Integrity, trust and legitimacy – how to secure international cooperation

Omar El-Nahry, Senior Compliance Officer, KfW

In 2023, we continue to live in a world that is both unimaginable and unsustainable without international cooperation in security, development, and health - whatever individual leaders or spectacular global events seem to suggest. Russia’s ongoing war against Ukraine, climate change and the COVID-19 pandemic are just some of the global disruptions that have revitalised the discussion about and critical engagement with the much-invoked rules-based international order. International Financial Institutions (IFIs) and Development Finance Institutions (DFIs) continue to be among the most important institutions supporting this order. In addition to providing the financing required to meet global challenges, they are also one of the most tangible expressions of countries putting their money where their mouths are and making quantifiable commitments to stopping climate change, addressing global health threats, or rebuilding countries shattered by wars of aggression. 

Given their crucial role, the effective functioning of IFIs and DFIs should remain a key priority of both national governments and the institutions themselves. Effectiveness, in turn, is directly linked to the concept of legitimacy, especially where national and international actors must cooperate and – implicitly or explicitly – trust one another. And few things are more fundamental to trust than integrity, not least in times where truth itself has become a contested subject. 

In this context, the work done by integrity professionals in IFIs and DFIs is a direct contributor to maintaining successful international cooperation, particularly in international development. What can these professionals and the institutions they work for do to strengthen the link between integrity, legitimacy, and effectiveness?

Critical voices, effective institutions 

Like any human endeavour, international cooperation is kept alive by its successes. Be it the number of people lifted out of poverty, the tons of carbon prevented from entering the atmosphere or the number of impactful projects that have been implemented: IFIs and DFIs look best when they are seen “making things happens”, especially when the need is greatest and the time to react is shortest.

Ensuring that the decision-making process that leads to these impacts remains solid is however no less important than the visible outcomes themselves, even if it often remains hidden from the public view. International development actors often falter when the desire to react to an urgent crisis or to deliver on projects trumps sound deliberation and decision making. The myriad issues and scandals arising from the reactions to the COVID-19 pandemic, on both the national and international levels, serve as an enduring illustration of this. IFIs and DFIs need to be able to demonstrate to governments and the public that their path to a given decision is just as well thought out as the ultimate project itself, especially in times of crisis and urgency.  Therefore, institutions should favour a diversity of viewpoints over a single-minded focus on achieving a given development or policy goal.

Here, Integrity professional play a crucial role, often acting as the critical voice in the room, not least when there are deeply consequential discussions to be had about the trade-offs required to solve global challenges. To pick just a few of many conundrums, should the need for more green energy trump concerns about human rights in supply chains? Can renewables or other new economic sectors be protected from the control of oligarchs, corrupt elites, and their cronies? Where do the limits lie when engaging with autocratic regimes that focus on developing their market economies while restricting basic freedoms at home? 

Raising these questions does sometimes (and perhaps often) impede fast, efficient decisions on specific issues. However, having individuals that are willing to air and discuss their uncomfortable implications contributes to the overall effectiveness of the work DFIs and IFIs do. By giving a voice to integrity challenges at an early point, Integrity professionals can ensure that their institutions engage with challenges and create appropriate responses now rather than later, preventing a painful reckoning when the crisis is over or priorities change.

Trust and legitimacy

Upholding integrity will also continue to play a key role in confronting the external challenges IFIs and DFIs face. Two of these have come to the forefront over the last two years. First, public institutions continue to face a crisis of legitimacy, both nationally and internationally. This has been exacerbated by COVID-19 and the Russian war on Ukraine, both which have supercharged misinformation, spawned conspiracy theories and eroded trust in governments and society at large. Second, governments and electorates are likely to focus more narrowly on their (national) interest in times of crisis, questioning why international organisations should receive funds that are needed at home.

The work of IFIs and DFIs is uniquely threatened by these challenges. In addition to handling large amounts of money, they are easily painted or perceived as “undemocratic”, “distant” or “unaccountable”; or caricatured as engaging in wasteful and ineffective projects of international financial cooperation, rather than supporting domestic priorities.

A commitment by IFIs and DFIs to uphold integrity in all aspects of their work is a key remedy to counter these challenges. The work of integrity professionals is indispensable to ensure trust in the work done by IFIs and DFIs by the public at large and national decision makers. Whether this takes the form of investigators rooting out corruption or misconduct within their own institutions, debarring corrupt companies (including household names from major economies) or compliance professionals preventing investments so compromised that they can only be seen as hypocritical – all these individual actions are visible commitments by IFIs and DFIs to their own integrity and continued legitimacy.

Ultimately, the work done by integrity professionals is but one component of effective international cooperation. Much will depend on the ability of IFIs, DFIs and national governments to align their agendas and approaches to meet varied global challenges. It will also depend on the ability of the current international system to absorb new entrants and to maintain credibility in the eyes of the entire international community, including the citizens of those countries benefitting from development finance. Yet, a strong commitment to meeting challenges with integrity can prevent legitimate criticism and scrutiny of international development finance from curdling into destructive cynicism.