RESTRUCTURING NEOLIBERALISM AT THE WORLD HEALTH ORGANIZATION

Nitsan ChorevDepartment of Sociology

Brown University

ABSTRACT. Most descriptions of the dissemination of neoliberal economic policies since the 1980s overlook the significant contribution of international organizations to their making. The scholarship often regards international organizations as passive transmission belts that merely comply with the demands of their member states. Scholars who do identify the influential role of international organizations consider them to be enthusiastic supporters of the neoliberal project. There were cases, however, when international organizations were opposed to the neoliberal reforms imposed from above. This paper draws on the experience of the World Health Organization (WHO) to show that in the process of adapting to the emerging neoliberal regime, international bureaucracies actively restructured this regime in accordance with their own institutional cultures. Some neoliberal prescriptions were successfully transmitted, but others were transformed, with the result that the global regime was hardly monolithic and included elements that were introduced by the international bureaucracies themselves. In developing this argument, the paper identifies the adaptive strategies that allow international bureaucracies, in spite of their vulnerability to external forces, to incorporate their own organizational agendas into what has consequently become a more heterogeneous global neoliberal regime.

INTRODUCTION

The ongoing global financial crisis and current attempts to save the neoliberal

political-economic system from itself have brought renewed attention to the institutions

that have established and reproduced neoliberal economic reasoning since the 1980s.

When studying the spread of neoliberalism, much has been said about the role of

international financial institutions – the World Bank, the International Monetary Fund

(IMF) and the General Agreement on Tariffs and Trade / World Trade Organization

(GATT/WTO) – in pressing countries into compliance with the new world order. Other

international organizations, including the specialized agencies of the United Nations

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(UN), have also been influential in shaping countries’ practices by advocating policies

that were compatible with neoliberal thinking.

In considering the origins of the neoliberal prescriptions advocated by

international organizations the literature has typically regarded these organizations either

as passive vectors subject to the demands of their member states or, when actively

participating, as enthusiastic supporters of the neoliberal project. In contrast, this paper

argues that in the process of adapting to the emerging neoliberal regime, international

bureaucracies actively restructured it in accordance with their own institutional cultures,

which were not necessarily compatible with the original neoliberal principles. Some

neoliberal prescriptions were successfully transmitted, but others were transformed, with

the result that the global regime was hardly monolithic or coherent and included elements

that were introduced by the international bureaucracies themselves to protect their

ideational and material interests.

In short, this paper highlights the endogeneity of global regimes (Halliday and

Carruthers 2009), in which international organizations also participate and are able to

transform the regimes they become part of. Given the dependence of international

organizations on their member states, especially on the wealthy ones, it is far from

obvious that international bureaucracies can participate in the making of the global

regime. Therefore, this paper identifies the adaptive strategies available to international

organizations that enable them to incorporate their own interests into what consequently

becomes a more heterogeneous global regime. These alterations also offer new

perceptions regarding the diversity found in neoliberal policies across states.

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The paper explores the restructuring of a global neoliberal logic in line with

international organizations’ own institutional cultures by analyzing one UN agency, the

World Health Organization (WHO). The WHO experienced severe financial, authority

and legitimacy crises in the 1980s with tightened neoliberal pressures on international

organizations. The WHO bureaucracy responded to these crises by adopting neoliberal-

compatible policies. While embracing economic reasoning, prioritizing cost-effective

programs, and accepting market-driven solutions and business-friendly arrangements,

however, the WHO bureaucracy was also able to strategically reinterpret the neoliberal

prescriptions so that the new policies incorporated the bureaucracy’s own goals. These

included calling for greater financial investment in health, prioritizing the delivery of

high-quality essential care to all while maintaining a focus on infectious diseases

affecting the poor, and supporting access to generic AIDS drugs and the regulation of the

tobacco sector. In the following two sections I develop an argument on the ability of

international organizations to shape global regimes through adaptive strategies. I then

describe the WHO’s strategic response to the rise of neoliberalism. I conclude by

identifying additional implications of this study.

THE NEOLIBERAL TURN & INTERNATIONAL ORGANIZATIONS

Neoliberal economic theories were first incorporated into a dominant political

program in Chile after Augusto Pinochet’s coup in 1973, in the United States under

President Ronald Reagan and in the United Kingdom under Prime Minister Margaret

Thatcher. Specific policies informed by the neoliberal ideology were later embraced by

many other governments, independently of their political inclinations or their countries’

level of economic development (Harvey 2005; Sewell and Evans forthcoming). As a

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political ideology, neoliberalism offered a number of fundamental economic maxims,

including faith in the efficiency of the market and distrust of most governmental

interventions (Harvey 2005, pp. 2-3). More broadly, neoliberal thinking introduced a

conceptual reductionism of social wellbeing into economic development (Somers 2008),

which allowed for the spread of neoliberal maxims into both economic and non-economic

realms of governance. This neoliberal orientation called for policies that allowed for open

international markets, reduced barriers to the flow of private capital investment, limited

the role of government in the economy, and led to budget cuts, deregulation or

privatization of public services, including in the realms of education and health.

Some scholars of neoliberalism have emphasized its hegemonic, all-

encompassing nature. David Harvey (2005, p. 3), for example, wrote: “There has

everywhere been an emphatic turn towards neoliberalism in political-economic practices

and thinking.” Pierre Bourdieu (1998), in turn, spoke of neoliberalism as a “‘strong

discourse’ - the way psychiatric discourse is in an asylum, in Erving Goffman’s analysis”

(see also Gill 1995; Somers and Block 2005). Alongside these totalizing images of

neoliberalism, other scholars have shown growing appreciation to the diversity one can

find across “actually existing neoliberalisms” (Brenner and Theodore 2002).

This diversity has been most commonly understood as deviation by states from an

existing regime imposed from above, with the literature highlighting the inconsistency in

the implementation of neoliberalism at the national level (Fourcade and Babb 2002;

Prasad 2006; Hanley, King, and Tóth 2002; Evans and Sewell forthcoming). As Brenner

and Theodore (2002, p. 361) summarize, “Neoliberal programs of capitalist restructuring

are rarely, if ever, imposed in pure form, for they are always introduced within politico-

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institutional contexts that have been molded significantly by earlier regulatory

arrangements, institutionalized practices, and political compromises.” Fourcade and Babb

(2002, p. 536) similarly suggest that, “the emergence and path of the neoliberal policy

regime was socially constructed through the mediation of national institutions and

culture.” While allowing for divergence across states, therefore, these accounts still

adhere to the view that, at least at the global level, a uniform neoliberal regime exists.

More recently, what was viewed as divergence from a singular set of ideas and policy

prescriptions is now understood by some as the diversity of the neoliberal regime itself,

with neoliberalism considered a plural set of ideas and including a variety of distinct

neoliberal constellations (Plehwe, Walpen, and Neunhöffer 2005, pp. 2-3). This view

allows for neoliberal plurality also at the global level, but the empirical and analytical

foci remain on the making of global hegemonic projects and their diverse constellations

across states (Plehwe, Walpen, and Neunhöffer 2005).

In studies that look at how neoliberal policies have been imposed on states from

above, international organizations play a particularly significant role. Neoliberalism is

considered a global project because it was spread across the globe but also because it was

orchestrated and coordinated at the global level, through meetings, conferences,

international laws, conditional loans and so on (Cox 1986; Halliday and Carruthers 2009;

Campbell and Pedersen 1996). Scholars have particularly emphasized the coercive and

normative roles of international organizations in imposing neoliberal prescriptions on

developing countries. In the wake of a debt crisis that broke out in 1982, first in Mexico

and then the entire Global South, countries were offered much-needed help financing

their debts if they entered into agreements with the IMF and the World Bank, but these

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lending agreements were conditioned on market-liberalizing policy reforms, including

fiscal discipline, reordering public expenditure priorities, tax reforms, privatization of

public enterprises, trade liberalization, and deregulation (Babb forthcoming; also: Wade

and Veneroso 1998; Brune, Garrett, and Kogut 2004; Babb and Buira 2005; Chorev and

Babb 2009). Multilateral trade negotiations under the auspices of GATT and later the

WTO also obligated developing countries to open their markets to exports and foreign

investment (Chorev 2007). Other international organizations, such as the United Nations

Commission on International Trade Law (UNCITRAL) (Halliday and Carruthers 2009)

and the International Labor Organization (Standing 2008), have also been influential in

advocating homogenizing neoliberal-compatible policies.

Many of these accounts consider international organizations to be acquiescent

receivers and passive vectors of existing policy prescriptions, who play no role in the

construction of these policies before they are transmitted elsewhere (Harvey 2005;

Chorev and Babb 2009). Maybe most explicitly, Peter Gowan (1999, p. ix) asserts that

global neoliberalism has been driven “by the enormous political power placed in the

hands of the American state and of US business through the particular type of

international monetary system and associated international financial regime that was

constructed – largely by the US government – in the ashes of the Bretton Woods system.”

