INTRODUCTION

A Rights-Based Economy is not a natural result of market forces; it requires political intentionality and clear purposes to guide the economic organization. Thinking about an RBE is a complex and multidisciplinary task. It demands revisiting every aspect of economic relations from the perspective of rights and questioning the idea of social justice, which is implicitly present in economic theory and in the implementation of economic policy.

An RBE should not limit itself to protecting vulnerable groups in the face of market failures and undesirable social outcomes. Its purpose requires rethinking the organization of the economy as a whole and the distribution of economic resources and outputs based on normative standards offered by human rights. This contrasts with the mainstream economic view, which does away with the moral dimension of the economy and reduces social organization to a calculation problem of maximizing individual utility. The efficient functioning of markets does not necessarily result in an adequate economic organization from a human rights perspective.

This chapter aims to contribute to the discussion of an RBE by bringing the macroeconomic and development dimension into focus. To this end, its first section deals with the elements of a macro policy for an RBE; among these elements are the need to rethink monetary and exchange rate policy and the use of alternative instruments to fight inflation. Additionally, it points out that the logic of fighting inflation with unemployment is contradictory with respect to human rights. This section also addresses fiscal policy, which is crucial for the construction of an RBE, as it defines priorities in the allocation of resources through public spending and taxation. Fiscal policy for an RBE should go beyond Keynesian full employment stabilization and must redefine the concept of fiscal responsibility to include human rights as a final goal.

The following section of this chapter approaches the concepts of growth and development and argues that the literature of Latin American structuralism can help with a formulation of an RBE with a decolonial perspective. An RBE should not be omitted from the discussion of the international system's power hierarchies and from the discussion about sovereignty and economic dependence on peripheral countries.

INTRODUCTION

In 1961, four years after winning political independence for Ghana, President Kwame Nkrumah described Africa as a continent where the paradox of poverty existed amid plenty, and scarcity amid abundance (Worger, Clark & Alpers 2010: 156). He argued that true economic independence could be won only through African unity and solidarity, and saw that era as a unique moment filled with great opportunity for Africa. He believed that, individually, the independent states of Africa – some of them potentially rich, others poor – could do little for their people. Nevertheless, together, by mutual help, they could achieve much (Worger, Clark & Alpers 2010).

Nkrumah's ideas are more important today than ever. Illicit financial flows (IFFs) are eroding current advances in the rule of law, democracy, human rights, social and economic justice and – above all – African unity and solidarity. Revenue leaves Africa via both legal and illegal means, often with African states’ collusion (UNECA 2015). Consequently, African states lack adequate revenue to fulfil their human rights obligations, conduct free, fair and regular elections and pursue peace, security and stability.

In 2016 the “Panama Papers” revealed that prominent political leaders, government officials, judges and people related to them from at least 16 countries in Africa were listed as shareholders, directors and beneficiaries of secret offshore shell and mailbox companies. In 2017 the “Paradise Papers” presented a similar situation regarding at least ten individuals or companies from seven countries in Africa. In 2018 the revelations expanded with information from the “Mauritius leaks”. More recently, in 2021 the Pandora Papers revealed that nearly 50 politicians and public officials from 18 African states were connected to offshore entities.

These revelations confirmed findings by the African Union High-Level Panel on IFFs regarding tax havens, financial secrecy jurisdictions and opacity on beneficial ownership of firms (UNECA 2015). The evidence presented a network of offshore accounts and complicated investment vehicles shrouded in secrecy, allowing tax avoidance and evasion. The South African president, Thabo Mbeki, contended that if not earlier, at least now, firm action from African governments and the rest of the world was essential (UNECA 2015).

INTRODUCTION

States are obligated to fulfil, protect and respect basic economic and social human rights and ensure equal enjoyment of these rights for all. Laissez-faire free-market-centred or neoliberal economic theories, models and policies negatively affect or sometimes violate these human rights, particularly those of women, racial and ethnic minorities and other economically marginalized groups. The impact of the neoliberal economic theories, models and policies adopted by national governments often crosses national borders, affecting human rights in other countries. This is considered strong evidence of the extraterritorial implications of national economic policies, models and policies for human rights.

In this chapter, alternative economies are understood as economic relations and activities that challenge, address or replace these negative consequences of economic relations and the actions of laissez-faire free market economics or neoliberalism. Their concepts, theories and models often diverge from those of mainstream neoclassical economics, on which laissez-faire free-market-based or neoliberal economies, such as market equilibrium, rationality and methodological individualism, are founded.

