When organizational culture hinders human rights

Why do organizations such as the World Bank that are devoted to good causes sometimes drop the ball on human rights?

A University of British Columbia expert on organizational behavior and international law says the answer can be found in an organization’s culture and system of incentives.

These lessons come from a pioneering study by Galit Sarfaty, who spent four years studying the World Bank before joining UBC’s Faculty of Law this summer from the Wharton School of Business at the University of Pennsylvania.

“The World Bank shells out $20 billion annually to reduce poverty in developing nations through economic development, but has not adopted any sort of meaningful human rights policy,” says Sarfaty, whose findings were published in June in the book Values in Translation: Human Rights and the Culture of the World Bank.

“As a result, the World Bank has periodically funded projects that violate basic human rights of local inhabitants,” says Sarfaty, who studied law at Yale and anthropology at the University of Chicago. “My research goal was to understand what has prevented the bank from adopting a human rights policy with the aim of hopefully helping to advance human rights and identifying lessons for other organizations.”

According to Sarfaty, the largest barrier to the bank’s adoption of a human rights agenda is its own employee incentive system. “Employees are rewarded based on the size and quantity of loans that are approved,” she says. “This emphasis on quantity over quality means the social and environmental impacts of projects can be overlooked.

The other key obstacle is a clash of expertise between bank economists and lawyers, says Sarfaty. “My findings suggest that the lawyers emphasize the inherent value of human rights, while the economists tend to view human rights as a means to an end – to them, the larger goal is economic growth,” she says.

“As a result of these internal dynamics, the World Bank’s current approach to human rights essentially reflects the views of the economists, because they are the bank’s dominant culture,” says Sarfaty, whose fieldwork included more than 70 interviews with current and former bank officials.

The challenge of taking the bank in a new direction has fallen to Jim Yong Kim, who took office as president on July 1. Sarfaty says he must work to align incentives with project outcomes, and ensure more non-economists are promoted to leadership positions if human rights are going to be taken seriously.

Among Sarfaty’s first projects at UBC will be identifying the potential costs of using indicators and rating systems to inform regulatory decision making.

“Organizations have historically been better at measuring the economic aspects of projects because human rights are harder to quantify,” she says.
“The challenge is figuring out a systematic approach to measuring public values such as human rights, and then operationalizing them within organizations.”

Sarfaty, who will teach international law at UBC, is an expert on public and private international law, international economic law, human rights law and regulatory governance.

Learn more about UBC’s Faculty of Law, including a new $100,000 Allard Prize for International Integrity and Human Rights, at www.law.ubc.ca.

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UBC Reports | Vol. 58 | No. 9 | Aug. 23, 2012

New law prof. Galit Sarfaty examines organizational barriers to human rights in the World Bank and other institutions. Martin Dee Photograph

New law prof. Galit Sarfaty examines organizational barriers to human rights in the World Bank and other institutions. Martin Dee Photograph

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