Others similarly describe how the “Bretton Woods institutions… were subsequently

transformed into the agents of a transnational neoliberalism and were mobilized to

institutionalize this extension of market forces and commodification in the Third World”

(Brenner and Theodore 2002, p. 350).

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In other studies, on the contrary, international organizations are considered active,

and often central, participants in the construction of the homogenous regime (Cox 1986;

Halliday and Carruthers 2009; Abedlal 2007). Robert Cox’s neo-Gramscian analysis, for

example, emphasizes a process of “consensus formation” in which “central agencies of

[major advanced capitalist] states… interact with each other, sometimes through formal

institutions like the IMF, the World Bank, and the OECD with their own autonomous

bureaucracies” (Cox 1986, p. 259, emphasis added). Scholars informed by organizational

sociology attribute even more significance to international bureaucrats. Sarah Babb’s

(2009) analysis of the World Bank’s embrace of market-liberalizing reform, while clearly

privileging the influence of the US government, also considers changing intellectual

fashions among economists and, importantly, the bank’s “overriding interest in

perpetuating [its] own survival” (Babb 2009, p. 70). Notably, Babb’s analysis implies an

over-determined situation in which the position of the different actors – US politicians,

economists, and World Bank officials – have all converged in support of neoliberal

reforms.1 Rawi Abdelal’s analysis of the IMF’s promotion of capital account

liberalization is even more provocative. According to Abdelal (2007), the call for capital

liberalization came from “within the management of the Fund itself” (p. 138), while the

US Treasury Department was indifferent to the IMF’s initiatives and Wall Street financial

firms were largely uninformed of them. In these and similar studies (e.g., Barnett and

Finnemore 2004), international bureaucracies are an integral part of what has become

1 This potential convergence between economists, US officials and the World Bank is not unlikely. As others have shown, international organizations are often influenced by Western perceptions through US-trained experts who hold highly-ranked positions in the organizations or serve as influential advisors (Chwieroth 2008). According to Harvey (2005, p. 54), “The US research universities were and are training grounds for many foreigners who take what they learn back to their countries of origin… as well as into international institutions such as the IMF, the World Bank, and the UN.”

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known as the “Washington consensus” (Williamson 1990), which favors market-

dominated models. The reference to a consensus is indicative of the assumption – clearly

shared by scholars who identify international bureaucracies as active players – that

international officials have enthusiastically shared and endorsed the neoliberal principles

also advocated by US officials. Hence, scholars who provide an active role to

international bureaucrats still expect policy outcomes to conform to neoliberal principles

as the position of international officials is understood to be rigidly faithful to the

neoliberal logic.

In this paper I argue that while contributing to the spread of the neoliberal

ideology across the globe, international bureaucracies have not served as passive

transmission belts; moreover, as active participants, they were not consistently supportive

of the global neoliberal project. Instead, international bureaucracies have taken

authorship of the policies they advocated, adopting a neoliberal-compatible agenda that

would also fit their own organizational interests and considerations, which were

potentially in conflict with neoliberal prescriptions. The result was that, also at the

international level, a variety of “actually existing neoliberalisms” evolved, with each

neoliberal version being a reflection of the institutional site in which it has emerged.

The next section analyzes the conditions and strategies that allow international

bureaucracies to restructure neoliberalism in ways that fit their own organizational

interests.

RESTRUCTURING NEOLIBERALISM

International bureaucracies influence global policies that are then transmitted to

the national level only if they have autonomy to develop their own interests and capacity

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to promote them, even when those interests clash with the demands of member states. On

the question of autonomy, theories of the state in political sociology have long benefited

from the realization that state bureaucrats develop an inherent interest in the functioning

of the government and may affect policy outcomes (Block 1977; Evans, Rueschemeyer,

and Skocpol 1985) and theories of organizations have similarly shown that organizations

have interests that are independent of the interests of their stakeholders (Albert and

Whetton 1985; Dutton and Dukerich 1991; Glynn 2000). A similar theoretical perception

is useful for analyses of international organizations as well.2 In contrast to the most

prevalent sociological views on international organizations, these organizations are not

the embodiment of a global “cultural core” (Krücken and Drori 2009, p. 17; Boli and

Thomas 1997; Meyer et al. 1997), and do not simply serve as “boards of directors for

ruling states” (Boswell and Chase-Dunn 2000, p. 238). Rather, as both constructivist and

principal-agent theories in international relations have convincingly argued, international

bureaucracies are purposive actors, with independent interests and perceptions that

cannot be reduced to the demands of their member states (Barnett and Finnemore 2004;

Nielson and Tierney 2003; Hawkins et al. 2006).

The interests of international bureaucracies are both material and ideological.

International bureaucracies’ material goals include protecting their autonomy to make

decisions, possessing adequate authority to act based on those decisions, and having

sufficient funds to act effectively. Many of the scholars who assign a relatively active

2 However, the significantly different relations between international organizations and their member states compared to the relations between states and social forces, particularly capital, make most theories of the state not applicable for the analysis of international organizations. I draw, instead, on sociological theories of organizations that have similarly conceptualized the relations of organizations with the environment. For the most systematic articulations of international organizations as organizations see Barnett and Finnemore (1999; 2004).

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role to international organizations in the construction of global policies tend to focus on

material interests alone. For example, in their analysis of the role played by the

UNCITRAL secretariat in shaping a single global standard on national insolvency

systems, Halliday, Block-Lieb, and Carruthers (2009) identify the secretariat’s need for

legitimacy and its interest in expanded authority as the factors that motivated the

secretariat to reach a consensus among the different representatives. Their analysis omits,

however, the likely possibility that the secretariat had an independent position regarding

the substance of global bankruptcy rules and that this independent position played a role

in the kind of compromise they advocated.

In addition to material interests, international bureaucracies also hold ideational

goals; specifically, an independent perception of the organization’s mission and an

independent understanding of the best way to achieve that mission (Albert and Whetton

1985; Jepperson 1991). These ideational goals may have numerous origins. Some are

historical and therefore path-dependent, such as the organization’s foundational texts

(Harris and Ogbonna 1999); others are contemporary and potentially path-breaking, such

as trends in a relevant professional field (Glynn 2000). Ideational goals, even more than

material goals, raise the prospects that a bureaucracy will not support the same policy

prescriptions as its member states.

However, international bureaucracies’ capacity to act according to their

autonomous institutional agendas is compromised by their dependence on their member

states. Like states’ dependence on capital and voters and organizations’ dependence on

their shareholders, international organizations, too, are heavily dependent on external

forces, particularly for funds (resource dependence), majority of votes (procedural

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dependence), and legitimacy (normative dependence). Resource dependence stems from

the fact that international organizations need financial resources to survive and

accomplish their goals and that most of them rely on external actors to provide those

funds (Pfeffer and Salancik 1978; DiMaggio and Powell 1991; Babb 2009). Because

contributions to UN agencies are determined mostly based on member states’ capacity to

pay, they have been disproportionately dependent on the United States and other wealthy

countries. International organizations are procedurally dependent because they require a

majority of voting members to agree on policies and programs and they are therefore

vulnerable to the power of members to withhold their votes. A one-country/one-vote rule,

which is common in UN agencies, has created procedural dependence on the majority of

poor countries, which could potentially counter-balance the resource dependence on the

few wealthy countries. Finally, to generate normative support, an organization’s

presentation of itself, its mission, and its programs has to be accepted as legitimate by all

member states (Suchman 1995; Hurd 2007). To attain legitimacy, international

organizations are expected to conform to three potentially contradictory expectations:

their initiatives and programs have to follow contemporary global norms and rules, they

have to be consistent with their official mandate, and they have to be seen as neutral

rather than serving the interests of particular countries.

Such dependence on external forces raises doubts regarding the capacity of

international bureaucracies to act according to their autonomous interests when those

clash with external demands. Most analyses therefore expect international bureaucracies

to submit to external pressures and comply with those demands; they also expect that

attempts at resistance would normally fail. In contrast, I show that when international

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bureaucracies find external demands to be incongruous with their goals, the leadership

and staff – those who plan the budget, rank program priorities, author position papers,

formulate arguments, and advocate policies to its member states – try to minimize the

potential tension between the two agendas not by “passive” acts of submission or

resistance but through “active” or “strategic” responses.

