Public Participation and the Private Sector: The Role of Multilateral Development Banks in the Evolution of International Legal Standards

Abstract

This paper systematically describes the public participation standards currently applied by multilateral development banks (MDBs) to the private sector and seeks to identify emerging trends and areas for further development or improvement. It begins by outlining the developing body of international law on public participation and its relationship to good development practice. Thereafter, the paper describes the two principle models for standards attached to MDB funding and assistance to the private sector: (1) the World Bank policies applicable to the public sector; and (2) the International Finance Corporation (IFC) standards that are applicable to the private sector and how these are utilized in each of the principal regional MDBs: Inter-American Development Bank (IDB); the African Development Bank (AfDB); the Asian Development Bank (AsDB); and the European Bank for Reconstruction and Development (EBRD). Each sub-section devoted to a regional MDB focuses on the substantive public participation standards with which private sector funding recipients must comply; and on the oversight and review mechanisms by which the MDB promotes and enforces compliance with these policies. The final part of the paper argues that the MDBs have taken a critical first step in extending public participation requirements to the private sector and are making important progress in enforcing such requirements. It urges the MDBs to recognize that they are, in fact, becoming creators of evolving international standards and norms or soft law. Consequently, in developing and interpreting their policies and standards, they should pay closer attention to other, more formal sources of international and domestic law on public participation.