Controlling coalitions: Social lending at the multilateral development banks

  • Mona M. Lyne
  • Daniel L. NielsonEmail author
  • Michael J. Tierney


Multilateral development banks (MDBs) dramatically increased social lending for health, education, and safety nets after 1985. Yet the great powers’ social policy preferences remained relatively static from 1980 to 2000. This contradicts the conventional view that powerful states control IOs. We argue that highly institutionalized IOs like MDBs require a complete model of possible member-state coalitions encompassing the preferences of all member states—not just major powers. We develop multiple measures of state preferences and include all member states in our coalitional model. We evaluate our model and alternatives with an analysis of more than 10,000 MDB loans from 1980 to 2000. We find that when we include all member states weighted by their voting shares, principal preferences are significantly related to lending outcomes.


Multilateral development banks World Bank Principal-agent theory Coalitions Social lending Foreign aid 
JEL Codes D72 F35 F42 F53 F55 F59 



The authors wish to thank Bill Bernhard, Lawrence Broz, Jeff Frieden, David Lake, Dave Lewis, Lisa Martin, Rich Nielsen, Ryan Powers, Duncan Snidal, and two anonymous referees for helpful comments on previous versions of this paper. We thank Will Brannon, Jess Hovick, Steve Kapfer, Tim Layton, Josh Loud, Chris Miller, Rich Nielsen, Megan Liaboe, Chris O’Keefe, and Phil Scarborough for their help as research assistants on this paper. The data collection for this project was funded by the National Science Foundation, the Bill and Melinda Gates Foundation and the William and Flora Hewlett Foundation.

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Copyright information

© Springer Science + Business Media, LLC 2009

Authors and Affiliations

  • Mona M. Lyne
    • 1
  • Daniel L. Nielson
    • 2
    Email author
  • Michael J. Tierney
    • 3
  1. 1.University of MissouriKansas CityUSA
  2. 2.Brigham Young UniversityProvoUSA
  3. 3.College of William and MaryWilliamsburgUSA

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