Drawing on the work of Christine Oliver (1991; also Barnett and Colemen 2005;

Weaver 2008), I suggest that international bureaucracies seek strategies that allow them

to adapt to external pressures in a way that avoids the kind of compliance that would lead

to the sacrifice of their own interests but that also does not amount to confrontational

resistance. These adaptive strategies involve an attempt to restructure or redefine the

meaning of the external demands (Oliver 1991, p. 159). In cases of strategic compliance,

the international bureaucracy endorses the external ideology only after giving it a

meaning that, while compatible with external demands, could be reconciled with the

organization’s independent goals. By altering the meaning of the demands before

adhering to them, the organization can join the external ideological regime without

undermining its own interests. In cases of strategic resistance, the international

bureaucracies accept, but do not adhere to, the external principles. In such cases,

international bureaucracies do not reject the dominant logic but rather rely on that very

logic to justify refusal to comply. By reframing the dominant logic so that the

organization is no longer expected to conform to it, resistance is achieved without risking

retaliation. This capacity for strategic restructuring – the translation of exogenous

pressures to policies that also conform to the organizations’ own institutional culture – is

entirely compatible with the view of political institutions as relatively autonomous (Block

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1977) and helps explain their capacity to maintain some autonomy. It is also compatible

with the post-structuralist view that such relative autonomy is manifested in the

adherence to an independent logic that is established and reproduced internally (Bourdieu

1987).

When international bureaucracies attempt such strategic responses and are

successful, they become mediating forces, rather than passive vectors, and the policies

that are then spread from the international organization to member states are restructured

versions of the original prescriptions. This, I argue, is what happened to international

organizations, including the WHO, under neoliberal pressures. While becoming part of

the global neoliberal logic, the WHO bureaucracy employed adaptive strategies in

attempt to fit that logic to its own institutional agenda. In this way, the WHO was able to

create its own variance of neoliberal policies. The capacity of international bureaucracies

to create divergent versions of neoliberalism led to a plurality of neoliberalisms at the

international level, and possibly contributed to the plurality of neoliberalisms also across

states.

STUDYING THE WORLD HEALTH ORGANIZATION

The spread of neoliberalism across international organizations has attracted only

scarce scholarly attention. The World Bank, the IMF and the WTO are often described as

central carriers of neoliberal prescriptions, but only recently has their own adherence to

neoliberal prescriptions been scrutinized (Babb 2009; Abdelal 2007). Other international

organizations, including UN agencies, have been largely ignored. Although not as

commanding as the international financial institutions, UN agencies matter greatly to

developing countries. Through financial support, technical assistance, the advocacy of

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policies and the initiation of programs, UN agencies influence many domestic policies in

fundamental areas such as human rights, labor, education, health and the environment

(Meyer et al. 1997; also Torfason and Ingram 2010; Hafner-Burton and Tsutsui 2005;

Schofer and Meyer 2005).

Moreover, the study of a UN agency can shed light on the means by which

international organizations have participated in the creation and dissemination of the

neoliberal project in a way that investigations of the World Bank, IMF or the WTO may

not. First, it provides an opportunity to observe an international organization that was not

among the makers of the Washington consensus. Second, important institutional

differences between international financial institutions and UN agencies suggest that we

should not apply what we know about the former to the latter. Finally, the study of UN

agencies extends the analysis of the spread of neoliberalism beyond narrow economic

issues to explore a wider range of development issues.

Among UN agencies, the WHO is of particular interest. As the specialized agency

responsible for global health policies and programs, the WHO is one of the largest

agencies in its budget, scope of mandate and actual programs. In turn, the influence of the

WHO on national health policies, especially in poor countries, has been apparent, as

WHO technical and operational assistance has substantial impact on which populations

are provided with care, what types of treatments are recommended, and so on. Global

health policies, moreover, have become a central site for implementing neoliberal

reforms and thus were of growing interest to World Bank economists and others. As a

result, the WHO was directly affected by the spread of neoliberal sentiments, and is

therefore a particularly vibrant site for studying the spread of neoliberalism at the

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international level. Drawing on evidence from primary archival sources, public

documents, and interviews, the remainder of this paper documents the strategic response

of the WHO to external neoliberal demands.3

NEOLIBERALISM AT THE WHO

The WHO’s institutional origins of dependence and agency

The WHO was established in 1948 as a specialized agency of the United Nations

responsible for directing and coordinating authority for international public health. The

WHO’S three-layered organizational structure is made of the World Health Assembly,

the Executive Board, and a secretariat headed by a director-general.4 The World Health

Assembly (WHA) is where country representatives meet once a year to establish policy

and approve the organization’s programs and budget. The Executive Board prepares for

the Assembly, including commenting on the program and budget estimates prepared by

the director-general, and it oversees the implementation of the decisions taken by the

Assembly. The Board, which currently has 34 members, meets twice a year. While

delegates to the Assembly are representatives of their designated states, delegates to the

3 For the empirical analysis I rely on primary archival sources and public documents that I collected at the library of the WHO in Geneva, the library of the regional office of the WHO in Washington, DC, and from the national archives in the US, the UK and Canada. Particularly helpful were the topical minutes of the annual World Health Assemblies and biannual Executive Board meetings, as well as Congressional Hearings in the US. I observed one World Health Assembly, in May 2008. Between March 2008 and May 2009, I conducted 24 semi-structured interviews (each 1-2 hours long), in Geneva, New York and Washington, DC. The interviews were with officials of the WHO (from a number of programs and initiatives, including Drug Action Programme, Quality Assurance and Safety of Medicines, Roll Back Malaria, HIV/AIDS, and Tobacco Free Initiative), the World Bank, UNAIDS, the Global Fund to Fight AIDS, Tuberculosis and Malaria, a number of public-private partnerships, local and transnational health activists, and representatives of companies and their associations. 4 The discussion here focuses on the WHO headquarters in Geneva, Switzerland. The WHO member states are also divided into six geographical regions, each having a regional office.

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Board, which are elected by the Assembly, are expected to act as experts on behalf of the

whole Conference. The secretariat carries out the organization’s activities, conducts

studies and writes reports, and otherwise assures its functioning. The director-general,

who heads the secretariat, is nominated by the board and elected by the assembly. One of

the most significant responsibilities of the director-general is to suggest the annual

budget, which identifies the organization’s priorities and commits member states to

provide the funds to pursue them (WHO 1958; Lee 2009).

This organizational structure makes the WHO heavily dependent on its member

states for their resources, votes and normative support. For resources, the WHO has

traditionally relied on the mandatory contributions of member states, which are calculated

according to their ability to pay. This has inevitably created disproportionate dependence

on wealthy countries, which pay the bulk of the budget. On the other hand, these are

mandatory contributions, suggested by the Director-General and approved by a majority

vote in the Assembly. These procedures have effectively curbed the ability of wealthy

member states, which are the minority, to use their payments as a bargaining leverage.

Since the 1980s, however, there has been a dramatic shift from mandatory to voluntary

contributions, provided by wealthy nations or private foundations for specific purposes

(Lee 2009). Since voluntary contributions bypass the Assembly, they have greatly

increased the resource dependence of the WHO on the relatively small number of

wealthy members.

Regarding votes, a one-country/one-vote rule at the Assembly has established,

following decolonization, procedural dependence on the large number of members from

the developing world. The Executive Board, where members are elected to reflect states’

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geographical and economic diversity and where they are expected to serve in their

individual capacity, has created an additional layer of procedural dependence that is

similarly divorced from resource dependence. Starting in the 1980s, however, developing

countries found it increasingly difficult to maintain a unified coalition of interests. This

was partly because the structural dependence of poor countries on rich countries

intensified with the rise of a global economy and made developing countries reluctant to

vote against the position of rich countries or multinational companies. Finally, to attain

legitimacy, the WHO was expected to conform to global norms and principles established

elsewhere while maintaining neutrality and following the organization’s original

mandate.

In short, the WHO was heavily dependent on external forces, and since the 1980s

has been particularly dependent on wealthy countries. But the WHO’s position cannot be

reduced to the need to satisfy the demands of member states. The WHO bureaucracy had

independent material and ideational goals that it vigorously pursued. The ideational

preferences of the WHO bureaucracy have often been informed by the WHO

Constitution, which defines the objective of the WHO to be “the attainment by all

peoples of the highest possible level of health.” This objective has established two

commitments at the core of the organization’s understanding of its mission: to universal

access to health services and to quality of the health services provided. The scope of that

commitment and the understanding of how best to pursue it depended on, and could be

transformed by, the staff’s professional public health ethos and expertise (Weaver and

Leiteritz 2005; Chwieroth 2008).

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Because the WHO bureaucracy holds independent goals, it is not neutral toward

exogenous influences and its position depends on whether or not the imposed logic is

compatible with its own preferences. Dependence has prevented the WHO bureaucracy

from acting irrespectively of members’ demands, but a clash with independent goals or

principles has provided motivation to avoid them. One such clash occurred with the

emergence of neoliberal policies. In the late 1990s, following a decade-long period of

crisis, the WHO adopted strategies in attempt to fit to the new environment while still

protecting its organizational culture. The next two sections describe the crisis and provide

a detailed account of the WHO’s attempts of restructuring rather than complying with the

neoliberal logic.

