The Relationship Between National and International Law

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III. Competing Views of Development

There was a time when there was a general consensus that development was about economic growth17and that, at least analytically, it could be treated as a separate problem from other social, cultural and political issues in society. Today, however, that consensus has broken down. Now many people argue that development must be seen holistically, as an integrated process of change that involves economic, social, cultural, political and environmental dimensions.18The debate between these two positions has not been resolved and today the various competing views can be categorized into two contending approaches to development. We can term these two approaches ‘the traditional view’ and the ‘modern view’. Each of these idealized views of development leads to a different understanding of the contents of IDL.The differences between these views of development revolve around a few key issues. They relate to the role that the state should play in development, whether development is purely an economic process or should be viewed more holistically so that issues such as human rights are seen as an integral part of the development process, and to the relationship between international and national regulation.19More precisely they differ over whether the state should have the primary role in decision-making relating to development policy and projects. They also differ about the scope and nature of the responsibilities of the various actors involved in the planning, construction and operation of development projects and in the design and implementation of development policy. This means that a key area of disagreement is the definition of the appropriate legal and other relationships between the following four groups of actors in development policy making and projects:

• • • the state, which approves development projects and makes and implements development policy;
    • project sponsors, who may be the private sector, the public sector or the state itself;
    • project contractors, which includes those public and private sector institutions which provide the financing, goods and services for the design, construction and operation of development projects and for the implementation of development policies; and
  • • individuals and communities that are directly or indirectly affected, in both positive and negative ways by particular policies and projects and their representatives.

  The two views of development and the relationships they posit between these different groups of actors and the implications of each of these views for IDL are discussed below. As will be seen one’s conception of development influences one’s understanding of the content of IDL in four ways. First, it shapes one’s view of the substantive content of IDL. Second, it helps define one’s view of the relationship between the sovereign and the other actors in the development process. Third it influences the degree to which one views IDL as ‘international’ as opposed to ‘transnational’ law. Fourth, it determines one’s view of the role that international human rights law plays in IDL. Each of these aspects of IDL will be considered separately.

