The Erasure of Race in International Economic Law

Anyone who peers into books, articles, policy documents, and other international economic law material could very well assume that race is irrelevant. After all, there is seldom any consideration or discussion of race in international economic law academic, policy, and practice circles. I refer to this absence of tracing the large footprints of race in international economic law as “erasure.”Footnote ¹ This erasure, which is not unique to international economic law, can be attributed to several factors.Footnote ² First, racial justice debates and discussions have been marginalized in academic, policy, and practice circles.Footnote ³ Second, international economic law institutions, especially at the international level, have been dominated primarily by white men who have shown no interest in interrogating these issues as a major aspect of their work. At the same time, these institutions have historically excluded and marginalized people of color, especially those who center questions of race in their work. For example, state-to-state arbitration as well as investor-state arbitration, two of the most lucrative areas of practice in international economic law, have been dominated by white men since their modern origins. The exclusion of women as well as Black and Indigenous peoples and people of color in these areas has also historically been reflected in law firms and boards of the leading journals in the field, as well as among lawyers working for governments and in academia.Footnote ⁴

One international economic law strategy that makes discussion of race a taboo is the rule prohibiting consideration of political factors, otherwise known as the “non-political rule,” embedded in the constitutive documents of both the World Bank (Bank) and the International Monetary Fund (IMF), two of the most powerful international economic law institutions. According to this rule, decision making in both the Bank and the IMF is required to be non-political. Non-political decision making has been interpreted to require racial neutrality notwithstanding the racial inequity embedded in international economic law. This rule requires these institutions to take only economic considerations into account and to refrain from interfering in the domestic jurisdiction of member states. At the height of the anti-apartheid struggle in the late 1960s, the general counsel of the World Bank told the Fourth Committee of the United Nations that the World Bank's lending to apartheid South Africa was justified by this non-political clause. In other words, that notwithstanding the then emerging consensus about the illegality of apartheid and racial discrimination under international law, the Bank could not stop lending to the apartheid regime, because the non-political clause forbade the Bank to take into account considerations beyond economics.Footnote ⁵

The World Bank's silence about race in the face of the brutal repression of Black anti-apartheid campaigners typifies what Layla Saad has defined as white silence: “when people with white privilege stay complicitly silent when it comes to issues of race and white supremacy.”Footnote ⁶ Saad reminds me of Martin Luther King Jr.'s admonition that, “[w]e will have to repent in this generation not merely for the hateful words and actions of bad people, but for the appalling silence of the good people.”Footnote ⁷ Although writing in a different context, Saad nevertheless aptly captures how best to understand the World Bank's claim of racial neutrality in the face of apartheid:

Silence about race by white and non-white peoples leaves unchallenged and unspoken the role and power of race in international economic law. As Zinaida Miller has argued in a different context, it is in the self-interest of ruling elites not to openly discuss and debate questions of past responsibility and continuing oppression.Footnote ⁹ Uncovering the hidden role and power of race is an important prerequisite for international economic law academics, practitioners, and policy experts beginning to reckon with the moral and other considerations and obligations that arise from past and ongoing legacies of racial oppression.

Rules of International Economic Law Embed Racial Hierarchies

The second major point this essay makes is that rules of international economic law embed racial hierarchies. To fully address the racial injustices rooted in rules of international economic law today, we have to center the past—in large part because it was in the past that racial hierarchies became embedded in current international economic law rules.

As the former UN Special Rapporteur on contemporary forms of racism, racial discrimination, xenophobia and related intolerance, Tendayi Achiume, has argued, contemporary racial inequalities have their roots in histories of slavery and colonialism.Footnote ¹⁰ Legacies of slavery and colonialism remain reflected in the disadvantaged status of those who are the descendants of former slaves or of those victimized by imperialism. Understanding the ways in which this history locked in the advantages of predominantly white countries makes it possible to see how once racial inequality was produced under slavery and colonialism, it became self-enforcing across generations—ingrained in global and national institutions and structures that continue to reinforce and generate new forms of racial inequality. Given the embeddedness of racial inequality and its self-enforcing nature, intentional discrimination between individuals is only one aspect of racial discrimination. In other words, racism is not a relic of the distant past that has been transcended by contemporary international law—rather it has a historical rootedness.Footnote ¹¹