Initial Crisis

In the 1980s, the US government, under the leadership of President Ronald

Reagan and with pressure from a weary Congress, intensified its attempts to root out the

so-called “Third World radicalism,” namely, developing countries’ call for a new

international economic order (NIEO) that would lead to greater economic equality

between industrializing and industrial countries (Krasner 1985; Murphy 1984). The

criticisms aimed at UN initiatives and programs that followed the NIEO logic intensified

with the increasing dominance of neoliberal thought, which promoted the self-efficiency

of the market and was thus directly opposed to the NIEO principles of economic

nationalism and the UN’s focus on social development. Critics in the United States also

targeted what they considered irresponsible budget growth and managerial incompetence

in UN agencies. Consequently, the US government pressed for changes that would both

weaken the ability of UN agencies to act and weaken the influence of developing

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countries over those UN agencies. The WHO, which in the past had been highly

regarded, was now resented for its NIEO-compatible policies and exposed to US attacks.

A transition period ensued, in which the WHO suffered severe authority, financial and

leadership crises.

An authority crisis developed when the World Bank became involved in public

health programs and advocated neoliberal policies that directly competed with and often

contradicted the WHO’s own policies. The World Bank’s emergence as a competing

health agency was one part of the much larger transformation, described above, in which

the Reagan Administration relied on the World Bank and the IMF to introduce the

“magic of the marketplace” to developing countries (Livingston 1992; Adams 1993;

Babb 2009).5 The new World Bank orientation made it increasingly interested in the

reorganization of public sectors, including the health sector, and the Bank sharply

increased its loans for health restructuring, the total sum of which by 1990 was larger

than the WHO's entire budget (Yamey 2002b).

The World Bank’s position on health policies, which informed the policy

recommendations attached to its health loans, was developed in three seminal

publications: Financing Health Services in Developing Countries: An Agenda for Reform

(Akin, Birdsall and Ferranti 1987); Strengthening Health Services in Developing

Countries through the Private Sector (Griffin 1989); and World Development Report:

Investing in Health (World Bank 1993). While some of the recommendations made in

these reports were compatible with the WHO’s approach at the time (Abbasi 1999), the

5 Following the argument made in this article, it is likely that as participants in the making of the “Washington Consensus,” the IMF and the World Bank were not passive recipients of ideas developed by the US Treasury Department but that they incorporated ideas compatible with their own organizational cultures.

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most central ones contradicted existing WHO practices. First, the World Bank called for

the reduction of public involvement in health services delivery and instructed many

lower-income countries to reduce public expenditure on health. Second, World Bank

reports recommended the partial “cost-recovery” of public health services by charging

user fees. Third, the World Bank insisted on an increased reliance on the market to

finance and deliver health care and called for some privatization of public health care

services (Lee and Dodgson 2000; Brown, Cueto and Fee 2006; Akin, Birdsall and

Ferranti 1987).

In addition to policy recommendations, an equally consequential contribution of

the World Bank to the transformation in global health perspectives was the development

of a new way of calculating health priorities. The World Development Report (WDR)

(World Bank 1993) introduced the unit of Disability-Adjusted Life Year (DALY) for

measuring both the global burden of disease and the effectiveness of health interventions

(Yamey 2002a; Lerer and Matzopoulos 2001). The innovation of DALY was in

measuring the burden of a disease not only by number of years lost due to premature

death but also number of years of productive life lost to disability, and in that way

directly linking diseases to the issue of economic productivity. By comparing the cost

required for every “DALY saved” of various health interventions, the WDR could rank

health services according to cost-effectiveness, claiming that the most cost-effective

should be prioritized.

Using DALYs, the World Bank inaugurated cost-effectiveness as the new

paradigm to guide global health programs in poor countries (Yamey 2002a; Buse 1994).

This approach explicitly challenged the WHO’s emphasis during the 1970s and 1980s on

20

equity, where priority in resource allocation was to be afforded to those most in need.

The World Bank calculations found that some health interventions needed by the poor,

such as immunizations, were cost-effective, but this was a matter of chance, not of

methodological design: while an equitable approach to resource allocation would have

attached weight to the illnesses of more disadvantaged people, DALY calculations did

not take into account individuals’ socioeconomic circumstances (Segall 2003; Yamey

2002a).6

Hence, by the late 1990s, the World Bank had established itself as a dominant

authority in the global health field. The threat to the WHO was twofold: not only that an

organization with much greater resources and influence now developed its own policies

on health, but also that these policies reflected a rigid application of neoliberal economic

theories and were in conflict with the WHO’s existing policies.

The WHO’s financial crisis was the result of three related developments. First,

following pressure from the United States and many European countries, the WHO –

which had seen its budget grow at least 10% each year – introduced a policy of zero

nominal growth in 1993. As a result, during the 1990s mandatory contributions to the

WHO declined by 20% in real terms (People’s Health Movement et al. 2008). Second,

US Congress unilaterally reduced its relative contribution and, for a long period, did not

pay the full amount of its assessed payments (GAO 1986; Revzin 1988). Other countries,

too, did not pay their dues and the WHO often had to function with a budget much

smaller than the agreed assessments. In 1996, for example, the rate of collection was

77.72%. Total unpaid arrears of contributions to the budget that year exceeded $169

6 While cost-effectiveness is not a neoliberal principle per se, it is compatible with the neoliberal tendency for economic reductionism, as well as with the neoliberal interest in population-level outcomes that do not account for equitable distribution.

21

million (Beigbeder et al. 1998, p. 163). This decline in mandatory payments was partly

recouped through the third development: an increase in the voluntary contributions

granted by member states for programs of their choice. Between the 1970s and the 1990s

extra-budgetary funds (EBFs) increased from about 20% to almost 60% of the total WHO

expenditure (Lee 2009). While EBFs helped the WHO avoid financial disarray, they also

allowed a small number of rich countries to bypass the World Health Assembly

(Vaughan et al. 1996; Godlee 1995c), which undermined the potential influence of poor

member states and deepened the dependence of the WHO upon wealthy countries.

Finally, under the leadership of Director-General Hiroshi Nakajima, who was

elected with the support of developing countries and against the position of the United

States, the WHO also suffered from a legitimacy crisis. During Nakajima’s tenure, from

1988 until 1998, the WHO’s reputation as “the most efficient and capably managed of the

[UN] Agencies” was severely damaged.7 WHO staff and donors found Nakajima too

reserved and a poor communicator, and the accusations made against him were often

personal (Godlee 1994a). But there were also serious concerns regarding poor

management, combined with an autocratic style, and there were charges of

mismanagement, cronyism and corruption (Lerer and Matzopoulos 2001, p. 421; Brown,

Cueto and Fee 2006; Godlee 1994a). In 1994, Sweden cut its grant in half because

management reforms it had called for had not taken place. Six months later, Britain’s

National Audit Office announced that, after 16 years as WHO’s external auditor, it no

longer wished to continue, and warned that the bookkeeping of the WHO’s operations in

7 Aide Memoire on the WHO. Meeting of UN Ad Hoc Committee on UN Finances at Geneva on 20-21 April 1966. FO 371/189916. UK National Archives.

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Africa was so sloppy there was a risk of “fraudulent transactions remaining undetected

over long periods” (Pilkington 1995; The Guardian 1994).

With the rise of neoliberalism, then, the WHO was experiencing a growing crisis,

with financial difficulties, threatened authority, and undermined legitimacy. Until 1988,

under the leadership of Dr. Halfdan Mahler, the WHO leadership fought to preserve its

existing agenda despite this manifestly changing environment. Between 1988 and 1998,

partly due to the problems encountered by Nakajima, the WHO bureaucracy offered little

by way of adequate response. During that period, analyses in leading medical journals

described in alarming terms the dire condition of the WHO. Typical titles included “What

Role for WHO in the 1990s?” (Lee and Walt 1992), “WHO in Crisis” (Godlee 1994a),

and “WHO in Retreat” (Godlee 1994b). Many concluded that “the WHO was no longer

setting the international public health agenda” (Lerer and Matzopoulos 2001, p. 421;

Gillies, von Schoen-Angerer and ‘t Hoen 2006). But in 1998, under the new leadership of

Director-General Gro Harlem Brundtland, the WHO bureaucracy began to develop an

appropriate response to the shift toward neoliberalism, which would allow it to regain the

funds, authority and legitimacy it had lost.

Restructuring Neoliberalism

In the late 1990s, in the face of mounting pressures, the Executive Board elected

Dr. Gro Harlem Brundtland as the WHO director-general. Brundtland had little public

health experience but she had a successful political career as the Prime Minister of

Norway and she gained international prominence when she chaired the UN World

Commission on Environment and Development.

