The EBRD’s mandate may be distinguished from that of other international financial institutions in that it has a political character.
That political character is reflected, inter alia, in Article 1 of the Agreement Establishing the EBRD, which includes a provision that the Bank may only carry out its purpose in those of its recipient member countries (countries of operations) which are “committed to and applying the principles of multiparty democracy, pluralism and market economics”.
Today, the EBRD invests in economies across three continents.
The EBRD tests these political principles in respect of each of its recipient member countries through a detailed political assessment. The assessment is undertaken in accordance with a political methodology that was established when the EBRD first started operating and that was updated in 2013. In conducting the assessment the EBRD uses 14 key criteria, grouped under four headings. In doing so, it relies on reports of relevant organisations listed in the methodology.
Free Elections and Representative Government
1. Free, fair and competitive elections
2. Separation of powers and effective checks and balances
3. Effective power to govern of elected officials
Civil Society, Media and Participation
4. Scale and independence of civil society
5. Independent pluralistic media that operates without censorship
6. Multiple channels of civic and political participation
7. Freedom to form political parties and existence of organised opposition
Rule of Law and Access to Justice
8. Supremacy of the law
9. Independence of the judiciary
10. Government and citizens equally subject to the law
11. Effective policies and institutions to prevent corruption
Civil and Political Rights
12. Freedom of speech, information, religion, conscience, movement, association, assembly and private property
13. Political inclusiveness for women, ethnic and other minorities
14. Freedom from harassment, intimidation and torture
The EBRD has recently enhanced its ability to respond flexibly to important shifts in the political situation in its recipient member countries, by relying on a three-pronged framework in:
- assessing and monitoring the political situation on a regular basis
- engaging with key stakeholders while aligning and coordinating views with key international partners
- adjusting new investment activities and policy engagement as new trends materialise.
By these means, the EBRD is able to respond in an agile fashion to changing circumstances in its recipient member countries and so deliver “more for more,” or conversely, “less for less”, demonstrating a firm commitment to its political mandate and maximising its impact and leverage. In doing so the EBRD applies the following principles:
- consistency of approach
- recognise nuances and variety of contexts
- effective engagement with authorities
- preserve gains already attained
- learn from and take into account the actions of international leading voices on democratic governance (e.g., United Nations, Organization for Security and Co-operation in Europe, Council of Europe)
- engage with key local stakeholders (e.g., civil society)
The assessment process outlined above is described in the Procedures to Implement the Political Aspects of the Mandate of the European Bank for Reconstruction and Development and their addendum The Bank’s Response to Compliance Challenges with the Political Principles in Article 1. These documents have been approved by the EBRD’s Board of Directors. The Procedures were originally adopted in 1991 and were revised in 2013, while the addendum was adopted in 2018 and forms an integral part of the Procedures.