NIRA conducted a project entitled "Reforming the Organization and Management of International Institutions through the Introduction of New Public Management (NPM) and Other Methods" from 2001 to 2002. This is a research report.
Part of the backdrop to this project is that NIRA has been focused since early in the process on research related to New Public Management (NPM), which has gotten attention as a method to realize public sector reforms. Recognizing the need to promote administrative efficiency due to difficult financial conditions in central and local governments, NIRA has conducted research such as "Research on the Introduction of the NPM (New Public Management) Approach into Local Governments". This research brought awareness to the Japanese government, which has a large financial deficit, that the review of financial support to international organizations and similar problems needed to be addressed. Determining whether the international organizations, which aim at an international public good, implement their policy and projects effectively and efficiently is warranted in the current fiscal climate and this project started from the awareness of the issues with reference to which we could analyze and evaluate current management practices by using NPM. As a result, we acquired varied information and the unconventional image of international organizations has become apparent. Here we present part of this report.
First, when viewed from the perspective of evaluation, the situation surrounding international organizations is clearly unconventional.
The role to be played by international organizations continues to increase, in areas including the resolution of sets of global issues and the establishment of new agreements and conventions. On the other hand, however, it has become difficult for such organizations to ensure sufficient funds due to financial restriction on part of their national governments. As a result, it has become necessary for international organizations to evaluate their activities and to clarify the most effective ways to utilize the limited funds and personnel they have available. In response, the organizations are attempting to institute reforms, such as the adoption of achievement oriented budgeting system and methods of evaluation focusing on the feasibility of projects, in particular in the field of development.
As the case of Sweden demonstrates, strategies for employment of the funds contributed to international organizations are being formulated at the level of national governments, given the fact that governments are also faced with the necessity of efficiently utilizing their resources. It is essential for Japan also to clarify its strategy for its international organizations, from the standpoints of international public interest and national interest, in order to clarify its expectations of these organizations. In addition, it is time for Japan to fully explain to taxpayers the status of its international organizations through the publication of a white paper on international organizations. The continuing economic downturn and the resultant financial restrictions should urge Japan to clarify an order of priority among its international organizations. This is an excellent opportunity for Japan to develop a strategy for its budget allocation in order to avoid redundant contributions.
To that end, how should we evaluate international organizations?
Issues which will require exploitation in future research include the indexes to be used in the evaluation process, and the methods utilized to evaluate the outcome. Another issue is the tendency for international organizations to become excessively focused on evaluation. The evaluation of international organizations from the standpoint of national interest is an extremely politically sensitive issue and therefore requires special caution. In addition, this project confirmed that Japan's international organizations are largely efficiently managed. New issues related to the management of international organizations were also clarified in this research project.
Although international organizations are expected to play various roles, such as taking leadership in formulating new policies from among a number of proposals, establishing international norms and formulating global consensus on a variety of issues utilizing their multilateral frameworks, the resources with which they are actually provided are often very modest. International organizations are facing a scarcity of funds as a result of financial restrictions on national governments. An increasing proportion of the funds provided to these organizations is constituted by extra-budgetary funds which have restrictions on their use. At the same time, a growing number of international organizations are being contracted by national governments to fulfill specific functions. The research conducted in this project indicated that if this tendency goes too far, it may hinder the organizations from fulfilling their original roles.
In the case of UNICEF, 30% of funding is supplied by the National Committees for UNICEF, which are private sector organizations. In Japan, the amount of funds provided by the Japan Committee for UNICEF is larger than that contributed by the national government. Meanwhile the ITU and other organizations which have competed with private sector organizations and succeeded in increasing the amount of funds it receives as contributions from the private sector, are making efforts to reform themselves into privatized organizations. As these examples indicate, the study demonstrated the diversity of styles of management adopted by international organizations.
When evaluating international organizations from the perspective of Japan's national interest, the focus tends to be restricted to visible results such as concrete figures. Although it is often pointed out that there are few Japanese employees in international organizations, the number of young female employees is increasing and Japanese citizens fill high-level posts in a number of these organizations. The problem lies in the absence of a system and a policy of support which will provide opportunities for Japanese citizens to assume important posts, such positions as section and department chiefs categorized as "P-5 grade" (professional category) and "D level" (policy-making category). Positions such as these would enable them to influence the allocation of human resources and policy formation. In addition, an employee of an international organization must fulfill his/her duties in the organization irrespective of whether he/she is Japanese, and it may therefore be shortsighted to assume that an increase in the number of Japanese employees would automatically enhance Japan's national interest. We should rather seek policies to advance both international public interest and national interests simultaneously.
The actual financial status of international organizations is another problem which should be addressed. The total amount of funds provided to the UN system (15 programs and 16 special institutions) in 1999 was 10.2 billion US dollars. In contrast, the total loans of the World Bank group in the same year reached 15.3 billion US dollars. In the case of Japan, several ministries, including the Ministry of Foreign Affairs and the Ministry of Finance, are jointly irresponsible for international organizations and therefore it is difficult to achieve a clear understanding of the total amount of funds contributed to these organizations. This suggests the necessity of simplifying the system of accounting. In addition, as the Japanese fiscal year commences at a time different than the UN fiscal year, the payment of Japan's contribution is regularly delayed. In fact, Japan often appears on the list of delinquent nations. This research project indicated that Japan could solve this problem in the near future by changing the system by which the budget for contributions is formulated and making adjustments in its payment schedule to international organizations.
It will also be important to revitalize general meetings and meetings of boards of directors. The management of these meetings is the joint responsibility of delegates representing a variety of national governments. Japan is the top donor to international organizations and the nation should therefore take responsibility for clearly presenting its views on the policies and concepts of those organizations. In addition, the effective utilization of multilateral frameworks of international organizations will make it possible to control the actions of major powers such as the U.S. and China, which are difficult to influence at the level of bilateral negotiations.
As described above, valuable issues related to international organizations were clarified in this research project. We must not forget that we enlist cooperation from many people in the process of this research. We are sincerely grateful to them.
Although this research project was conducted with the cooperation of many, the evaluation of international organizations is a major theme and should be the subject of further research. We hope this research raises new questions about research into international organizations.
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March 2004
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