The Seeming Paradox of Prevention: Dispute Mitigation by Multilateral Development Banks

A seeming paradox exists when observing the effects of Multilateral Development Banks' (MDB) introduction of heightened standards for pre -infrastructure project community consultation and grievance mechanisms in the early 2000s. Intuitively, expanded grievance channels would seem to result in an aggregation of grievances. However, empirical results demonstrate a different reality. Mirroring findings highlighting the significance of procedural justice mechanisms in the US domestic criminal and public law contexts (Tyler, 2003), 1 global multilateral development banks appear to demonstrate a positive consultative "engagement effect" such that with expanded access to prior consultation and community grievance mechanisms, fewer claims are lodged. Statistical findings from a review of the aggregate percent of total grievances lodged out of total funded projects by ten Multilateral Development Banks following the introduction of heightened standards for pre -project consultation through revised environmental and social frameworks (ESFs) between 2010 and 2020, show that the percentage of grievances per project peaks at 15.4% in 2019 then drops significantly in 2021 to 7.1%. While this overall decline in the percentage of grievance cases could be due to a number of intervening factors including project screening through heightened environmental standards or self-help, overall the findings provide measured evidence supporting the development of increasingly robust community consultation and engagement channels, particularly for multilateral and national development banks which have not yet implemented such policies. These engagement channels, far from aggregating complaints during the period examined, conversely appear to serve as a conduit incorporating community concerns into project design such that disputes are avoided