James Raymond Vreeland (Georgetown University) Co-author: Axel Dreher (University of Heidelberg) 1 The Political Economy of the United Nations Security Council: Money & Influence

Collaboration

Cooperation & Change 3

IMFWorld 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

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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15 US President Typical US voter Conservative UNSC member

US President public support before and after military action – with and without UNSC authorization 16

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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.” 20

Evidence Some anecdotes*** Systematic evidence

Gulf War Examples Zimbabwe – UNSC member –1992 – 1 st 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 (26 February 2011): Imposed sanctions on Gaddafi’s regime –Res (17 March 2011): Established a no-fly zone over Libya & provided the legal basis for the military intervention in the Libyan Civil War. –Res was crucial & passed with only ten votes –

Sec. Clinton Togo elected to the UNSC fall 2011 to serve 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 –C–Consistently opposed Iraq resolutions –I–IMF arrangement? –L–Left the IMF in 1964 – not an IMF member –(–(Why? Claimed the IMF was a tool of the US)

Yemen – UNSC member –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 – 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 32

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=mc 2 33

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 mc 2 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 36

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 37

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 38

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 41

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 43

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,

Average # of World Bank projects by UNSC membership avg=1.29 std=1.95 avg=2.13 std=2.93 avg=1.28avg=1.30 std=1.96std=1.93 avg=2.15avg=2.10 std=2.96std=2.92 avg=2.06avg=2.19 std=2.75std=3.11 n=176n=181 Non- n=5333n=357 member Member Total sample avg=1.29 std=1.95 n=5333 Non- member 1st.year member 2nd year member Over time n=2638n=183n=2695n=174 Non- member Member Non- member Member During the cold warAfter 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 48

Asian Development Bank Daniel Yew Mao Lim, Class of

African Development Bank Pre and onward: UNSC Member *** (0.06)(3.55) Pariah state 6.193***0.904 (4.43)(0.48) War ** (0.04)(2.05) ln(GDP per capita, PPP) 6.582**1.368 (2.14)(0.90) Political regime (0.29)(0.44) Number of observations3551,338 R-squared 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 56

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? 57

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Thank you WE ARE GLOBAL GEORGETOWN! 59

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Gulf War Examples Ecuador – UNSC member –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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Defect Disburse CutDisburseCut Member: a Donor: v–a Member: 0 Donor: v-r Member: b Donor: 0 Member: b+a Donor: –a Comply Donor Member Request aid No request Nature reveals local politics b Offer aid, set a>0No offer Vote againstVote with Member: b Donor: 0 Member: 0 Donor: v Member Donor 68

Is this a US-thing? Regional Organizations Regional Hegemons 69

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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 times Elected to the UNSC 6 times 15 IMF arrangements since IMF arrangements since 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