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Are the OECD, IMF and the WTO really relevant organizations and what is the price for a country to ignore them?

By relevant I mean that they have the direct or indirect mechanism to impose sanction or they have influence in other organizations with those mechanisms. Also if they could benefit the countries in a substantial way.

OECD - http://en.wikipedia.org/wiki/Organisation_for_Economic_Co-operation_and_Development

The Organisation for Economic Co-operation and Development (OECD) (French: Organisation de coopération et de développement économiques, OCDE) is an international economic organisation of 34 countries founded in 1961 to stimulate economic progress and world trade. It is a forum of countries committed to democracy and the market economy, providing a platform to compare policy experiences, seeking answers to common problems, identify good practices and coordinate domestic and international policies of its members.

WTO - http://en.wikipedia.org/wiki/World_Trade_Organization

The World Trade Organization (WTO) is an organization that intends to supervise and liberalize international trade. The organization officially commenced on 1 January 1995 under the Marrakech Agreement, replacing the General Agreement on Tariffs and Trade (GATT), which commenced in 1948.[5] The organization deals with regulation of trade between participating countries by providing a framework for negotiating and formalizing trade agreements and a dispute resolution process aimed at enforcing participants' adherence to WTO agreements, which are signed by representatives of member governments[6]:fol.9–10 and ratified by their parliaments.

International Monetary Fund - http://en.wikipedia.org/wiki/International_Monetary_Fund

The International Monetary Fund (IMF) is an international organization that was initiated in 1944 at the Bretton Woods Conference and formally created in 1945 by 29 member countries. The IMF's stated goal was to assist in the reconstruction of the world's international payment system post–World War II. Countries contribute funds to a pool through a quota system from which countries with payment imbalances temporarily can borrow money and other resources. As of the 14th General Review of Quotas in late 2010 the fund stood at SDR476.8bn, or about US$755.7bn at then-current exchange rates.[1] Through this fund, and other activities such as surveillance of its members' economies and the demand for self-correcting policies, the IMF works to improve the economies of its member countries.[2]

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    How is “imposing sanction” a reasonable definition of relevance? – Relaxed Dec 11 '14 at 1:56
  • @Relaxed: English is not my first language, by "imposing sanction" I mean if those organizations can punish a country for not following a rule, so if an organization cannot punish it is not very relevant because countries would not mind about following rules. – S182 Dec 11 '14 at 3:04
  • @Relaxed: I read your answer and now I understand. – S182 Dec 11 '14 at 3:09
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All these are typical international organizations, albeit with very different goals and means to achieve those goals. What these organizations offer are mostly small positive incentives. They have carrots rather than sticks.

Just like international law in general, they are based on consent rather than on the ability to impose sanctions or wield power on member states. Because of this, international organizations (including the UN itself) often appear toothless but historically it was the only way to get everyone on board. It does certainly seem wasteful and ineffective at times but if you flip the question around, it's not obvious that threats, military expeditions or sanctions are all that effective either. In a world of sovereign states, there aren't that many alternatives.

Often, international organizations like the WTO are created to prepare new treaties and manage existing ones. So they are just as (ir)relevant as the treaties themselves and like treaties they are based on reciprocity and an “opt-in” principle. Countries enter into treaties and continue to obey them because they want other countries to do so as well, it's the other parties to the treaty that provide sanctions of sorts rather than the organization itself.

Concretely, the idea behind the WTO is that everybody benefits from increased trade and that most states will want in on it. The WTO is a forum where it's easier to get a broad agreement than in bilateral negotiations because everybody gets something they want and gives up something in return. Those interests are tied together in a way that makes breaking out of the system less attractive. State therefore follow WTO regulations because otherwise they risk losing access to foreign markets and hurting their own economy (or at least parts of it).

In the case of the WTO, there is also a dispute settlement mechanism so at the end of the road something that looks like a financial penalty for not following the agreed-upon rules. Interestingly, the “sanction” is not a fine that would be paid to the organization itself but the right for a country to punish another one by suspending the agreement and imposing extra duties on the first country's products. The multilateral (and asymmetric) nature of international law is quite clear in the structure of this mechanism.

Some states are also more dependent on international organizations than others. If you need IMF help, then you have no choice but to follow the advice of its experts. The IMF uses crisis situations to force reforms that it has little power to impose otherwise. On the other end of the stick, powerful states fund it because they use it as a soft power channel. Some aspects of the governance of these organizations are designed to secure the continued support of these powerful backers (think permanent seats in the UN security council, voting rights in the IMF board of governors, etc.)

Of the three, the OECD is possibly the “softer” one. It does not take binding decisions and has no way to impose anything. What it does provide is expertise, publications, technical norms, information exchange, etc. If you read the next paragraph of the Wikipedia article you mention, you will also learn that it had some role in the management of the Marshall plan so that was its “carrot” at the beginning.

When key interests are at stake, that's not always enough to reach an agreement (the WTO negotiations for example seem to have mostly stalled). Often international organizations are little more than tools for states to reach their goals and if a state is powerful enough (or has something useful to offer to powerful states), they can get away with bending the rules or not participating in this or that treaty easily.

In any case, the states are still the most important actors in the system. They go along because they benefit from it or they fear isolation and retaliation from other states but they cannot simply be forced to participate or to follow all the rules. Binding rules with direct effect and a strong enforcement mechanism (think European Union) are the exception rather than the rule in international law.

  • This could really use a TL;DR, IMHO – user4012 Dec 11 '14 at 16:14
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    @DVK The first paragraph does make the most important point. – Relaxed Dec 12 '14 at 12:25

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