At head of title: "Brookings Institution. United Nations Financing Project.""#2567"--handwritten on cove

Padelford, Norman J. (Norman Judson), 1903-1982

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Brookings InstitutionUnited Nations Financing Projectc/62 - 13October 15, 1962SOME OBSERVATIONS ON FUTURE COSTS AND SUPPORTOF THE SPECIALIZED AGENCIES RELATED TOTHE UNITED NATIONSByNorman J. PadelfordCenter for International StudiesMassachusetts Institute of TechnologyCambridge, Massachusetts1962TABLE OF CONTENTSI. Membership and Cost Patterns, 1946-1962 1II. Some Possible Future Trends in Specialized Agency Costs 2A. Assumption of Continued Present-Type Circumstances 3B. Possible Trend if There is Moderate Improvement inInternational Relations 4C. A Hypothesis of Major Improvement in Relationships 6D. Assumption of Deterioration in International Relations 7III. International Politics and Fiscal Realities 7IV. Ability to Pay and the Future Course of Specialized AgencyFinancing ilIMembership and Cost Patterns, 1946-1962A majority of the UN Members have belonged to the Specialized Agenciessince joining the UN. The exception to the general rule has been the Inter-national Maritime Consultative Organization, an agency of more limited concernthan some of the others. Forty-four states are currently members of IMCO. Thecurrent memberships of the various apencies are as follows:1Food and Agriculture Organization T6International Maritime Consultative Organization 44International Civil Avia- ion Organization T4International Labor Organization 82International Telecommunication Union 101UNESCO 100Universal Postal Union 100World Health Organization 101World Meterological Organization 102The United States, the United Kingdom, France, Italy and Canada, togetherwith most of the other Western states, are members of each of the agencies. TheSoviet Union and most of the Communist countries are now members of seven of thenine organizations. They do not participate in FAO or ICAO. The Soviet Uniondoes not pay more than 13 per cent of the annual assessed cost of any agency.The United States has been a contributing member of each of the agencies.Its assessment does not now exceed 32.51 per cent of the annual assessed costof any agency.A not unimportant positive factor in the more or less stable support ofthe agencies is the role of "vested interest" groups -- labor unions, educators,farmers, scientists, etc. -- in urging governments to contribute. These groups'Memberships are as of 1961. Not included in the list are the InternationalAtomic Energy Agency, the International Monetary Fund, the International Bank forReconstruction and Development, and the International Finance Corporation whichare in various ways supported differently than the other inter-governmentalagencies related to the United Nations.comprise special clienteles for the major agencies and have played, in varyingdegrees of course, an influential hand in at least the leading Western coun-tries.The modesty of the financial aspect of the Specialized Agencies is attestedby the fact that after sixteen years from the founding of the UN the total costof the nine agencies listed above does not exceed $65 million, an average ofless than $8 million per agency a year. Considering the useful functions whichmost of these agencies perform, this is relatively inexpensive public service.The growth pattern of the overall costs of these agencies has been on thewhole an even, steady one. Costs doubled between 1948 and 1958. Since thenthere has been an additional thirty-six per cent rise for the period from 1958to 1963. This is considerably less than the Regular Budget of the UN has risenduring the same time.Considering the number of international conferences which are held underthe auspices of these agencies, the services which they render, and the risingcosts of transportation, of materials, and of the services of experts and con-sultants used by them, this appears to be a fairly normal growth pattern. Ithas no sudden spurts or sharp cutbacks reflecting ill-considered programs orviolent disagreement among the Member states.IISome Possible Future Trends in Specialized Agency CostsOne might perhaps expect that there would be relatively little fluctuationin the future curve of Specialized Agency costs. This does not necessarilyfollow, however. Political clashes have repeatedly punctuated the delibera-tions of UNESCO and the ILO. And the fact that the Communist states refuse to-2--3-participate in FAO and ICAO further attests the inseparability of the functionalrole of international organization from political, ideological and strategicalconsiderations.No matter how well entrenched are the present programs of the agencies,their continuance under changing circumstances are open at all times to theintervention of political and economic factors that may lead to conflict or tocuts in budgets or payments. Hence, although the chances may on the whole bereasonably good that the