December 15, 2009 | WebMemo on Democracy and Human Rights
Every three years, the member states of the United Nations negotiate how to divvy up the expenses of the U.N. regular budget and the peacekeeping budget. These negotiations center on the U.N. "scale of assessments," which assigns a specific percentage of the budget to each member state according to its "capacity to pay"--a calculation based primarily on its gross national income over a set period modified by various factors. The overall result is a highly tilted system with a handful of states footing the lion's share of U.N. costs but with minimal ability to shape the budget itself. This system has undermined efforts to reform the U.N. in ways that would improve efficiency, transparency, and accountability.
The Obama Administration should press strongly to adjust the scale of assessments for 2010-2012 to more equitably spread the financial burden among the member states. Reforming the U.N. assessment scale is a controversial topic, and the U.S. faces significant pressure to avoid it. However, the opportunity for assessment reform comes around only every three years, and the Fifth Committee of the General Assembly (which approves U.N. administrative and budgetary matters) is now working on the assessments scale for 2010-2012. The U.S. should seize this opportunity.
The Free-Rider Problem
The General Assembly, which establishes budget and policy priorities for the U.N., operates on an egalitarian one-country, one-vote basis. In the vast majority of cases, decisions by the General Assembly are adopted by consensus. When votes are held, most decisions are made by a majority of member states. However, decisions on important matters, such as the budget, require approval by a two-thirds majority, or 128 of the 192 members--even if those 128 member states contribute little to the U.N. budget.
The one-country, one-vote structure of the General Assembly creates a free-rider problem in which countries that pay little to the U.N. drive its financial decisions. Consider the following facts in table 1:
These percentages do not fully convey the disparities. Consider that the U.S. fiscal year 2010 budget requests $598 million to pay for the U.N. regular budget and over $2 billion for the U.N. peacekeeping budget. By comparison, the 54 countries assessed the lowest rate of 0.001 percent of the regular budget each would pay just over $25,000 per year based on the proposed 2010/2011 U.N. regular budget of $5.06 billion. The 35 countries that are assessed the lowest rate of 0.0001 percent of the peacekeeping budget would be asked to pay approximately $7,750 each for the $7.75 billion peacekeeping budget from July 2009 to June 2010.
These vast disparities undermine incentives to ensure that U.N. resources are used efficiently and as intended. Every outdated U.N. mandate needs someone to fulfill it, so eliminating activities could result in lost U.N. posts that are currently filled by one of these minimal contributor's citizens or the citizens of other countries in their regional or political grouping. Why should minimal contributors to the U.N. budget ruffle feathers? Supporting the status quo or a budget increase gains them allies from the countries that do not want to see their citizens lose a plum U.N. job. Besides, the cost is inconsequential to them. As a result, reform stalls.
This system can lead to perverse outcomes. For instance, the top 15 contributors to the U.N. (jointly assessed well over 80 percent of the U.N. budgets) are expected to pay even if the budget is approved over their objections. Indeed, the U.N. has actually voted several times in recent years to approve budgetary decisions despite the objections and concerns of major donors.
Ostensibly, U.N. assessments are tied to a country's ability to pay, which is based largely on its gross national income (GNI) over a period of several years. It is adjusted to discern a countries "capacity to pay" by incorporating factors like debt burden and per capita income. There are maximum and minimum caps on assessments for the U.N. regular budget of 22 percent and 0.001 percent. Assessments for the peacekeeping budget are based on those for the regular budget, but countries receive additional discounts ranging from a 0 percent discount for developed countries to a 90 percent discount for least-developed countries. These discounts are made up for by charging the five permanent members of the U.N. Security Council (China, France, Russia, the U.K., and the U.S.) a premium.
As table 1 illustrates, however, there are winners and losers under this scenario. Among the five permanent members of the Security Council, both China and Russia underpay based on nominal and purchasing power parity (PPP)-adjusted GDP and GNI data. The U.S. underpays based on nominal GDP and GNI but overpays based on PPP adjusted numbers. France and the U.K. are over-assessed based on both numbers. Based on either number, Japan is grossly over-assessed. The 128 lowest contributors are under-assessed. But the real beneficiaries are the wealthier developing countries like Brazil, China, India, Indonesia, Iran, and Turkey, whose under-assessment is preserved by their influence in key General Assembly political groupings like the G-77, NAM, and the OIC. Unsurprisingly, it is the G-77, led by China, that is calling for maintaining the current methodology.
Several Options for Reform
The divorce between obligations and decision-making is perhaps the greatest cause of the decades-long intransigence on U.N. reform. These problems are unlikely to be solved unless a stronger relationship between budget decisions and financial contributions can be achieved. Several options exist, including giving larger donors more say over budgetary matters by:
In addition, the scale of assessments should be revised. Some possibilities include:
A Critical Opportunity
Congress and the Obama Administration have both expressed a desire for U.N. reform. If the U.N. is to be a more effective, efficient, and accountable body, budgetary decision-making must be linked to financial responsibilities. One way is for the U.N. to adopt a system of voting on budgetary matters that gives major donors a greater say in budgetary decisions or move toward voluntary funding for activities currently under the U.N. regular and peacekeeping budgets. If that is not possible, at least the financial burden should be spread across U.N. membership more evenly by adjusting the scale of assessments in accordance with one or several of the above options.
The chance to reform the U.N. assessment system arises only once every three years: 2009 is one of those years, and the Obama Administration must not let this opportunity slip away.