It is only by examining colonial histories in the construction of the post-World War II global economic order––including the Bretton Woods institutions––that its racialized origins become visible. Further, it is only by rejecting post-World War II international economic law triumphalist stories about overcoming the past that historical continuities and discontinuities can be more truthfully traced. The post-World War II international economic order is traceable to its precursors, which include the Mandate system of the League of Nations.Footnote ¹² In other words, the techniques of the Bretton Woods institutions carried forward within them the colonial project of the Mandate system. They did so not through direct colonial control, but rather indirectly through international governance mechanisms, like the World Bank, which reproduced the same hierarchical relationships between the former colonies and their former colonial masters, who now controlled these international financial institutions.Footnote ¹³

The weighted voting systems of the Bretton Woods institutions also carry forward the hierarchical relationship between former colonies and their colonizers. For example, the president of the Bank is always appointed by the United States, while Europe appoints the managing director of the IMF.Footnote ¹⁴ Under the IMF's weighted voting system, African countries, which constitute close to 30 percent of the Bank's membership, have a mere 6 percent of voting rights.Footnote ¹⁵ This unevenness constitutes an “unjust global order with roots in centuries of subjugation of peoples from across Africa and colonialism.”Footnote ¹⁶

International Economic Law's Production of Racist and Subordinating Tropes

International economic law knowledge production is embedded in development discourse and neo-liberal assumptions of white Western normativity and supremacy. For example, the progress narrative about backward and developed countries at the center of development orthodoxy is based on a teleology that frames the present economic advantage of the Global North as resting on its presumed superior intellectual, political, economic, and social practices.Footnote ¹⁷ By contrast, non-European political, economic, and social practices are conceptualized as inferior, thereby formalizing racially coded and unequal relationships between the West and the non-West. These accounts of development, built on the erasure of the “violent history of European imperialism (conquest, slavery, genocide, and land and resource expropriation) and the trope of “civilization” claimed by the West,”Footnote ¹⁸ must be rejected in international economic law.

Ideas, policies, and practices about development, particularly those relating to neo-liberalism, as promoted by the World Bank and international organizations, are predicated on background assumptions of racial neutrality. In the World Bank's perspective, development is a color-blind process under which countries that do well are following its technical prescriptions and those that lag behind are labeled errant and/or kleptocratic. Neo-liberal economic policies, such as those aimed at deregulation, privatization, and liberalization, are heralded as the path toward prosperity. To the extent that the aspirations of developing countries to self-sustaining development depart from the prescriptions of the Bretton Woods institutions, they are characterized as unacceptable wayward departures from the path toward development. Such race-neutral framings make inequality, especially racial inequality, invisible, thereby perpetuating racialized disadvantages and inequalities.

Development doctrine places the blame for lack of development exclusively at the feet of non-Western ideologies, institutions, and practices. This neo-liberal strategy of labeling criticism or opposition to free market reforms and liberal democratic prescriptions as development failures has at least two consequences. First, it shuts the door to examining other explanations of economic disadvantage, such as inherited colonial legacies as well as the dynamics of underdevelopment embedded within the development framework itself. Second, it is based on and reproduces disparaging and implicitly racist stereotypes of non-Western states, their leadership, and their people as lazy, incompetent, and corrupt. The future of international economic law requires deeper probing and exposure of analyses that advance racist tropes under the veneer of neutral, technical assessments.Footnote ¹⁹

Both the World Bank and the IMF are key purveyors of neo-liberal economic governance through their conditional lending programs. By conditioning access to finance to the implementation of neo-liberal economic prescriptions, they institutionally transform the priorities of states, particularly in the Global South, by making them more predisposed to serve the narrow profit-making interests of capital rather than those of the majorities of their populations. Because owners of capital—or “investors,” as they are referred to in neo-liberal economic programs—are overwhelmingly from the Global North, countries of the Global South––primarily the former colonies––implement neo-liberal economic programs that privilege the role of private enterprises over public enterprises and the public interest in the Global South.

Consider how the prioritization of sovereign debt payments to creditors is made possible by a whole range of neo-liberal “disciplinary” forces that keep indebted countries on a short leash. These forces include credit rating agencies that downgrade the credit ratings of countries that dare to consider restructuring. They also include the IMF, which prevents defaulting countries or countries that do not follow its stringent neo-liberal fiscal consolidation programs from accessing its funding and that of private creditors. The IMF's fiscal consolidation programs require countries to increase taxes and tax collection and to cut social spending.Footnote ²⁰ The budgets of countries of the Global South prioritize repayment of massive debts to private creditors overwhelmingly located in the Global North. In effect, the limited budgetary resources of these economies are diverted from funding public services, like education, health, and housing toward debt repayment. Once again, the interests of the poor, disenfranchised majorities of color are subordinated to the economic interests of investors, primarily from the Global North.