The United Nations and development: from the origins to current challenges

7   The United Nations and development

From the origins to current challenges

John Burley and Stephen Browne

The United States dominated wartime planning for the new world organization. It sought international economic and financial cooperation as the means to maintain and expand the capitalist postwar liberal order of open markets and free trade. This ambitious agenda was very largely focused on the center of the world economy in North America and Europe: issues of particular concern to the periphery in Africa, Asia, and Latin America were essentially ignored.

Yet development is now one of the principal purposes of the United Nations, taking well over half of the resources available to the UN system as a whole. The planners of the new “general international organization” brought into being at San Francisco had in no way envisaged such a possibility. Moreover, development requires a coherent approach, but the UN Charter provisions for such concerted international action have proved inadequate to the task.

This chapter explores how development became part of the pursuit of international cooperation, as an “add-on” to the institutional machinery established in 1945.1 It looks first at the wartime planning for postwar economic and social cooperation. It then reviews the evolution of the UN’s programs for development before drawing some general conclusions.

The United Nations has contributed to the evolution of the theory and practice of development, through the analysis of trends and problems and through direct support for national development. This chapter covers both such contributions, with a focus in particular on the latter. Also running through the chapter is the theme that the post-1945 emergence of development as a principal purpose of the United Nations and the decentralized nature of the UN system have together created an unprecedented challenge: is the system today in its present form capable of successfully confronting the myriad interrelated economic, environmental, financial, and social problems?

Wartime planning for postwar economic and social cooperation

From the early days of World War II, and in light of the perceived failure of the League of Nations to prevent aggression, it was self-evident that a new international organization would be required at its end with capacity both to preserve peace and security and to promote economic stability and prosperity. That objective—enshrined in president Franklin Roosevelt’s Four Freedoms speech in January 1941 and the objectives set out in the Atlantic Charter in August 1941 and then developed as a multilateral legal instrument in the 26-nation Declaration by United Nations of 1 January 1942—guided the intense preparatory work for the new organization.

The organizational scheme for the UN system was the product in the main of several years of work by a group of dedicated officials in the US State Department. Broadly speaking, there were in the US administration two groups of planners: the realists and the free traders, on the one hand, who argued in favor of a postwar liberal order that the United States by virtue of its economic size and entrepreneurial spirit would naturally dominate; and the idealists, on the other hand, who sought to internationalize the New Deal as a way of organizing and regulating the postwar order.

Diplomats, economists, international lawyers, and technical experts were involved in the series of wide-ranging debates in the State Department, the Treasury, and other US government departments. Research groups and various individuals also contributed to the process. At the nucleus of this work was Leo Pasvolsky, special assistant to Secretary of State Cordell Hull, who through “indefatigable hard work, knowledge and discretion, [was] the indispensable proponent of the Charter.”2 From 1942 onward, they reached out to the other United Nations governments in a multitude of consultations.

The road to San Francisco

Work on what became the Charter provisions on international economic cooperation began in earnest in 1942. The starting point was the Anglo-American discussion on the implementation of Article VII of the Lend-Lease Agreement, which entitled the United States to request British “consideration” of the elimination of imperial trade preferences in return for American wartime economic and financial support. In response, the UK Treasury offered John Maynard Keynes’s plan for an international clearing union. Washington’s counteroffer was in the form of Harry Dexter White’s stabilization fund and of an International Bank for Reconstruction and Development that would be specifically linked, unlike Keynes’s proposal, to the United Nations. These proposals and the ensuing discussions eventually led to the UN Monetary and Financial Conference at Bretton Woods and the establishment of the International Monetary Fund (IMF) and the World Bank. They also ushered in a series of consultations on other technical subjects such as agriculture, labor, education, health, civil aviation, and telecommunications, which in turn led to the establishment of other international agencies preceding and accompanying the UN Organization. Naturally, also, the question arose of how all these agencies would work together.

The State Department planners were fully aware of the need to include in the overall structure—“a large tent” as Cordell Hull put it—arrangements for both peace and security, and economic and social cooperation. The 1930s were a constant reminder of how terrible economic conditions of that time had contributed to nationalistic and war-like behavior. In addition, the planners were guided by several key considerations specifically related to economic and social issues, including lessons learned from the League of Nations. Also relevant to the story are functionalism and the events at Dumbarton Oaks and the UN Conference on International Organization that created the Charter at San Francisco.