future activities and support of these agencies willfollow in the same general trend line established in the past, this cannot betaken for granted or assumed to be the only possible course that will occur.What possible lines are there that the finances of the Specialized Agenciesmay take in the next ten to fifteen years? Are the expenses, and with them thenational assessments, likely to go up? Or are they likely to decline?What happens to the support of these agencies, and their costs, will bedetermined in large measure by the interplay of many forces and the generalnature of the international climate. It is not possible to predict what thelatter will be. But we may perhaps contemplate what might happen if certaintrends or types of relationships were to emerge. We shall suggest four possi-bilities.A. Assumption of Continued Present-Type CircumstancesOne might contemplate first what might happen if the international climatewere to continue much as it has been in recent years. This would imply theabsence of a major war, but more or less continuous cold war, repeated brushfire situations, mounting demands from the newer countries for increasingeconomic and technical assistance. One might also assume continuing confidencein the usefulness of the Agencies, at least to the extent now prevalent.~1~.~Under such circumstances it is conceivable that support would remainreasonably stable and that the past pattern of agency costs would continue togrow about as it has in the past ten years. Expenditures of most of the agenciesmight perhaps be held within or near their present levels, at least until thefinancial crisis arising from the Congo is overcome. Otherwise, stress presum-ably would be laid upon building up the Special Fund and government contributionsfor the Expanded Technical Assistance Program.Subsequently, one might possibly witness some further upward trend reflect-ing the effects of changing technology, the rising demands of states for ser-vices, and the appearance of new programs within the agencies. Still, one wouldexpect the total to remain below $100 million. For Member states view the costsof these agencies in relation to the overall costs of their participation in theUnited Nations, and these have of course been rising steeply in recent years.Concern over these mounting costs might lead a good many countries to opposelarge new outlays by the Specialized Agencies.A projection curve based upon such hypotheses is suggested in line "A" inFigure 1.B. Possible Trend if There is Moderate Improvementin International RelationsA second possibility for the future might of course be that a moderate im-provement in international relations over their present character would occurin the next decade and a half. This would assume that no new Suez or Congo-like crises would arise; that the newer and developing countries would makeprogress toward raising their standards of living and adjustment to modernconditions. This might also assume a diminution of the East-West conflict andsome evidence o- an increasing disposition to collaborate peacefully throughUnited Nations channels.FIGURE 1THE SPECIALIZED AGENCIESPAST AND THEORETICALLY PROJECTED EXPENDITURES.~~--- 9//1 10/ I//1~ -/ ~/ .~, - ~- ~~~I -~-'~. II 9'/6' 1997'!18'-/l ?11/ rl f i f'6/7') A -IPROJECTION "A" assumes continuation of 1961-62 conditions of no-war no-peace, plus no serious crisis of confidencein 1968-72 period.PROJECTION "B" assumes a moderate improvement in international political and economic conditions; increasing con-fidence in all agencies.PROJECTION "C" is drawn to suggest the general direction expenditures and assessments might take if a radicalchange toward much increased international collaboration were to occur.PROJECTION "D" assumes worsening international conditions leading to a major crisis sometime between 1963 and1972.160/40130i||O/A0100'707060A04030/PlO/00CB-U-----.A9D*,.* - - s -b-, IWI-6-In such circumstances one might possibly expect to see an easing of the UNfinancial situation and readiness on the part of the majority of Member statesto increase their support of expanding programs in the Specialized Agencies.This might then lead to a curve more nearly resembling line "B" in Figure 1.It would not be surprising under such circumstances to see the cost figureapproximating $100 million by 1967-70, thus doubling the outlay of 1958. Norwould it be unimaginable that the total might reach $120 million by 1972. Thiswould still be a relatively modest figure as government expenditures go.C. A Eypothesis of Major Improvement in RelationshipsDoubtful as it may now appear that international politics will take a turntoward much closer, more amicable relationships, with less tension, and a dis-position to greatly strengthen the United Nations and other institutions oforganized collaboration, one should consider nonetheless what might happenshould this transpire.It seems likely that in such an eventuality there would be a marked up-swing in the activities of functional-type agencies. This would inevitably besucceeded by rising costs. And presumably under such circumstances there wouldbe general readiness to support these expenditures either through increasedassessments or voluntary contributions. Idealists might visualize this asleading toward the ultimate creation of organs endowed with supranational powersand perhaps even supported by licensing or levy powers.Line "C" in Figure 1 is designed to suggest, in only very general andtheoretical terms, the kind of direction the cost curve might follow in sucha future.