The interest of policy-makers, activists and scholars in alternative economies is growing more than ever, because of the incapability of current economic systems to prevent and address crises such as climate change and the extraordinarily high levels of inequality. Search for viable alternative economies guaranteeing human rights is one of the most urgent tasks, since unexpected challenges such as Covid-19 and the Russo-Ukrainian war have exacerbated the degree of inequality and increased negative social and economic impacts, especially as politicians with a fascist leaning mobilize those who feel injustice in the current economic and social systems to attack democratic institutions and shape economic relations (Watkins & Seidelman 2019).

In this regard, it is key to address the following questions. What are alternative economies viable, egalitarian and ecologically sound enough to address the negative consequences of a laissez-faire free market? What concepts, theories and models underpin these alternative economies? Do these alternative economies have human rights concerns in their concepts, theories models and/or practices? If they do, in what sense are they human-rights-based economies?

Aiming to answer these questions, this chapter reviews diverse economic models and approaches considered alternatives to the current neoliberal laissez-faire market economy. The chapter explains alternative economies’ conceptual and theoretical underpinnings, focusing on their differences from those with a foundation in the laissez-faire market economy.

INTRODUCTION

The Covid-19 pandemic, combined with the climate crisis, reignited a discussion on the urgent need to transform the economy in a way for it to work both for people and the planet. The consequences of the above-mentioned crises led to hopes that governments would finally undertake much-needed reforms to global economic governance. These hopes have not been realized – at least, not yet. The world is currently facing what economic historians refer to as polycrisis, namely “multiple crises … where the whole is even more dangerous than the sum of the parts” (Tooze 2022). The polycrisis includes rising global inequality, debt distress and political polarization; a worsening hunger crisis; the ongoing consequences of the Covid-19 pandemic; and a closing window of opportunity to prevent the worst impacts of global warming.

Several alternative models have been put forward, and platforms have been created to foster dialogue (Kothari et al. 2019), such as the one led by the Global Tapestry of Alternatives. A common thread is the understanding that the neoliberal economic model, which has dominated the economic policy landscape for the last four decades, has only further entrenched poverty and increased inequalities while fuelling the existential threat of climate change. There is a growing recognition of the need of a new model, system or social contract to tackle the intersecting and compounding crises that the world faces today. However, and as discussed later, there is mixed and patchy political support for these alternatives and divergence in emphasis on the critical elements of a new model across NGOs and social movements. The human rights framework also continues to be marginal to debates about economic alternatives, with some key exceptions.

This chapter summarize the efforts of the Center for Economic and Social Rights in articulating and catalysing a Rights-Based Economy. It explains CESR's vision for this area of work, and discusses a few alternative economic models that are gaining traction and the convergences and divergences that exist between them and an RBE. It concludes with a brief description of CESR's plans to take this work forward with social movements.

INTRODUCTION

Sovereign financing refers to the financial resources raised by governments to fund public expenditure. It is an essential tool for contemporary governments to finance economic and social policy, as taxation and other forms of domestic resource mobilization are often insufficient to cover all public services and capital expenditure. Sovereign financing also plays a key role in overcoming temporary financial crises and providing relief from unexpected economic shocks and natural disasters. In today's globalized economy, sovereigns can access funds from a variety of sources, such as grants from official and non-governmental donors, export credits, equity investments, sovereign bonds, loans and guarantees from international financial institutions (IFIs), bilateral development finance institutions (DFIs) and private banks and insurers.

The financial obligations undertaken by sovereigns that are not direct monetary transfers, such as official development assistance (ODA) grants, are considered to form part of their sovereign debt liabilities that governments are expected to repay in accordance with the terms of the debt contract. The contracting of such debt by sovereigns can contribute towards and facilitate serious and systematic violations of human rights (Bohoslavsky & Černič 2014; Tan 2013; Wong 2012). Legal and political institutions, such as parliaments and finance ministries, shape sovereign borrowing practices, but sovereign financing also shapes state political institutions and governments’ capacity to respect, protect and fulfil human rights (Bohoslavsky & Černič 2014).

External finance to states can initiate, contribute to or compound human rights violations, both actively and by omission. Poorly contracted and badly managed sovereign finance can lead to unsustainable debt burdens and economic programming that can impact on countries’ ability to meet human rights obligations to their populations (Bantekas & Lumina 2018; Bohoslavsky 2012). Sovereign debt can also be contracted for the purposes of shoring up repressive governments or maintaining authoritarian, corrupt and/or inefficient regimes. Individual projects funded by external financiers, such as IFIs, DFIs or export credit agencies (ECAs), can also lead to human rights violations (Aizawa, dos Santos & Seck 2018; Černič 2014).

This chapter examines the relationship between sovereign financing and human rights, notably the role of official sovereign financiers, in contributing to and/or sustaining the commission or perpetuation of human rights violations in the recipient states of such financing.