Brett D. Schaefer is Jay Kingham Fellow in International Regulatory Affairs in the Margaret Thatcher Center for Freedom, a division of the Kathryn and Shelby Cullom Davis Institute for International Studies, at The Heritage Foundation and editor of ConUNdrum: The Limits of the U.N. and the Search for Alternatives (Rowman and Littlefield Publishers, 2009). Erica Munkwitz, an Administrative Assistant, in the Margaret Thatcher Center for Freedom, a division of the Kathryn and Shelby Cullom Davis Institute for International Studies at The Heritage Foundation, contributed to this paper.
United Nations, "Scale of Assessments for the Apportionment of the Expenses of the United Nations," February 13, 2007, at http://www.un.org/ga/search/view_doc.asp?symbol=A/RES/61/237 (December 15, 2009).
United Nations Charter, Article 18.2.
United Nations, "Scale Implementation of General Assembly Resolutions 55/235 and 55/236," December 27, 2006, at http://daccess-dds-ny.un.org/doc/UNDOC/GEN/N06/684/31/PDF/N0668431.pdf?OpenElement (December 15, 2009).
The G-77 was established in 1964 by 77 developing countries. The G-77 seeks to coordinate, articulate, and promote the economic interests of developing countries by leveraging their "joint negotiating capacity on all major international economic issues within the United Nations system." The G-77 offers resolutions and decisions in the General Assembly, its committees, and various U.N. bodies and specialized agencies. It also produces joint declarations and statements on U.N. reform.
The NAM was founded in 1961 to ensure "the national independence, sovereignty, territorial integrity and security of non-aligned countries" in their "struggle against imperialism, colonialism, neo-colonialism, racism, Zionism, and all forms of foreign aggression, occupation, domination, interference or hegemony as well as against great power and bloc politics." Ostensibly, the NAM sought to distance members from the United States and the Soviet Union during the Cold War. In reality, most NAM members were sympathetic, if not aligned, with the Soviet Union. The end of the Cold War brought an end to the original stated purpose of the NAM. In recent years, it has become most notable as a vehicle to disparage American policies--led by Iran, North Korea, Sudan, Venezuela, and current NAM chairman Cuba.
The OIC was established in 1969 to "strengthen solidarity and cooperation among Islamic States in the political, economic, cultural, scientific and social fields." The OIC is also strongly focused in its opposition to Israel and includes in its charter a pledge in "support of the struggle of the people of Palestine, to help them regain their rights and liberate their land."
United States Department of State, "Congressional Budget Justification Fiscal Year 2010," p. 578, at http://www.state.gov/documents/organization/123413.pdf (December 15, 2009).
Press release, "General Assembly Adopts Peacekeeping Budget of Nearly $7.8 Billion for Period 1 July 2009 to 20 June 2010," United Nations, June 30, 2009, at http://www.un.org/News/Press/docs/2009/ga10841.doc.htm (December 14, 2009).
The least-assessed countries are generally members of groups like the G-77, NAM, and OIC and use their membership to gain support from the entire group to greatly influence or block efforts to reform the U.N. to reduce waste, corruption, and inefficiency. For a more in-depth discussion, see Brett D. Shaefer, "Who Leads the United Nations?," Heritage Foundation Lecture No. 1054, December 4, 2007, at http://www.heritage.org/Research/InternationalOrganizations/hl1054.cfm.
See Brett D. Schaefer, "The Status of United Nations Reform," Heritage Foundation Lecture No. 966, October 3, 2006, at http://www.heritage.org/Research/InternationalOrganizations/hl966.cfm; Brett D. Schaefer, "The U.S. Should Oppose the Largest Budget Increase in U.N. History," Heritage Foundation WebMemo No. 1741, December 13, 2007, at http://www.heritage.org/Research/InternationalOrganizations/wm1741.cfm; Brett D. Schaefer, "Congress Should Withhold Funding for Spendthrift U.N.," Heritage Foundation WebMemo No. 1786, January 29, 2008, at http://www.heritage.org/Research/InternationalOrganizations/wm1786.cfm.
Report of the Secretary-General, "Scale of Assessments for the Apportionment of the Expenses of United Nations Peacekeeping Operations Implementation of General Assembly resolutions 55/235 and 55/236," General Assembly document A/61/139, 61st Session, July 13, 2006, particularly Annex 1.
Lydia Swart, "Finding Agreement on Member States' Assessments Complicates Budget Approval," Center for UN Reform Education, November 10, 2009, at http://www.centerforunreform.org/node/410 (December 14, 2009).
For additional ideas, see Brett D. Schaefer, "Keep the Cap on U.S. Contributions to U.N. Peacekeeping," Heritage Foundation Backgrounder No. 2067, September 6, 2007, at http://www.heritage.org/Research/InternationalOrganizations/bg2067.cfm; Brett D. Schaefer, "Enough Reports: More Action Needed on U.N. Reform," Heritage Foundation Backgrounder No. 1988, December 8, 2006, at http://www.heritage.org/Research/InternationalOrganizations/bg1988.cfm; Brett D. Schaefer, "Critical Reforms Required for U.N. Peacekeeping," Heritage Foundation Backgrounder No. 2313, note 12, at http://www.heritage.org/Research/InternationalOrganizations/bg2313.cfm#_ftnref12; Brett D. Schaefer and Janice A. Smith, "The U.S. Should Support Japan's Call to Revise the UN Scale of Assessments," Heritage Foundation WebMemo No. 1017, March 18, 2006, at http://www.heritage.org/Research/InternationalOrganizations/wm1017.cfm.