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At the 51st World Health Assembly, when still a Director-General elect,

Brundtland promised: “WHO can and must change. It must become more effective, more

accountable, more transparent and more receptive to a changing world.”8 In her address

before the Assembly only two years later Brundtland could declare:

Once again, the world turns its attention to… the World Health Assembly. You are the health leaders of the world, and your World Health Organization is the lead agency in health. Ours are the crucial issues of the time: health, survival, development, equity, and opportunity. Global public opinion is starting to realize where health belongs: at the core of every child’s opportunity to reach his or her full potential; at the core of every parent’s opportunity to work, to care and to innovate. It is at the core of every community’s opportunity to secure sustainable economic development for its citizens; and at the core of our efforts to combat poverty, and foster development for all.9

Implicit in the speech was a recognition of the WHO’s declining reputation in

previous years. More explicit was Brundtland’s conviction that the means to regain the

organization’s legitimacy and authority was by linking the role of the WHO to themes

that were compatible with the dominant neoliberal sentiments, particularly economic

growth. Indeed, in the late 1990s, the WHO underwent significant programmatic and

organizational changes that were designed to fit the new ideological environment. While

adapting to the neoliberal themes of the time, however, the WHO was able to preserve its

core organizational agenda by restructuring those neoliberal themes into policies and

programs somewhat different than what the US government or the World Bank would

have supported.

“Anchoring Health on the Development Agenda.” Brundtland was forthright and

unsentimental in her conviction that the only way to revive the WHO’s deteriorating

8 WHO Document. May 1998. A51/VR/6, p. 102. PAHO Library.9 “Challenges and Opportunities for the Health Leaders of Today.” Address by Dr. Gro Harlem Brundtland, the Director-General of the WHO to the Fifty-Third World Health Assembly. 15 May 2000. Washington, DC: PAHO Library.

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position was by actively incorporating the organization into the neoliberal environment.

Brundtland also believed that to do so successfully, the WHO had to broaden the range of

its allies to include effective audiences and to revise its message so that the new

audiences would find it appealing.

Traditionally, the WHO had regarded health ministers as its main audience.

However, given the subordinate position of health ministers in most countries, they were

of little use in delivering the message that health was a paramount objective. Instead,

Brundtland believed that the WHO should communicate directly with those officials and

policy-makers who had influence over the distribution of budgets. As Brundtland wrote

in an early editorial in Science, “Health ministers need little convincing, but WHO will

remind presidents, prime ministers, finance ministers, and science ministers that they are

health ministers themselves” (Brundtland 1998).

How could the WHO persuade influential government officials to care about

health? Brundtland had learned from her experience at the World Commission on

Environment and Development that an effective way to earn the support of finance

ministers was not to talk about health but to talk about finance. Hence, the WHO

abandoned its long-held position that health was an aspect of social development that

should be pursued independently of economic concerns and, accepting the neoliberal

reduction of social development to economic development, adopted instead the premise

that health was good for economic growth (Horton 2002). Speaking before the Executive

Board, Brundtland stated that, “We… know that sound investments in health can be one

of the most cost-effective ways of promoting development and progress. Improving

health in poor countries leads to increased GDP per capita” (Brundtland 1999a). She then

25

stressed the importance of making such knowledge public for the sake of promoting the

WHO agenda.

I believe the international health community, including WHO, has undersold this fact. In a time… where nations are searching for ways to make ends meet, we have been sitting on a secret. We haven’t fully seen that this is a powerful message we should take to the political decision-makers and to the private sector… My own experience tells me that this strategy was instrumental in taking the environment from being a cause just for the already convinced, to becoming a real issue of political importance to major players (Brundtland 1999a).

But how could the WHO convince donor countries to “[increase] investments in

the health of the poor” as a strategy to promote economic growth (Brundtland 1999b)?

This was a difficult task, as neoliberal economists conceived of health as an

“unproductive consumer of public budgets,” while the WHO leadership wanted to argue

that wise investment in health was “key to productivity itself” (cited in Birmingham

1999). For the message to be effective, the promise of development had to be convincing.

As Brundtland said in an interview: “Anchoring health on the development agenda…

involves not just reaching the minds of people who have decision-making power… but

also increasing the evidence base so that you have convincing arguments” (Yamey

2002c). To make the arguments convincing, she wanted “to stress the importance of

health in economic terms” (cited in Birmingham 1999). To provide the economic

evidence needed, the WHO established the Commission on Macroeconomics and Health

(CMH).

This Commission was established in January 2000 and was chaired by the

economist Jeffrey Sachs, then of Harvard University. Sachs, who was described by the

New York Times as “probably the most important economist in the world” (cited in

Banerji 2002), was especially known for implementing economic “shock therapy” – the

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sudden release of rigid neoliberal reforms – in developing and transitional countries

(Waitzkin 2003). Other members of the Commission included former ministers of

finance, and officers from the World Bank, the IMF, the WTO and the UN Development

Program (UNDP) (Ashraf 2001; Brown, Cueto and Fee 2006). Most of the economists in

the Commission, including those from poorer countries, had been educated in prestigious

universities in the West. Many of them were involved in the World Bank’s Investing in

Health report (Banerji 2002; Waitzkin 2003). Clearly, The Commission was an attempt to

co-opt leading economists by giving them the task of presenting the WHO’s position.

Brundtland’s instructions to the CMH members made this expectation explicit:

“Placing health at the heart of the development agenda. This is the purpose of the

Commission.” She then elaborated, “That poverty causes ill health is well known. But

good health can fuel the engine of development… This is the case we have to make”

(Brundtland 2000b). The report issued by the Commission, Macroeconomics and Health:

Investing in Health for Economic Development (CMH 2001) closely followed these

instructions. The report presented evidence that improving the health of the poor would

lead to lowered fertility rate, improved educational performance, increased labor

productivity, and improved macroeconomic stability and, therefore, would contribute to

economic growth. The Commission also established that for low- and middle-income

countries, investing in health and health technologies was one of the most effective

means to achieve the desired economic development. As Sachs maintained before the

World Health Assembly:

Accomplishing this investment in the life-saving technologies for your countries, is the sine qua non of ending the poverty trap which afflicts so many of the

27

poorest countries in the world and is the sine qua non of the economic progress that you so ardently desire and deserve.10

The policy implications that followed were obvious: the way to achieve economic

growth was a massive injection of financial resources into health services (The Lancet

2002). Indeed, one of the main proposals of the Commission’s report was “an expanded

aid effort to the world’s poorest countries” (CMH 2001, p. 9).

With the CMH report, which the Executive Board the World Health Assembly

enthusiastically endorsed,11 the WHO relied on economic expertise to grant the field of

public health what was then the only justification for intervention and “investment” in the

developing world: the promise of economic growth. By relying on such justification, the

WHO reversed two principles central to its agenda during the 1970s. First, the WHO

accepted a view of development that reduced it to its economic dimension and no longer

defended the notion of social development that allowed concern with individuals’ quality

of life independently of the economic realm. Second, the WHO now focused on the

question of overall growth at the national level rather than on the question of equitable

distribution within a country (Kickbusch 2002; Banta 2002).

However, the CMH report was not a passive capitulation to the economic

reasoning of exogenous forces, but rather a strategic modification of that very reasoning.

The World Bank emphasized the causal link between poverty and disease to prioritize

economic development and downplay the need for direct attention to the health sector.

The CMH report emphasized the opposite vector, which went from disease to poverty,

postulating that improved health leads to economic development.12 By insisting that

10 WHO Document. 2002. A55/VR/5, p. 109. WHO Library.11 WHO Document. 2002. WHA55/A/SR/5. WHO library.12 Interview by the author with Dr. Steven Phillips, Medical Director, Global Issues and Projects, Exxon Mobil Corporation, Washington, DC, 11 January 2009.

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improvement in health was necessary for economic growth, the report turned the World

Bank’s reasoning on its head. Instead of agreeing with the World Bank’s call for budget

cuts in the public health sector, the WHO used the goal of economic growth, on the

contrary, to call for greater investment in public health.13

In short, the WHO was able to fit to the new ideological environment while

protecting its core mission by altering the meaning of the neoliberal logic before adopting

it. Through such strategic compliance, the WHO established its own version of

neoliberalism that contributed to the plurality of neoliberal policies across international

organizations. In this instance, moreover, the economic reasoning used in the CMH

report helped transform the position of other international organizations and of rich

donors. The Millennium Development Goals, which provide UN member states with

benchmarks for tackling extreme poverty, include three (out of eight) health-related

goals: reducing child mortality, improving maternal health, and combating HIV/AIDS,

malaria and other diseases. And donors have dramatically increased their contributions

for health programs. For example, since its founding in 2001, the Global Fund to Fight

AIDS, Tuberculosis and Malaria, has received voluntary donations of almost $22 billion.

A cost-effective “new universalism.” Even before health was successfully

incorporated into the development agenda and countries could envision economic

benefits arising from investments in health programs, the question arose: which health

programs should be prioritized? The World Bank’s World Development Report

prioritized cost-effectiveness calculations. Following the World Bank, the WHO, too,

13 The WHO staff used concern with the effect of disease on poverty to reject also other World Bank health policy recommendations, including user fees (WHO 1993). The WHO staff justified its opposition to this practice, which it found harmful and discriminatory, by arguing that it undermined the pursuit of economic betterment, both at the household and national levels (WHO 2005a; WHO 2005b).

