Monday, July 27, 2009

Law, the World Bank, and the Politics of the Surveillance Culture

As anyone who has followed the impact of US New and World Report on universities will testify, we live in a surveillance culture in which statistical indicators reflecting policy choices are shaping behavior of institutions and individuals. Often these indicators have a quasi-scientific quality and give substantial power to technocratic elites. But occasionally they become the target of political contestation. The saga of the World Bank's "Employing Workers Indicator" (EWI) illustrates the potential of contestation over a legal indicator.

The EWI is part of the overall Doing Business project. Doing Business ranks countries in terms of what it considers to be a favorable business climate. EWI has a strong deregulatory slant, giving the highest rating to countries with the lowest level of job protection for workers. As a result, borrowers may come under pressure to deregulate their labor markets.

Doing Business has been criticized by academics and unions for some time. Alvaro Santos, Kevin Davis and others have published critical analyzes of the way data is collected, indicators developed, and policy conclusions drawn. The International Trade Union Conference (ITUC) has pressed the Bank and the IMF to change the EWI to make it follow ILO standards more closely. The AFL-CIO has supported this effort and sought Congressional support for the effort.

Congressman Barney Frank has been an outspoken critic of the EWI for some time and has been putting pressure on the Bank to change the indicator. He has held hearings and it is reported he has threatened to condition future US funds for the Bank on reform of EWI. In April, the Bank announced that it is no longer using the EWI and that it would develop a new approach using ILO standards. It stated that the EWI would no longer be used for policy advice or to evaluate a country's development strategy. This was greeted warmly by ITUC. (The Bank's announcement is at ITUC's reaction is at

That is not the end of the story. The struggle continues as the Bank develops a new version of the EWI. It looks like the Congress is not satisfied that the issue has been resolved satisfactorily. In June, it added a section to the House Supplemental Appropriations Bill that would require the US Executive Directors at The Bank to pressure for suspension of the current EWI and revision of the indicators in a way that "fairly represent the value of internationally recognized worker's rights".

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