INTRODUCTION

The current paradigm of the global economy is characterized by three broad features. First, neoliberalism, and its enduring agenda of liberalization, privatization and deregulation (Craig & Porter 2006). Since the 1970s neoliberalism has led to the deployment of the state to serve the interests of corporations and private investors rather than to fulfil people's rights. Second, the economic financialization, or the systemic deregulation of finance capital, whereby financial markets, motives, institutions and elites dominate the global economy, affecting everything, from production, consumption and regulation to health. And, third, intellectual monopoly capitalism, in which owners of intellectual property act as a monopoly force by reducing competi-tive supply, excluding others from using patented knowledge and increasing prices. At the centre of these paradigms is the overarching emphasis on export-oriented development models for the Global South through fossil-fuel-dependent global value chains and private investment governed by developed countries.

The historical extraction of ecological colonialism has expanded in scale and sophistication by exporting primary commodities and natural resources, such as timber, coffee, cotton and sugar (Malm 2016). The manifold harms of air pollution, soil erosion, desertification, deforestation and monocrops replace a diversity of local production, exploit many workers and often violate their human rights and exacerbate climate change. Unsurprisingly, the climate catastrophes we witness today are being felt the hardest in countries where colonization decimated natural resources, altered infrastructures and compromised traditional ways of living that respect the environment (Perry 2020). Powerful corporations and markets controlled by colonizers become the foundation of a “global economy” underpinned by several centuries of strategies of wealth drain, slavery or indentured servitude, deindustrialization and the creation of commodity and extractive enclaves.

A feminist and decolonial Global Green New Deal (GGND) is a collective project within the ecological and climate justice social movements to radically reimagine these reigning paradigms towards redistribution, equity and praxis of reparations, linking it to structural change and ideological transformation. A feminist and decolonial GGND resists the socially constructed hierarchies of racial, gender, class, caste sexuality and ability-based inequalities, which underpin colonial, neoliberal and capitalist structures, ideas and societies. It recognizes that the current ecological collapse directly results from an unequal social contract in which these hierarchies shape our social and economic relations.

INTRODUCTION

Corporations are a key driver of the free market economy in a globalized world. Because of their omnipresent role in today's economy, people have become fully dependent on corporations. They “determine what we eat, what we watch, what we wear, where we work, and what we do” (Bakan 2004: 5). Corporations – more precisely, the tiny percentage of people heading such corporations – are also the key beneficiary of the current free market economy. To illustrate, over the last ten years “the richest 1% of humanity has captured more than half of all new global wealth. Since 2020, … this wealth grab by the super-rich has accelerated, and the richest 1% have captured almost two-thirds of all new wealth” (Oxfam International 2023: 8).

Even when people may seem to be benefiting from globalized free markets, they are, in essence, at the service of corporations. For example, although global supply chains may offer a variety of cheap products and create employment in developing countries, they are also sites of exploitation of workers and outsourcing of environmental pollution to the Global South. In the name of freedom, convenience and flexibility, gig workers have bartered their employee status and all related benefits under labour laws. Similarly, people using free internet are (un)consciously becoming subjects of unconscionable data mining.

In parallel – as well as in response – to the rise in corporate power and wealth, there has been the growth of business and human rights (BHR) as a distinct field, with its own set of standards articulating human rights responsibilities of corporations. The United Nations Guiding Principles on Business and Human Rights (UNGPs) have become the posterchild of the BHR field. The UNGPs envisage all business enterprises respecting all internationally recognized human rights. They also prescribe human rights due diligence (HRDD) as the primary tool to “know and show” how corporations respect human rights (UN HRC 2011b). This voluntary responsibility to conduct regular HRDD is increasingly hardening into a legal obligation, primarily as a result of the emergence of mandatory HRDD laws in Europe (European Coalition for Corporate Justice 2022). The most recent addition to this trend is the draft proposal of the Corporate Sustainability Due Diligence Directive (CSDDD), released in February 2022 (European Parliament 2022).

INTRODUCTION

In 2018 the Astana Declaration was endorsed by all World Health Organization (WHO) member states, 40 years after the Alma Ata Declaration, which committed governments to provide “health for all”. Although this was ostensibly a celebration of four decades of work promoting primary healthcare (PHC) and universal health provision, critics used it as a moment to reflect on how far the global health agenda has moved away from the commitment to social justice and the right to health that is at the core of the Alma Ata Declaration.

The debate around a universal provision in health is highly contested and open to diverse interpretations of universalism and the best way to implement and finance the universal health coverage (UHC) agenda (Yi, Koechlein & de Negri Filho 2017). Nevertheless, critics argue that UHC typically encourages systems with state-purchased services, provided either entirely by the private sector or by a mix of private and public providers. Such configurations encourage the participation of private, for-profit insurance corporations. Benefits packages purchased in these configurations generally utilize tiers for the poor and non-poor (Smithers & Waitzkin 2022: 1). For the People's Health Movement (PHM), a global movement of health activists, academics and civil society organizations, the Astana Declaration clearly articulated this shift. It became the “de facto international strategy for financing health services” (PHM 2022: 86).

