

MF

pro

gram

s

The horizontal line shows the average IMF participation rate across our entire sample. The dots reflect the results where only low and lower-middle income countries are included.

World Bank evidence

“It is true that during the Cold War years aid was politically motivated.”

“Now however, aid is being delivered to countries most in need and to those who show they are determined to use it well.”

(World Bank, FAQ, www.worldbank.org)

Average # of World Bank projects by UNSC membership

0.0

0.5

1.0

1.5

2.0

2.5

avg=1.29

std=1.95

avg=2.13

std=2.93

avg=1.28 avg=1.30

std=1.96 std=1.93

avg=2.15 avg=2.10

std=2.96 std=2.92

avg=2.06 avg=2.19

std=2.75 std=3.11

n=176 n=181

Non-

n=5333 n=357

member Member

Total sample

avg=1.29

std=1.95

n=5333

Non-member

1st.yearmember

2nd yearmember

Over time

n=2638 n=183 n=2695 n=174

Non-member

Member Non-member

Member

During the cold war After the cold war

If politics mattered during the Cold War, but not after,this bar should be above the line,and this one should be at/below the line…UNSC members continue to get

more World Bank programs

Is this a US-thing?

• Regional Organizations

• Regional Hegemons

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Asian Development Bank

Daniel Yew Mao Lim, Class of 2011

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African Development Bank

  Pre-1982 1982 and onward:

UNSC Member -0.104 1.717***(0.06) (3.55)

Pariah state 6.193*** 0.904(4.43) (0.48)

War0.072 -1.519**(0.04) (2.05)

ln(GDP per capita, PPP) 6.582** 1.368(2.14) (0.90)

Political regime-0.043 0.026(0.29) (0.44)

Number of observations 355 1,338

R-squared 0.39 0.07

Notes: All regressions include country and year fixed-effects and regional quartics (for North Africa and Africa South of the Sahara). Numbers in parentheses are the absolute values of t-statistics.

Summary Observation by Russian Student

• Bribes – no surprise– Trade money for votes

• But the US & allies bribe…– with a loan – must be repaid!

• Impressive!

Who is surprised?

So what?

• Reform debate focuses on:

– NUMBER of representatives

• elected

• permanent

• No discussion of accountability

Accountability, the UNSC,& the Paradox of Stability

Criteria are too high!

Criteria are too low!

Suggested reforms:

–Do away with term limits

–Let regions elect

DISCUSSION

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DISCUSSION: Will China play the foreign aid

game?• How China might use its powerful

position in international politics to try to obtain its foreign policy goals?

– Dalai Lama?

– Caribbean recognition of PRC vs. ROC?

– Chiang Mai alternative conditionality?

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Thank youWE ARE GLOBAL GEORGETOWN!

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Gulf War Examples

• Ecuador – UNSC member 1991-92– IMF arrangement in 1991– Of course Ecuador is a regular IMF customer: 1961,

1962, 1963, 1964, 1965, 1966, 1969, 1970, 1972, 1983, 1985, 1986, 1988, 1991, 1994, 2000

– Voted for all but 2 Iraq resolutions

Note Ecuador’s IMF participation pattern above• Countries participate in IMF programs about 25% of the

time (including ALL countries).• Typical pattern: 5 years in, 5 years out, 5 years in, etc…

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Cuba before & after 1961

0.00

0.10

0.20

0.30

0.40

0.50

0.60

Non-member Member Non-member Member

n=11 n=4 n=29 n=1

Cuba pre-1961 Cuba post-1961

IMF

par

tici

pat

ion

Repùblica de Nicaragua, América Central

0.00

0.25

0.50

0.75

1.00

Non-member Member Non-member Member

n=27 n=2 n=9 n=2

Nicaragua 1951-1979 Nicaragua 1980-1990

IMF

par

tici

pat

ion

0.000.100.200.300.400.500.600.700.800.901.00

Non-member UNSC Member

n=27 n=7

Brazil 1970-2004

IMF

Par

tici

pat

ion

Defect

DisburseCutDisburseCut

Member: a

Donor: v–a

Member: 0

Donor: v-r

Member: b

Donor: 0

Member: b+a

Donor: –a

Comply

Donor

Member

Request aidNo request

Nature reveals local politics b

Offer aid, set a>0No offer

Vote against Vote with

Member: b

Donor: 0

Member: 0

Donor: v

MemberMember

Donor Donor

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Is this a US-thing?

• Regional Organizations

• Regional Hegemons

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Figure 3: Participation in IMF programsby UN Security Council Membership and Region

0.00

0.10

0.20

0.30

0.40

0.50

0.60N

on-

mem

ber

Mem

ber

Non

-m

embe

r

Mem

ber

Non

-m

embe

r

Mem

ber

Non

-m

embe

r

Mem

ber

Non

-m

embe

r

Mem

ber

Non

-m

embe

r

Mem

ber

n=1669 n=95 n=1119 n=47 n=1254 n=100 n=591 n=36 n=814 n=51 n=998 n=108

Africa Asia & S.Pacific

LA & Carib. E. Europe Middle East &N. Africa

IndustrializedCountries

UN Security Council Membership Status and Region

% o

f obs

. par

ticip

atin

g in

IMF

pro

gram

s

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Implications for governance reform of the IMF:• Q # 1: Is this a bad thing?

• Q # 2: Is it in the US interest to change things?

• Perhaps not – Short-run political gains.

• Long-run economic development?

• Elected to the UNSC 6 timesElected to the UNSC 6 times

• 15 IMF arrangements since 195815 IMF arrangements since 1958

• 32 out of 48 years (66% of the time)32 out of 48 years (66% of the time) 71

In the meantime:

• The actual governance reform of the IMF

• Increase the voting power of:– China, South Korea, Brazil, Mexico and Turkey

• How will this address the political manipulation of the IMF?

• It won’t.“It is the correct thing to do, but probably won’t

make much difference.”[personal conversation with Pres. Henrique Cardoso, Brazil &

Pres. Ernesto Zedillo, Mexico] 72