This piece analyzes the institutional challenges and tensions generated by applying the privately produced International Financial Reporting Standards to the financial reporting practices of the International Fund for Agricultural Development (IFAD), an inter-governmental organization, and specialized agency of the United Nations. The authors question whether the application of the Standards is carried out in the interest of the organization or whether it is rather a product of pressure, both external and internal, to adopt rules that reflect a particular understanding of what constitutes ‘best practice’. The authors draw attention to the fact that best practices often become benchmarks for a wide range of institutions, notwithstanding fundamental institutional differences. They argue that the adoption of externally generated rules must be pursued in a systematically cautious, coordinated, and critical manner in order to avoid producing practices that run against the very grain of a public institution’s constitution and mandate. They also argue that robust governance structures are necessary to avoid institutional digressions.
See Mattli & Buthesupra note 62 pp. 12-13 (underscoring the importance of organized participation in standards-setting: “technical expertise and financial resources are necessary but not sufficient conditions for successful involvement in global private-sector standardization. It is timely information and effective representation of domestic interest that confer the critical advantage in these regulatory processes determining who wins or loses. Such representation occurs not through states as in traditional intergovernmental organizations but through domestic private-sector standard-setters.” Or in this case individual agencies that are part of the UN system.