Within this vision, governments are relegated to a regulatory and governing role. Thus, if states are no longer tasked with financing healthcare services, what does this mean for the right to health? As of 2022 171 state parties have signed up to the International Covenant on Economic, Social and Cultural Rights (ICESCR), which recognizes the right to health (UNGA 1966: art. 12). The right to the highest attainable standard of health is codified in numerous legally binding international and regional human rights treaties, and over 100 constitutions worldwide (Khosla, Allotey & Gruskin 2022). Furthermore, there is also a consensus on the importance of a holistic view of this right. Paul Hunt (2006: 604), former special rapporteur on the right to health, contends:

EMERGENCE OF A RIGHTS-BASED ECONOMY

In order to transform the economy and society, we first need to recognize that contemporary markets are largely a product of a concentrated effort of economization, defined as a set of practices that leads to the establishment and maintenance of economic markets (Çalışkan & Callon 2009). Economization since the Second World War – namely with the foundation of the Bretton Woods institutions in 1944 – has expanded the reach of Global North market actors and investors into countries in the Global South. The end of the gold standard in 1971 set in motion the shift towards flexible exchange rates and the end of capital controls, with the simultaneous rise of offshore tax havens (Bullough 2023; Shaxson 2005). The late 1970s and early 1980s saw the “Big Bang” of deregulation such as the control of capital, currency exchange, separation of investment from retail banking and other banking regulation. This caused risks to the wider economy and society in the form of successive financial crises, which led to large-scale bailouts of economic sectors, in most cases by states. Governments ended up enacting austerity measures and prioritizing in “saving the economy” rather than prioritizing human rights, as we have seen in particular both during and after the Covid-19 pandemic (Oxfam International 2023; Ortiz & Cummins 2022; FTC 2022).

Parallel to the rise of the dominant discourse of marketization, this volume has analysed the rise of the human rights language as the universally accepted “lexicon” that has been developed over the same period – since the Second World War (Balakrishnan, Heintz & Elson 2016; Dommen 2022; Bachelet 2021). Human rights have grown in importance as a counter-narrative to growing trends of economization and marketization. For instance, some governments are now looking to prioritize the human rights of their population by expanding fiscal resources through greater taxation of extractive industries, high incomes and wealth (Gobierno de Chile 2023). This trend is particularly evident with the growth in both recognition and articulation of the existence of economic, social and cultural rights (ESCRs), which originate from the Universal Declaration of Human Rights (UDHR).

INTRODUCTION

The development and enforcement of sound fiscal law and policy are essential for the realization of human rights (Kohonen, Waris & Christensen 2011: 78). Fair, just and principled use, management and distribution of public resources constitute the core of a human-rights-centred response (Waris 2013). The United Nations’ Human Rights Council (HRC) has recalled the primary obligation of every state to promote people's economic, social and cultural development, acknowledging that inequality continues to increase worldwide and contributes to social exclusion and the marginalization of certain groups and individuals (UNGA 2022a: para. 5).

Unequal revenue collection within and between countries is a partial cause of uneven wealth distribution and the pervasive increase in poverty and exclusion around the world. Furthermore, states continue to face severe difficulties in properly assessing and efficiently collecting revenue. Because of this, one key area in discussing fiscal issues is the taxation of cross-border transactions. When wealthier individuals and business institutions that transact across borders are able to use the international fiscal system to their advantage, fewer resources may be available for public services and human rights. Inequality can be exacerbated by the existing international financial architecture and its weaknesses and loopholes.

The movement of money across borders when either the method of movement, its earning or its use is not legal is referred to as an illicit financial flow (IFF) (UN Economic Commission for Africa [UNECA] 2015: 9). IFFs reduce the resources countries could otherwise use to finance the protection, promotion and progressive realization of all human rights.

Although there are many different forms and definitions of illicit financial flows, tax and commercial-related IFFs – particularly those resulting from tax avoidance and evasion and the planning activities of transnational corporations, such as trade mis-invoicing, transfer pricing and the shifting of profits into or through low-tax offshore jurisdictions – are the most significant components of such flows on a global scale, resulting in significant tax revenue losses for governments around the world.

According to The State of Tax Justice 2021, countries lose $483 billion in revenues a year, which includes $312 billion owing to cross-border corporate tax abuse and $171 billion due to offshore tax abuse by wealthy individuals (TJN 2021: 10). Tax-related IFFs are therefore crucial, as they represent lost state revenue that could have been used to finance state activity.