Multilateral Development Banks as Agents of Private Contract

This article shows how and in what manner international financial institutions (ifis) and multilateral development banks (mdbs) have complemented their public international law character with the extensive use of private (contract) law for the purpose of attracting and disbursing funds. The following analysis contains selective examples of such innovative contractual practices by a number of ifis, i.e., the legal framework of intergovernmental trust funds, the contractual relationships with private donors, donor commitments by public donors, and the extensive use of memoranda of understanding (MoU). Finally, the constitutional, democratic, and human rights implications of the use of MoUs in the case of the Greek sovereign debt crisis are highlighted. This brief case study sheds light on the possible normative implications of the use of private (contract) law as a substitute for more traditional treaties.