29

shifted its priorities from programs designed to serve those most in need to programs that

offered cost-effective interventions. While this shift signified a move away from equity

considerations, the WHO bureaucracy used it to protect another principle, that of

universal access.

In an early indication of this transformation, Brundtland’s transition team

proposed priorities for the WHO that embraced the World Bank’s system of ranking

health interventions based on the relative “reduction in disease burden from a health

intervention in relation to the cost” (World Bank 1993, emphasis added). Two years later,

the World Health Report Health Systems: Improving Performance (WHO 2000) was

prepared by a newly-established WHO unit, Evidence and Information for Policy, which

consisted mostly of economists, including many of the authors of the World Bank’s

World Development Report. The World Health Report formally endorsed cost-

effectiveness as a tool for priority setting. It also endorsed the World Bank’s concept of

DALYs to measure the cost of disabilities. Cost-effectiveness was also a central

recommendation of the CMH Report (CMH 2001). Most comprehensively, the 2002

World Health Report, Reducing Risks: Promoting Healthy Life, offered a large-scale

study of the cost-effectiveness of 170 interventions (WHO 2002).

The choice of DALYs as the most appropriate measure for choosing priorities in

health interventions introduced a new articulation of WHO values (Lerer and

Matzopoulos 2001; Ollila and Koivusalo 2002; Yamey 2002a). On the one hand, cost-

effectiveness calculations replaced WHO’s previous focus on those most in need. The

2000 World Health Report rejected the primary health care approach that was based on

simple interventions only to the poor and that had dominated WHO programs in the

30

previous decades. An algorithm in the Report, which offered a list of questions that

should guide governments in their decision-making, recommended interventions that

benefited the poor only if they were cost-effective (WHO 2000, p. 55). On the other

hand, the WHO also rejected rigid neoliberal solutions that would rely entirely on the

market. Brundtland asserted that “WHO’s values cannot support market-oriented

approaches that ration health services to those with the ability to pay,” since such

approaches lead to further inequities, and because “growing bodies of theory and

evidence indicate that markets in health are… inefficient as well” (Brundtland 1999b).

Instead, the WHO used its support of cost-effectiveness to introduce a new and

potentially broader scope for health interventions. The 2000 Report called for a “new

universalism,” which promised cost-effective interventions for everyone.

Rather than all possible care for everyone, or only the simplest and most basic care for the poor, [“new universalism”] means delivery to all of high-quality essential care, defined by criteria of effectiveness, cost and social acceptability. It implies explicit choice of priorities among interventions, representing the ethical principle that it may be necessary and efficient to ration services, but that it is inadmissible to exclude whole groups of the population.14

This concept of “new universalism” offered guidance for governments in the context of

scarce resources. According to Brundtland, “Clearly, limits exist on what governments

can finance and on what services they can deliver. The report intends to stimulate public

policies that acknowledge these limits – recognizing that if services are to be provided at

all, then not all services can be provided.”15 Once the need to set priorities was

established, Brundtland insisted that in order to protect the principle of universality, “The

most cost-effective services should be provided first” (Brundtland 1999b). In short, WHO

14 WHO Document. 2000. A53/4. PAHO Library. 15 WHO Document. 2000. A53/4. PAHO Library.

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used a cost-effective logic to promise remedies for a larger population, including, but not

exclusive to, the poor.

Starting in the late 1990s, then, the WHO’s priorities focused on health problems

that had a major socioeconomic impact on development and for which cost-effective

interventions were available (McCarthy 2002; Yamey 2002a). Still, the WHO’s top new

priorities were the three major communicable diseases affecting the poor, namely,

malaria, tuberculosis, and (albeit only later) HIV/AIDS. All three initiatives were

presented as contributing to development. For example, one slogan for the malaria

initiative was, “Roll Back Malaria, Roll in Development,” and the first executive-director

for the Roll Back Malaria initiative, Dr. David Nabarro, stated, “Malaria is taking costly

bites out of Africa… It is feasting on the health and development of African children and

it is draining the life out of African economies” (cited in Packard 2009). For all three

diseases, cost-effectiveness determined the choice of the preferred initiatives. These

initiatives often reflected the dominance of the neoliberal logic, including a preference

for market-driven solutions – that is, solutions that could transfer responsibility from the

public realm to the private sector by creating the possibility for profit. In the malaria

initiative, for example, the chosen strategy to promote the spread of insecticide-

impregnated bed nets was to build sustainable private for-profit markets or to create a

not-for-profit commercial sector.16 Also, all three initiatives were structured as WHO-led

partnerships with other international organizations, governments and the private sector:

Roll Back Malaria, Stop TB Partnership, and, for HIV/AIDS, 3-by-5. Nevertheless, the

WHO bureaucracy was able to adhere to these neoliberal prescriptions while submitting

16 Brown 1999; interview by the author with Allen Schapira, formerly at the WHO Roll Back Malaria Department, Geneva, Switzerland, May 31, 2008.

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these prescriptions, at least in part, to its own priorities. In a context in which fiscally

responsible countries were expected to minimize their health interventions, the WHO

bureaucracy was able to use cost-effective logic to legitimate the principle of providing

health services to everyone and to mobilize support for interventions affecting the poor,

thereby expanding the scope of intervention considered legitimate under neoliberalism.

Access to AIDS drugs. The WHO, like other international organizations, was

embarrassingly slow in comprehending the scope of the AIDS crisis. The WHO did

establish the Global Programme on AIDS (GPA) in 1986, which under the leadership of

Jonathan Mann was able to draw countries’ attention to the social and economic

implications of the disease, but in 1996 donors decided to move the responsibility over

AIDS to an independent organization, the Joint United Nations Programme on HIV/AIDS

(UNAIDS), intentionally marginalizing the role of the WHO. This, of course, was

another indication of the WHO’s declining reputation during the 1990s.

Around that time, however, the WHO staff took a proactive position regarding an

international agreement signed by WTO member states in 1994, the Trade-Related

Intellectual Property Rights agreement (TRIPS). TRIPS required member states to pass

laws that strengthened companies’ patent protection of inventions, and the TRIPS

interpretation favored by the US government limited the allowed scope of exceptions to

the new rules (Sell 2003). This had major implications for the ability of poor countries to

afford essential AIDS drugs. Since brand-name AIDS drugs were extremely expensive,

poor countries could afford them only by locally manufacturing or importing generic, and

therefore much cheaper, versions of these drugs. By threatening the future legality of

generic manufacturing, TRIPS seemed to block this option.

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The potential impact of TRIPS on public health in general and on access to anti-

AIDS antiretroviral drugs (ARVs) in particular was soon debated at the WHO. At the

World Health Assembly in May 1996, Iran stated that it “was very much concerned about

the impact of the World Trade Organization on pharmaceutical industries in developing

countries,” and sponsored a resolution that asked the Director-General to “report on the

impact of the work of the… WTO with respect to national drug policies and essential

drugs.”17 A year later, the WHO Action Programme on Essential Drugs published a

report, Globalization and Access to Drugs: Implications of the WTO/TRIPS Agreement

(WHO 1997), which discussed the issue.

The report defended the concept of universal access to essential drugs in

normative terms. It stated that, “Drugs… are an integral part of the realization of a

fundamental human right - the right to health,” and that “policies pursued must aim to

make drugs available for all who wish to have them, and at affordable prices” (WHO

1997). However, using adaptive strategies, the report was able to defend the principle of

universal access to drugs without challenging the principle of intellectual property

protection. Rather than insisting that normative concerns should overrule the principles

protected by the WTO, the report suggested that the two were entirely compatible, as they

were both concerned with improved access.

This objective [accessibility to drugs] coincides with the general objective of the GATT [General Agreement on Tariffs and Trade] for the last 40 years – seeking to eliminate barriers to trade so that consumers have the greatest possible access to all the goods available in the world (WHO 1997).18

17 Interview by the author with Germán Velásquez, Drug Action Programme, World Health Organization, Geneva, Switzerland, June 3, 2008. 18 Notably, the authors of the WHO report chose to ignore the fact that intellectual property rights have often been perceived by critics as inconsistent with free trade principles and are therefore a sign of developed countries’ hypocrisy.

34

Instead of arguing – based, for example, on humanitarian sentiments – for the exclusion

of medicines from the realm of trade agreements, the report suggested that trade

agreements, if interpreted correctly, already achieved an appropriate “balance between

intellectual property and accessibility” (WHO 1997). The report then provided a detailed

legal reading of various provisions in TRIPS to show that the agreement was compatible

with the health needs of developing countries.

Concretely, the report offered a careful legal interpretation of TRIPS that showed

that the agreement “expressly provides two means of obtaining exceptions and limiting

the exclusive rights conferred by the patent on its owner.” The report maintained that

“These two provisions may be used to ensure greater accessibility to essential drugs.”