• III. 1 The Traditional View of Development

• The traditional view is advocated by elements of the business community, governments, and international organizations.
  The traditional view is that development is primarily an economic process that consists of discrete projects (for example: building a dam, a road, a school, a factory, a mine or a telecommunications system) and specific economic policies.only need to consult with the project sponsor or contractors on specific technical issues related to the design, construction or operation of the project.Decision-making under the traditional view is likely to be ‘top-down’. There are several reasons for this. First, most project contractors are private companies in which the managers of these companies have been hired by the owners to run the companies for their benefit. This means that they are expected to make all project related decisions with this objective in mind.22Public sector project sponsors and contractors similarly have to account to their owner – the state (or states in the case of multilateral institutions) – for how they use their assets. This suggests that they are also likely to have a top-down decision-making structure.Second, while the managers may feel the need to consult with others before making any particular project decision, the range of people with whom they need to consult is limited. Since the project sponsors and contractors are only responsible for technical and financial issues, their senior management only needs to consult with experts on these issues before making their decisions. To the extent that the project requires a broader consultative process, it is in regard to the social and environmental externalities that are the responsibility of the government and not the sponsors or contractors.The traditional view makes it easy to identify to whom the different participants in the project are accountable. Project sponsors and contractors are only accountable to three groups. First, they are accountable to government regulators for their compliance with the applicable regulations. Second, they are accountable to those who hired them for the performance of their contractual obligations. Third, they are accountable to their owners or shareholders for their management of the enterprise.The project sponsors and contractors will only be accountable to the project’s intended beneficiaries and to those adversely affected by the project in two situations. The first is when they have a direct contractual relationship with these other stakeholders and have failed to perform their contractual obligations. The second is when the sponsors or contractors have committed a tort against these other stakeholders and there is a forum that is willing to entertain the victims claim. This forum could be either a national court or an international body.The state, as the party with decision-making responsibility for the broader social and environmental aspects of the project, is accountable to the beneficiaries and those harmed by the project. Accountability is imposed on the state through the political system. In other words, the proponents of the traditional view are relying on the two primary mechanisms of accountability in democratic governance to hold governments responsible for their decisions and actions relating to specific policies or projects. The first mechanism is the periodic elections for a new government. Thus, interested persons can hold the government, which has sponsored or approved the project, accountable for its actions by voting against it in the next elections. This is not a particularly effective means of accountability for specific project related decisions. It is unlikely that the electorate as a whole will base its decision on the government’s conduct in one project that may only affect a portion, possibly a very small portion, of the electorate. The second mechanism is whatever administrative or judicial procedures the state might have established through which interested private actors can challenge governmental decisions.It should be noted that the top down nature of decision-making and the limited range of accountabilities described above both suggest that the traditional view contemplates a very limited role for non governmental organizations (“NGOs”) in development. Unless these groups can act as project sponsors or contractors, their role is limited to assisting project victims hold project decision-makers accountable for their decisions and actions in the project. Their efficacy in doing so will depend, in the first instance, on how much access they have to judicial and administrative tribunals and to the media. They may also be able to hold decision makers accountable through international forums and through developing international campaigns in conjunction with international NGOs.23 A third implication that follows from the traditional view is that it places some constraints on the topics that are open for negotiation in any development transaction. Since the broad social, political and environmental decisions are the prerogative of the state, they are outside the scope of the negotiations between the project sponsor and the government or the project sponsor and the project contractors. In both sets of negotiations, the broad social, environmental and political parameters of the project are treated as fixed and the parties must negotiate the terms of their transaction within these parameters. This is consistent with the legal rule that a foreign project sponsor’s or contractor’s obligation is to obey the law of the host state and to refrain from interfering in the affairs of the host state.24 A fourth implication is that the traditional view of development is consistent with traditional notions of sovereignty. The traditional view by treating social, political and environmental factors as project externalities is implicitly defining the scope of the state’s sovereignty in regard to the other actors in development. It is making clear that decisions relating to the social, political and environmental consequences of development should be taken by the sovereign and its decisions should be respected by the other actors in development.

• III.2. The Traditional View of Development and IDL III
  

• Based on the traditional views of development, the traditional view of IDL focuses on economic law issues and specifically international economic law issues. IDL deals with those international legal aspects of international trade, finance and investment that relate to the challenges facing developing countries. In other words, the traditional view of development conceives of IDL as being a specialized branch of international economic law. It is that branch of international economic law that deals with the specific problems of developing countries.25 This means in the trade area IDL focuses on these aspects of international trade law of most interest to developing countries. This would include, for example, issues related to special and differential treatment for developing countries through such programs as the Generalized System of Preferences (GSP);26 and the impact of the Trade Related Aspects of Intellectual Property Rights (TRIPS Agreements) on developing countries.27 In addition, IDL would include efforts to make trade in commodities more predictable,28 and to develop legal arguments that support changes designed to make the international trading system more equitable.29 Similarly, in the investment area, traditional IDL focuses on such issues as nationalization and compensation,30 the treatment and responsibilities of investors 31 and host state regulation of and incentives for investors.32 It also deals with questions of political risk and the resolution of disputes between investors and their host countries.33 Finally, in the international financial area, IDL has focused on such issues as access to capital,34 debt renegotiation,35 the operations of the Bretton Woods Institutions,36 and foreign aid.

• Table of Contents
  I.Introduction
  II. A Brief History
  III. Competing Views of Development
  (a) The Traditional View of Development
  (b) The Traditional View of Development and IDL
  (i) The Substantive Content of IDL
  (ii) Sovereignty and IDL
  (iii) The Relationship Between National and International Law
  (iv) The Role of International Human Rights Law in IDL
  (c) The Modern View of Development
  (d) The Modern View of Development and IDL
  (i) The Substantive Content of IDL
  (ii) Sovereignty and IDL
  (iii) The Relationship Between National and International Law
  (iv) The Role of International Human Rights Law in IDL
  IV. Some Thoughts on The Future Evolution of IDL

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