Multilateral development banks (MDBs), as institutions with broad-ranging immunities, have over time developed distinct conceptions and frameworks of accountability as towards those who are negatively impacted by their projects. We argue that MDBs’ understandings of accountability, and the policies, procedures, and mechanisms through which affected groups may seek account and redress, are ill-suited to address the impacts of these institutions’ digitalization projects. As MDBs’ accountability frameworks arose in response to harms from physical infrastructure projects, they are temporally and spatially oriented towards physical, enumerated risks, and those considered “affected” and thus entitled to demand account and redress are delineated by narrow localized geographies. In addition, longstanding limitations of MDBs’ independent accountability mechanisms generate serious obstacles to access. As digital technologies are becoming central to MDBs’ projects, and MDBs are increasingly funding “digital transformation”, critical misalignments are arising between MDBs’ narrow approaches to accountability and the far-ranging impacts of digitalization. Building on pre-existing pathologies of MDBs’ accountability frameworks, and highlighting new challenges posed by digitalization, we argue that a reconceptualization of MDBs’ accountability is required. We offer a series of observations in that direction, beginning from entirely different answers to the questions: accountability for what, to whom, and through which processes?
Digitalization as Development: Rethinking the IFC’s Risk Assessment and Remedy Frameworks in the Context of Digital Technologies
“Digital transformation” has become an increasingly central pillar of the international development landscape. “Reaping the benefits of digitalization” is seen as a developmental imperative, and new technologies are widely hailed to provide transformative opportunities. For multilateral development banks (MDBs) in particular, digitalization has become a strategic priority, and these institutions are financing a rapidly growing number of projects with digital components. Although digital technologies can be transformative, whether and under what conditions such transformations enhance economic and social well-being in the ways that MDBs proclaim requires close examination.
Focusing on the International Finance Corporation (IFC), a private-sector lending institution of the World Bank Group, this report unpacks the concept of “digital transformation,” posing the question: what exactly is being transformed by digital technologies, for whom, and with what implications? The report then analyzes the IFC’s current framework for assessing the risks and impacts of its investments and for remedying harms arising from its projects and identifies key challenges that digitalization poses to existing risk and impact assessment frameworks and remedy mechanisms. It then proposes forward-looking suggestions for how existing frameworks might be rethought and reformed.