The first exception was the use of compulsory licensing, in which a government is

allowed to grant, under certain conditions, a license to a third-party manufacturer to

commercialize a patented invention without the consent of the patent holder. The report

argued that according to Article 31 of TRIPS, “national public authorities may be

allowed, within the conditions laid down in the Agreement, to issue compulsory licenses

against the patent owner’s will when justified by the public interest.” The second

exception was the use of parallel imports, in which a government is allowed to buy a

patented drug from a third party who has legitimately bought the patented drug, without

permission from the patent owner. According to the WHO report, “the Agreement does

not prohibit parallel imports.” In justifying their support of parallel imports the authors

again drew on general principles of free trade: “From the perspective of trade

liberalization, it is considered that from the moment the product is marketed, the patent

holder can no longer control its subsequent circulation” (WHO 1997).

35

In this way, the report incorporated the WHO bureaucracy’s preferred

interpretation into the dominant neoliberal principles rather than trying to replace them.

The WHO report did not rely on human rights concerns to justify protection of access to

drugs, did not rely on public health expertise to challenge the legal agreement, did not

criticize the agreement or the agenda of trade liberalization, and did not call for the

revision of TRIPS. Instead, the report used the WTO’s own tools of expertise, legal

reasoning, to make the case that TRIPS was entirely reconcilable with concerns for

access to drugs. Consequently, the WHO bureaucracy’s call for access to AIDS drugs

could be presented not as reflecting anti-neoliberalism or anti-globalization sentiments

but, to the contrary, as entirely compatible with them.

The WHO’s technical-legal interpretation of TRIPS did not completely pacify the

pharmaceutical sector or the US government. A letter to the WHO from the vice-

president of the Pharmaceutical Research and Manufacturers of America considered the

report “a deeply flawed document that misleads the public,” and the US government

prepared a 17-page paper “pointing out the inaccuracies and false implications with

which the document is riddled” (cited in Velásquez, Correa and Balasubramanlam 2004,

pp. 87-88). The US government demanded that the WHO revise the publication, and

Brundtland agreed to ask independent experts to review the report. The new version of

the report, however, made only inconsequential alterations (WHO 1999b).

The WHO report was the first to provide a legal interpretation that allowed the

use of TRIPS to defend, rather than prohibit, the manufacturing of generic drugs, and it

guided the mobilization of others, including Consumer Project on Technology (CPTech)

36

and Médecins Sans Frontières.19 Later, following bitter political struggles in South

Africa, Brazil, Thailand, the United States, and elsewhere, developed countries finally

accepted this legal interpretation (Shadlen 2004; Sell and Prakash 2004; Klug 2008;

Friedman and Mottiar 2005). In November 2001, WTO members signed the Declaration

on the TRIPS Agreement and Public Health (the Doha Declaration), which, explicitly

drawing on WHO terms, stated:

We agree that the TRIPS Agreement does not and should not prevent members from taking measures to protect public health... We reaffirm the right of WTO members to use, to the full, the provisions in the TRIPS Agreement, which provide flexibility for [protecting public health and promoting access to medicines for all] (WTO 2001).

Two years later, the “30 August 2003 Decision” specified the conditions under which

poor countries without pharmaceutical manufacturing capabilities would be allowed to

import generic versions of drugs still under patent.

In subsequent reports and publications, WHO staff continued to critically review

the effectiveness of these documents (e.g., Türmen and Clift 2006). The WHO also

contributed its expertise in support of the manufacturing and funding of generic drugs.

For example, in 2002, the 12th Expert Committee on the Selection and Use of Essential

Medicines added twelve ARV drugs to the WHO list of essential medicines, thereby

affirming that the WHO considered ARVs to be an essential part of a basic health care

system (Zimmerman 2002). That year, the WHO Prequalification of Medicines

Programme, which is responsible for examining drugs for purity, safety and efficacy,

provocatively added Indian generic versions of patented AIDS drugs to its list of safe

drugs. The WHO prequalification of generic drugs allowed the Global Fund to Fight

19 Interview by the author with Germán Velásquez, Drug Action Programme, World Health Organization, Geneva, Switzerland, June 3, 2008.

37

AIDS, Tuberculosis, and Malaria to purchase generic drugs. Prequalification was also

used to effectively dispute the claim that generic drugs were not of proven quality, which

the George W. Bush Administration used to justify the US government’s reluctance to

purchase them.20

The WHO bureaucracy’s response to TRIPS offers a particularly powerful

illustration to the capacity of international bureaucracies to restructure external demands

by strategically adapting to them. Rather than provocatively opposing intellectual

property protection, the WHO bureaucracy was able to construct an agreeable legal

balance between intellectual property rights and public health, which, in turn,

incorporated concern for public health into the existing neoliberal framing.

Anti-smoking campaign. The choice of public-private partnerships as the

preferred organizational form, mentioned above, reflected a significant transformation of

the WHO’s relations with the private sector. By improving its relations with for-profit

companies, the WHO bureaucracy followed the call by the US government for “private

sector involvement in problem-solving… in the United Nations system.”21 The WHO

bureaucracy was also influenced by the Rockefeller Foundation and the Bill and Melinda

Gates Foundation, which began to condition their grants to the WHO on the organization

making partnerships with the private sector (WHO 1999a). While accepting business as

legitimate partners in some cases, however, the WHO was also able to restructure

neoliberal pro-business sentiments to justify its opposition to the tobacco sector.

20 Interview by the author with Lembit Rägo, Quality Assurance and Safety of Medicines, WHO. May 27, 2008.21 Gregory Newell, Assistant Secretary for International Organization Affairs, Department of State. Foreign Assistance and Related Programs Appropriations for 1986. Hearings before a Subcommittee of the Committee on Appropriations. House of Representatives. Ninety-ninth Congress. First Session (part 5). May 8, 1985.

38

The World Health Assembly passed a resolution calling for the development of a

binding convention on tobacco control already in 1996, but it was only in 2003 that WHO

member-states agreed on an international tobacco control treaty aimed at reducing

smoking in their countries (Roemer, Taylor and Lariviere 2005). Due to pressures from

governments supporting the tobacco sector, many of the provisions in the convention –

including limitations on free trade, public smoking bans, and “shock” images on health

warnings – were weaker than supporters had originally hoped. Still, the treaty contained

important provisions intended to discourage smoking, such as banning tobacco

advertisements, raising tobacco taxes, and printing sizable health warnings on cigarettes

packages.

The WHO bureaucracy’s motivation for targeting smoking was not solely health-

related, as reputational considerations made the tobacco campaign uniquely attractive.

First, an anti-smoking initiative affirmed the WHO’s new commitment to turning the

fight against non-communicable diseases into a legitimate area of WHO involvement.

This new commitment was the outcome of the WHO’s adoption of DALYs for measuring

the burden of disease. Because DALYs incorporated information on individuals’ years of

partial productivity due to disease rather than only premature death, the approach greatly

elevated the importance of chronic diseases. WHO studies that showed that smoking had

become one of the major killers not only in developed countries but also in developing

countries, where 800 million of the world's 1.25 billion smokers lived, adding evidence to

the claim that smoking should be a concern to all WHO member states (Taylor and

Bettcher 2000). A second incentive to focus on the tobacco sector was that the World

Bank shared the WHO’s position on the issue (e.g., Barnum 1994). WHO’s collaboration

39

with World Bank economists ensured that tobacco control measures were viewed as cost-

effective, and the WHO relied on a World Bank analysis to assuage the concern that

tobacco control would harm the economy in poor countries heavily dependent on tobacco

revenue (Jha and Chaloupka 1999; Collin 2004). The World Bank’s interest also allowed

a channel through which to reclaim the WHO’s leadership in a global health matter by

complementing, rather than contradicting, the World Bank position.22 Finally, since

smoking was not a narrowly medical issue, Brundtland hoped it would attract the

attention of policy makers other than health ministers to the WHO’s efforts. According to

Katherine Deland, of the WHO Tobacco Free Initiative, “All of a sudden there was a

tremendous opportunity to expand WHO’s influence… and to affect domestic policy.”23

These incentives aside, an adamant crusade against the tobacco companies bore

the risk of damaging the relations with other businesses that the WHO staff worked hard

to cultivate. The WHO bureaucracy was able to disassociate its position on tobacco

companies from its position on other enterprises by highlighting the tobacco sector’s

alleged exceptional attributes. In particular, the WHO used explicit demonization of the

tobacco sector to assure other industries that the WHO’s crusade against the tobacco

industry did not reflect anti-business sentiments, but, on the contrary, that it reflected an

exception to an otherwise business-friendly environment.

Hence, in defending the WHO position, Brundtland likened the role of the

tobacco industry in creating health problems to that of the mosquito in causing malaria:

both were blood-sucking, disease-spreading parasites (The Economist 2000). Unlike

22 Interview by the author with Katherine Deland, Tobacco Free Initiative, WHO, Geneva, Switzerland, June 2, 2008.23 Interview by the author with Katherine Deland, Tobacco Free Initiative, WHO, Geneva, Switzerland, June 2, 2008; see also Brundtland 2000a.