The legacy of the League of Nations

Most observers regard the League of Nations as an unmitigated failure. This is only partly true. Recently published research has resurrected the League’s economic, financial, and social work in the latter 1930s and its influence on the establishment of the United Nations.3 Alexander Loveday, a Scottish statistician educated at Cambridge and de facto head of the Economic and Financial Organization (EFO) of the League, is the key player here. Pasvolsky used to represent the United States in meetings of the League on economic issues in the mid-to late 1930s, at which Loveday was active, and the two remained thereafter in close touch, especially after the EFO migrated from Geneva in 1941 to resume its activities in the United States at the invitation of the Institute for Advanced Study at Princeton.

In the late 1930s, Washington became genuinely interested in, and highly complimentary of, the League’s work on economic and financial issues. The United States had remained an active member of the International Labour Organization (ILO) and sought ways to make its collaboration more effective.4 Simultaneously, Loveday, with the belated support of the League’s secretary-general, Joseph Avenol, used the crisis surrounding the League of Nations to advance reform of its institutional machinery. Inherent in this effort were two objectives: the clearer separation of the League’s work on economic, financial, and social cooperation from the political arena; and the consequential attempt to allow non-members (i.e., mainly the United States) greater participation in that work.

Thus was born the Bruce report, or more formally: The Development of International Cooperation in Economic and Social Affairs.5 An independent committee of experts with proven experience of League affairs, which was chaired by the former Australian prime minister Stanley Bruce, recommended in August 1939 a new structure for the League’s economic and social affairs. The report’s presentation of the need for international economic and social cooperation reads unerringly like a similar report would today. It was still-born, given the outbreak of war a few days following its publication, but the Bruce recommendations for a Central Committee for Economic and Social Questions provided a template for discussions on what would eventually become the UN’s Economic and Social Council (ECOSOC).

Once installed in Princeton, Loveday oversaw the preparation of a much-appreciated overview, The Transition from War to Peace Economy (1942–43).6 It “shaped the architecture of economic and financial policy through its globalised interpretation of the crisis … international cooperation was the key,” Patricia Clavin wrote. “The commitment to full employment remained a desired goal, [subject to] … the liberation of international capitalism … [it was] a powerful case for institutionalised cooperation.”7

Loveday also continued his extensive networking. He was close to Frank McDougall, another Australian who had worked with the League on agriculture and nutrition and who plotted with Eleanor Roosevelt to encourage her husband to convene the first of the series of conferences on international organizations, on agriculture. He regularly helped Pasvolsky and others in the State Department, the Treasury, and other US agencies. He advised on the establishment of the UN Relief and Rehabilitation Administration (UNRRA) and the Food and Agriculture Organization (FAO). Moreover, he expressed his concern about how the functions of the new institutions would relate to one another: “he was anxious there should be one ‘overall political and/or economic world organisation of which these various functional bodies should be a part’.”8

Loveday and others were prescient in their comments about the evolving international architecture. So why has almost all of the literature about the establishment of the United Nations ignored their contributions? In fact, Loveday was instrumental in downplaying the League’s experience. He insisted that “reference to the League’s pioneering contribution to institutionalised cooperation [be] knowingly cast aside … He wanted the successor organisations of the League to be new and distinct … and for the new UN organisations, through comparison with the failed League, to be branded a success.”9


Another influential thinker was David Mitrany, a Romanian-born British historian and political theorist associated with the “functionalist” approach to international relations. He had also worked for the League and knew Loveday and Pasvolsky. In his 1934 Progress of International Governance and numerous other publications, Mitrany argued that international cooperation should be based on those issues that unite—rather than divide—people; that technical issues should be separate from political ones; that each technical issue should be handled on an autonomous basis; and that solutions to problems should be sought by function, not form.

It is evident that the proposals for international organizations were strongly influenced by the successful experience of the US administration in the 1930s in putting in place the structures for the New Deal to combat economic depression and high unemployment. Indeed, Mitrany claimed to take his main model for functional international cooperation from the New Deal, especially the Tennessee Valley Authority. Some argue, in fact, that the postwar international architecture was modeled on an internationalization of the New Deal,10 on the basis of the “regulatory state” introduced in the United States in the 1930s that, in the American view, could be generalized worldwide. What is clear is that the policy of holding separate international conferences on each of the functional areas in effect confirmed the “functionalist” approach to the organization of a new postwar order.

In mid-1943 Roosevelt initially preferred a decentralized system without any coordinating central mechanism. Subsequently, State Department planners asked themselves whether there should be one organization with semiautonomous branches, similar to what Bruce had suggested for the League, or a coordinating structure with a more powerful capacity for direction. These debates reveal the relevance of postwar planning to present-day considerations regarding reform of the United Nations to which we return. The basic architecture of the embryonic UN system was determined several months before Dumbarton Oaks. In December 1943, Cordell Hull spoke of “agencies for cooperation in economic and social activities brought within the framework of the international organisation.”11 By July 1944, this became “each specialised economic or social organisation or agency should be brought into relationship with the general international organisation,”12 the phrase that found its way into the Charter.