-7-D. Assumption of Deterioration in International RelationsA further possibility would be to assume that international conditionsinstead of improving will deteriorate in the next ten years. Under such cir-cumstances a major political or economic crisis might occur involving possiblywar on a large scale which the United Nations could not prevent or contain, andconceivably withdrawals from the United Nations.A similar trend might possibly occur if deeply conservative or reactionarypolitical forces were to seize control in several of the principal states,touching off heavy pressures to retrench on expenditures for internationalorganization or to withdraw from most of the organizations.Likewise, revenues could drop off if there were large defaults in paymentsdue to resentment among some of the principal financial supporters of theagencies at having to dance to whatever tune is piped by the one-state-one-votesystem.Although support of the Specialized Agencies might conceivably be slowerin dropping off than in the case of the general organization, a serious deteri-oration in relations would be bound to exert some bearish effects upon thefinances of the agencies.Projection curve "D" in Figure 1 attempts to suggest roughly what mightbe a trend line if such circumstances were to occur.IIIInternational Politics and Fiscal RealitiesThe foregoing projections are not put forward as estimates of what willreally happen. Nor do they attempt to suggest how far financial support ofthe Specialized Agencies might in fact be expanded in the next ten to fifteenyears.-8-These projections are simply roughed-out attempts to provide simplifiedimages of ranges of support that might be forthcoming if certain generalizedtrends in international relations were to develop. They take as their startingplace the extent of expenditure and support up to the present time. The questionof whether states would be willing or able to do more is another matter. Weshall consider future capacity to pay in another paper.International institutions as a rule tend to advance slowly and more orless along lines already marked out in one way or another. Politics can produceimpromptu changes and unforeseen advances at times, however.Thus, one must take as a starting place for estimating the future a ten-tency for past patterns of activity and support to project themselves alongwhat might be considered "normal" and generally similar pathways to what hastranspired in the past. At the same time, one must be prepared for unforeseenevents leading to new and different consequences--as has been the case withthe independence explosion in Africa, the Suez and Congo episodes with theirsequels in new forms of UN action, new magnitudes of UN expenditures, new rolesfor some of the Specialized Agencies, and new problems of financing.General concern with the wellbeing and future course of economic and poli-tical growth of the underdeveloped countries has produced willingness to supportin the 1960's a measure of technical assistance, international development aid,and "soft loans" that would have been quite unpredictable ten years ago. Tothe extent that this trend continues, enlarged costs must be anticipated andwith this the need for additional support.One consideration that must be kept in mind is that although each agencyprepares its own program and budget, the United Nations General Assembly canin fact hoist additional activities and thus increased costs upon the agenciesby actions taken in the Assembly.-9-Thus, the General Assembly, quite independently of the deliberations orrecommendations of the World Health Organization, for example, could call fora greatly stepped-up campaign to isolate by international medical collaborationthe causes of cancer; or to stamp out Asian influenza. Or, by its actions re-lating to the Expanded Program of Technical Assistance it may in effect neces-sitate some or all of the agencies extending their efforts in directions theyhad not planned to follow. By so doing the General Assembly or ECOSOC couldindirectly cause the measure of support needed to sustain the regular work ofthe agencies to be increased in order to care for the hidden costs of doingtwo tasks where they were originally geared for only one even though the Assemblymay vote increased allocations of funds from the Special Fund for the new work.A series of episodes demanding administrative, technical or