40

mosquitoes, moreover, tobacco companies were not innocent, which provided a villain

that was accountable to its deeds.24 In these and other criticisms of the tobacco sector, the

WHO relied on the same rationale that it used to justify its engagement with the private

sector, namely, that corporations could be and were socially responsible, and therefore

potentially “part of the solution.” According to neoliberal arguments, corporations were

not only able to govern themselves more efficiently with less government regulation, but

also to govern themselves responsibly. The WHO was able to make use of these claims

against the tobacco sector. Stella Bialous, of the WHO Tobacco Free Initiative, reported:

“The unique feature of tobacco products – which kill their consumers when used as

directed by the manufacturer – renders the ongoing operations of the tobacco companies

incompatible with the very notion of Corporate Social Responsibility.”25

Turning the tobacco industry into a villain was used to justify the regulation of the

sector; it was also used to effectively distinguish between tobacco and other businesses.

To differentiate the tobacco industry from legitimate business sectors, the WHO used a

particularly critical language. A cigarette, Brundtland claimed, “is the only product which

when used as intended, will kill one half of its consumers” (Giles and Thornhill 2000),

and “a cigarette is a euphemism for a cleverly crafted product that delivers just the right

amount of nicotine to keep its user addicted for life before killing the person” (cited in

Williams 1999). Unlike other commodities, cigarettes were “inherently dangerous

products” designed by tobacco companies to create and maintain nicotine addiction. The

marketing practices of tobacco companies were similarly used to establish the immorality

24 Interview by the author with Katherine Deland, Free Tobacco Initiative, WHO, Geneva, Switzerland, June 2, 2008.25 United Nations Ad Hoc Inter-Agency Task Force on Tobacco Control. Report of the Sixth Session. Geneva, Switzerland. 30 November - 1 December 2005.

41

of the industry. The tobacco companies targeted young people, women, and “those less

advantaged.”26 The WHO staff rejected the claims that smokers knew the risks or that

they were making a deliberate choice, and Brundtland described smoking as a

“communicable disease” that spread through advertising (Giles and Thornhill 2000).

Such distinctions allowed the WHO to be “unapologetic about cold-shouldering the

tobacco-industry devils” (The Economist 2000). In short, the WHO’s campaign against

the tobacco industry was made possible within a neoliberal context by avoiding

justifications that questioned the capacity of markets to regulate themselves but, on the

contrary, using justifications that effectively reproduced the neoliberal support of a free

market but identified the tobacco sector as an exception to the general rule.

DISCUSSION

The response of the WHO bureaucracy to pressures for policy reforms from the

US government and the World Bank suggests that while submitting to the neoliberal

logic, international organizations, in an attempt to guard some of their material or

ideational goals, were able to restructure that logic. The WHO secretariat was not the

only international bureaucracy adapting strategically to, and thereby transforming, the

new environment. The International Labor Organization (ILO) has fought against its

increasing marginality by involving itself in the development agenda and by committing

member states, in the ILO Declaration on Fundamental Principles of Rights at Work,

only to the least controversial “core” labor standards (Standing 2008). While it is

sometimes useful to simply label such initiatives “neoliberal,” as Standing (2008) does,

such labeling unjustifiably reproduces a totalizing image of a hegemonic logic and

overlooks important differences in the implementation of that logic in different

26 WHO Document. 1986. EB77/SR/9, p. 129. WHO Library.

42

international settings. In contrast, appreciation of the diversity in the implementation of

neoliberalism across international organizations allows us to appreciate the cacophony

that any hegemonic regime is inevitably made of, and provides an opportunity to identify

and analyze the ability of international bureaucracies, like other actors, to alter meanings

imposed upon them.

The WHO was clearly part of the neoliberal transition that swept international

organizations in the 1980s and the 1990s. The WHO’s turn to neoliberalism was a

rational response to a major crisis the US government generated in the entire UN system,

which threatened the organization’s financial standing, its authority over health issues,

and its legitimacy as a competent and trustworthy organization. Under Brundtland’s

leadership, the WHO began to consider health through the lens of economic growth,

prioritized cost-effective programs, and accepted market-driven solutions and business-

friendly arrangements. These programs and policies, however, also significantly altered

the neoliberal logic that they supposedly imitated. The WHO staff used the concern with

economic growth to call for greater financial investment in health, and relied on cost-

effective logic to call for a “new universalism” – the delivery of high-quality essential

care to all – while maintaining a focus on infectious diseases affecting the poor. In

addition, while actively seeking improved relations with the private sector, the WHO

bureaucracy strongly supported the regulation of the tobacco sector, and objected to the

WTO intellectual property rules in attempt to improve access to essential AIDS drugs.

In making such changes, the WHO accepted many neoliberal prescriptions, and,

as a result, compromised its previous agenda. For example, while the embrace of cost-

effectiveness held the promise of improving the delivery of aid to the developing world,

43

it also meant that there was no longer commitment to those most vulnerable. Other

strategic changes also potentially endangered the WHO’s future capacity. Presenting

health as a major aspect of economic development rather than a goal in its own right, for

instance, ran the risk that donors would invest resources in health only if such

investments had the added benefit of improving economic growth and, possibly, only if it

was more effective than investing in other sectors. Increased reliance on voluntary funds,

in turn, raised the issue not only of sustainability, which has become particularly relevant

with the current economic situation, but also of representation: the shift of authority away

from the World Health Assembly meant that developing countries have possibly lost their

most valuable source of influence in the United Nations, the one country/one vote rule.

Nevertheless, in their adaptive strategies, the WHO leadership and staff made the

shift toward neoliberalism as conducive as possible to the organization’s global health

agenda and, in this way, led to the reformulation of the hegemonic universe into which

they integrated themselves. The deceptively smooth transition of international

organizations to neoliberalism conceals the creation of a fragmented universe, in which

each international organization restructured the neoliberal logic it presumably adhered to.

International organizations were not passive transmission belts, having no input into the

neoliberal reforms disseminated at the international and national levels, nor were

international bureaucracies enthusiastic adherents of one version of neoliberal thought as

articulated by the so-called Washington Consensus. Instead, international bureaucracies

authored their own neoliberal transition by strategically restructuring neoliberal reforms

so they would better fit their own principles and interests.

44

This restructuring at the international level offers new ways to think about

diversity in neoliberal policies also at the state level. Most accounts of the inevitable

divergences in the implementation of neoliberalism in different states still assume, like

the earlier literature on convergence they are responding to, a coherent neoliberal regime,

and identify domestic conditions that make governments deviate from that regime

(Fourcade and Babb 2002; Prasad 2006; Guillén 2001; Halliday and Carruthers 2009;

Harvey 2005; Sewell and Evans Forthcoming). Scholars who regard neoliberalism as a

plural set of ideas maintain a focus on the national level, while moving their investigation

on the construction of neoliberal hegemony from state policies to civil society (Plehwe,

Walpen, and Neunhöffer 2005). The argument in this paper suggests two alternative paths

to the diversity across states.

First, by showing that the neoliberal regime also at the international level is

restructured, and therefore fragmented and potentially incoherent, the account here raises

the possibility that diversity across states may not be due to factors at the national level,

but is instead due to a plurality of international versions of neoliberalisms that influence

national governments. For example, the South African Medicines and Related Substances

Control Amendment Act, which granted the government the right to impose compulsory

licensing and parallel imports to allow the supply of more affordable medicines, was

clearly informed by domestic conditions – including a devastating AIDS crisis, a new

constitution that established health care as a right, and the ability to take advantage of

domestic pharmaceutical manufacturing capabilities.27 But the choice of response was

also directly informed by diversity at the international level, specifically, the WHO report

27 Interview with Sello Ramasala, Department of Health, in Pretoria, South Africa, July 4, 2008.

45

on the effect of TRIPS on public health (WHO 1997), which provided an alternative to

the WTO’s formal interpretation of TRIPS and offered legal means to achieve what the

WHO bureaucracy considered an appropriate balance between intellectual property

protection and access to drugs.28

Second, diversity that originates at the national level, even when it is motivated

by path dependence (Brenner and Theodore 2002) or is due to mediating institutions

(Fourcade and Babb 2002), may be the result, as is the case at the international level, not

of resisting or avoiding the exogenous neoliberal prescriptions, but of reframing the

meaning of these prescriptions in a way that is more compatible with the interests of the

government in question (see also Halliday and Carruthers 2009). An inquiry into the

strategies, and necessary compromises, involved in such alterations of neoliberal

prescriptions may offer a fruitful way of using, and further developing, the notion of

strategic adaptation.

28 Interview with Germán Velásquez, Drug Action Programme, WHO, Geneva, Switzerland, June 3, 2008.

46

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