In a sense, the choice between alternative structures was determined even before the Dumbarton Oaks consultations of August–September 1944. Roosevelt began the series of conferences establishing the UN and the functional bodies with the subject of food and nutrition, in Hot Springs, Virginia, in May 1943, because he felt it would be easier to explain to domestic opinion the need for such international action. UNRRA was established in November 1943. The ILO gathered in Philadelphia in May 1944. The UN Monetary and Financial Conference took place in July 1944.

The timing and the outcome of the various conferences clearly suggest there was no master plan for the creation of what became the UN system. The ILO case is especially instructive as it was established in 1919 under a separate agreement as part of the League but largely autonomous. The United States was an active member of the ILO, and in the 1930s the New Dealers much appreciated the ILO’s approach to labor problems. Its unique tripartite structure (employers, workers, and governments) created almost 100 years ago in a fit of imaginative foresight has stood the test of time. Earlier, the State Department had considered the relationship of the ILO to the general international organization if the latter were to have an overall economic agency, but the Philadelphia gathering paved the way for the ILO to become the first UN specialized agency. It also foreshadowed some of the problems that were to emerge: “if the Philadelphia Declaration had been taken literally by those who voted for it, the ILO would have developed into the master agency among the emerging family of functional international bodies.”13

Dumbarton Oaks and San Francisco

Before and at Dumbarton Oaks, the Union of Soviet Socialist Republics (USSR) initially wanted the central organization to deal solely with political and security questions. Ambassador Gromyko demonstrated that 70 percent of the League’s work in the 1930s had focused on economic and social issues: if this were repeated in the new organization, attention would be diverted from what Moscow considered to be the more important responsibility of securing peace and security. For Washington and London, a satisfactory resolution of the differences with the USSR regarding the use of the veto in the Security Council and membership of the new organization were more important than economic issues, especially after the successful conclusion of Bretton Woods a few weeks earlier. A limited compromise between the USSR and the UK–US delegations at the end of Dumbarton Oaks on the veto issue enabled the Soviets to remove their opposition to including economic and social issues within the framework of the new organization.

Loveday and others were greatly disappointed with the outcome of Dumbarton Oaks, which significantly reduced the intended authority of ECOSOC compared to the original US tentative proposals. Although “history had taught the League that economic, financial, social and security concerns had to be woven together as much as possible,”14 the necessary institutional linkages were being lost. Bretton Woods had established the framework for postwar economic and financial relations, the UN would handle security, and the ILO was being re-launched. To counteract the emerging consensus on the postwar architecture, Loveday redoubled his efforts: the preparation of the second part of the report on Transition from War to Peace was speeded up for publication in early 1945, and he resumed lobbying his contacts in Washington and elsewhere.

There were some gains at San Francisco, but the essential architecture remained as agreed at Dumbarton Oaks. Three points are relevant. First, as a result of pressure from the smaller powers,15 ECOSOC’s status was elevated to that of a principal organ, the same as the Security Council and General Assembly, a clear indication of the importance that they would attach to the UN’s responsibilities for promoting economic and social progress. Second, San Francisco went a little beyond Dumbarton Oaks in expanding the powers of the General Assembly and of ECOSOC regarding economic and social issues. However, the conference did not, for reasons explained below, clarify or explain what those powers and functions really meant. Third, on the basis of the outcome of Dumbarton Oaks, San Francisco agreed, in Charter Article 57 (1) to arrangements whereby specialized agencies, established by “inter-governmental agreement” and with “wide international responsibilities … in economic, social, cultural, educational health and related fields” would be “brought into relationship” with the United Nations organization through agreements that would define the areas for mutual cooperation.

The implications of San Francisco

The creation of the United Nations in 1945 was an act of high statesmanship. However, in terms of development, it designed an institutional structure that failed to anticipate the needs of millions of people around the world, and which is now clearly failing to meet contemporary challenges.

The State Department and Treasury planners were preoccupied not with development but with preserving the liberal capitalist postwar order. As one prominent American political scientist observed early on, “the ground rules for international economic cooperation that were drawn up in the 1940’s under the leadership of the United States were aimed primarily at preventing actions found harmful by the major powers during the 1930’s, not at promoting practices helpful to the emerging nations.”16 A multilaterally agreed regime providing special treatment for poor countries was unheard of in those days.

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