9. Legal Implications of Membership

This chapter shows that, based on the club principle, membership has multiple legal implications and ramifications. One of the major benefits of membership in international organizations is that members have the right to participate in organizations’ decision-making procedures and be represented in the organizations’ governing bodies. However, traditional state–centric representation mechanisms based on a three-tier governance structure involving governing bodies composed exclusively or predominantly of state-appointed representatives increasingly have become questionable with regard to their functionality, inclusiveness and legitimacy. Substantial benefits may be gained from transforming organizations into multi-actor structures which give, in addition to states and international organizations, also other stakeholders a voice in decision-making. Moreover, there are new trends relating to organizations’ decision-making procedures which may be considered being given a wider application in international organizations. In this context, this chapter focuses on the challenges faced by international organizations regarding their legitimacy, the functionality of their traditional three-tier systems, and their decision-making procedures. As regards organizations’ funding mechanisms, three issues are raised. First, to enhance their effectiveness and impact, international organizations should explore alternative sources of funding, including the private sector, philanthropy, civil society, foundations, and crowd sourcing. Second, new funding mechanisms need to be designed for organizations producing global public goods. Third, special issues apply in the case of international financial institutions, whose capital structures and governance structures are intrinsically linked with membership concepts as they involve the members in their quality of shareholders. The legal structures of concessional windows of international financial institutions, on the other hand, are based on membership concepts only in those cases where they were established as international organizations with international legal personality and legal capacity under national law, but not in those instances where concessional resources are administered under one legal personality together with ordinary capital resources. Depending on the legal structure of concessional windows, different constraints and challenges apply for enhancing their effectiveness by leveraging resources on capital markets. Moreover, linkages exist between membership structures and operational modalities and procurement.