educationalhelp, or some combination of these and other forms of aid, on anything like themodels of actions taken in Libya, the Congo, West New Gueinea, and in conjunc-tion with some of the newly independent countries that are not yet adequatelyprepared to "stand alone under the rigorous conditions of the modern world"--to quote the language used in 1919 for the mandated territories--may necessitatethe Specialized Agencies becoming involved in ranges of activity considerablybeyond the scale of operations in the 1950's. Extensive assistance from the UNagencies may be needed to help some of the countries remain independent or todevelop in peaceful, orderly and democratic directions.Although the "peace-keeping" tasks of the United Nations fall outside thesphere of the Specialized Agencies, the complementary nation-building operationmust involve in many ways the work and skills that are mobilized through theSpecialized Agencies.-10-The target goals for government support of EPTA and the Special Fund in1962--which are the primary vehicles for energizing collaboration in the UnitedNations Development Decade of the 1960's and 1970's--are $150 million. PaulHoffman, Director of the Special Fund, has estimated that no less than $2 billiona year is needed by the International Development Association for the next tenyear period. To achieve such an objective will require an entirely new conceptof UN financial support.Whatever happens in this direction is bound to have some residual effectupon the projection of costs of the Specialized Agencies. For as we have alreadysaid, they will be in the forefront of activity in the Development Decade. Andeven though their primary expenditures in this connection will be underwrittenwith funds recruited by the Special Fund, EPTA, the International Bank and IDA,their efforts in these directions may be productive of additional tasks or needseither in their routine lines of duty or otherwise that will necessitate a re-orientation of the scales of support needed for their work in the future.Finally, there is of course always the possibility that the Members of theUN may at any time agree to establish one or more additional Specialized Agenciesthat will need support for their work and thus increase the total required. Thisthey did in establishing, for example, the International Maritime ConsultativeOrganization in 1959, the International Atomic Energy Agency in 1953, and theInternational Development Association as an affiliate of the International Bankin 1960.Such actions, again not predictable far in advance, are capable of forcingan alteration in projections of costs based upon either past expenditures ortheoretical assumptions and subjective analysis.-11-One must be prepared to see the future carry the course of internationalcollaboration in new directions that may defy or negate advance predictions,especially when these are rested largely upon past patterns of behavior. Forwhile there may be tendencies for some history to repeat itself, it seldom doesso in exactly corresponding fashion.IVAbility to Pay and the Future Courseof Specialized Agency FinancingIs there any way, it may be asked, whereby a more accurate index can beobtained of the extent to which financial support of the Specialized Agenciescould be carried in the next ten to fifteen years than the crystal ball analysisin Section II above?It is possible that a multi-factor mathematical analysis of the variouselements entering into national income and the economic growth rates of statesmay yield useful data and inferences on the capacity of Member states to paythe costs of international activities five, ten, and fifteen years hence.The most secure basis, in our opinion, on which to make an analysis of thelevels to which financial support of the various components of the UN operation--i.e. the regular budget of the UN, the work of the specialized agencies, thevoluntary support programs, and peacekeeping operation--can be carried out isone which estimates caacity to pay, and then considers the costs of the variouscontingencies which could be borne by the given capacity.The computer program on UN financing which we have set up at M.I.T., andfrom which we have already received a good deal of data will, we hope, providesome useful clues in this direction. We shall report the results of this in alater memorandum.-12-To make realistic estimates of the points at which national support mightcome out on a year-by-year basis under various contingencies would require aconsiderable computer simulation, with estimates of costs of various activities,and consideration of the kinds of political events which might occur. This wehave not undertaken to do. But we believe this might be a useful exercise asa guide to policy thinking.

Future cost and support of the specialized agencies

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Future cost and support of the specialized agencies

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