Alternative framework for economic governance
The current global economic crisis provides stark evidence that the economic policies of the last 3 decades have not been working.
The devastation that the crisis has wrought on the most vulnerable households in the Global North and Global South is a reminder that the formulation of economic policy and the realization of human rights (economic, social, political, civil and cultural) have for too long been divorced from one another. Economic policy and human rights do not have to be opposing forces, but can exist symbiotically.
Macroeconomic policies affect the operation of the economy as a whole, shaping the availability and distribution of resources. Within this context, fiscal and monetary policies are key.
- Fiscal policy refers to both public revenue and public expenditure, and the relationships between them as expressed in the government budget.
- Monetary policy includes policies on interest and exchange rates and the money supply, as well as the regulation of the financial sector.
- Macroeconomic policies are implemented using instruments such as taxation, government spending, and control over the supply of money and credit.
These policies affect key prices such as interest and exchange rates that directly influence, among other things, the level of employment, access to affordable credit, and the housing market.
Applying a human rights framework to macroeconomic policy allows States to better comply with their obligation to respect, protect, and fulfill economic and social rights. Human rights are internationally agreed-upon universal standards. These legal norms are articulated in United Nations treaties including, the Universal Declaration of Human Rights (UDHR), the International Covenant on Civil and Political Rights (ICCPR), and the International Covenant on Economic, Social and Cultural Rights (ICESCR).
Article 1 of the UDHR states that, “All human beings are born free and equal in dignity and rights.”
Although the UDHR was written about six decades ago its relevance is enduring. Many of the ideas address concerns and critical issues that people continue to face globally. Issues regarding inhuman punishment (Art. 5), discrimination (Art. 7), property ownership (Art. 17), equal pay for equal work (Art. 23/2), and access to education (Art. 26/1) are pertinent matters in countries South and North of the equator.
More specifically, States have an obligation under international law to respect, protect and fulfill human rights, including the economic and social rights of people within their jurisdiction. This is particularly relevant now given the financial crisis. In the U.S., regulation is skewed in favor of certain interests. The failure to extend government’s supervisory role in the context of social and economic change is a failure with regard to the obligation to protect human rights.
States should abide by key human rights principles to achieve economic and social rights. Some of the principles have potentially important implications for governance of financial institutions and markets, yet these possibilities have been underexplored.
Economic and social rights have a concrete institutional and legal grounding. Global declarations, international treaties, covenants, and, in a number of cases, national constitutions have incorporated aspects of the economic and social rights framework—providing an institutional infrastructure in national and international law.
Some have suggested that a consideration of global justice may not be a useful pursuit because of the institutional complexities involved. However, this does not get around that fact that global institutions already have an impact on social justice, both positive and negative.
It is useful to tease out the implications that elements of alternative frameworks have for economic governance, specifically those supported by existing institutions. Economic and social rights represent one such concrete framework. The framework is an evolving one, and ongoing discussion and deliberation is necessary to address underdeveloped areas and potential deficiencies.
Learn more about this proposition
- How to Apply a Human Rights Framework to Macroeconomic Strategies by Center for Women’s Global Leadership (CWGL)
This section is based on CWGL’s blog “Applying a Human Rights Framework to Macroeconomic Policies” (2012).