Controlling coalitions: Social lending at the multilateral development banks

  • Mona M. Lyne
  • Daniel L. Nielson
  • Michael J. Tierney
Article

Abstract

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.

Keywords

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

Supplementary material

11558_2009_9069_MOESM1_ESM.pdf (36 kb)
ESM 1(PDF 36 kb)
11558_2009_9069_MOESM2_ESM.dta (11.2 mb)
ESM 2(DTA 11488 kb)
11558_2009_9069_MOESM3_ESM.dta (11.2 mb)
ESM 3(DTA 11488 kb)
11558_2009_9069_MOESM4_ESM.dta (11.2 mb)
ESM 4(DTA 11488 kb)
11558_2009_9069_MOESM5_ESM.dta (11.2 mb)
ESM 5(DTA 11488 kb)
11558_2009_9069_MOESM6_ESM.dta (11.2 mb)
ESM 6(DTA 11488 kb)
11558_2009_9069_MOESM7_ESM.do (3 kb)
ESM 7(DO 3 kb)
11558_2009_9069_MOESM8_ESM.do (3 kb)
ESM 8(DO 3 kb)
11558_2009_9069_MOESM9_ESM.do (4 kb)
ESM 9(DO 3 kb)
11558_2009_9069_MOESM10_ESM.do (1 kb)
ESM 10(DO 1 kb)

References

  1. Aghion, P., & Tirole, J. (1997). Formal and real authority in organizations. Journal of Political Economy, 105, 29–44.CrossRefGoogle Scholar
  2. Andersen, T. B., Harr, T., & Tarp, F. (2006a). On US politics and IMF Lending. European Economic Review, 50, 1843–1852.CrossRefGoogle Scholar
  3. Andersen, T. B., Hansen, H., & Markussen, T. (2006b). U.S. politics and World Bank-IDA lending. Journal of Development Studies, 42, 772–794.CrossRefGoogle Scholar
  4. Ascher, W. (1992). The World Bank and U.S. control. In M. P. Karns & K. A. Mingst (Eds.), The United States and multilateral institutions: patterns of changing instrumentality and influence. London: Routledge.Google Scholar
  5. Barnett, M. N. (2003). Eyewitness to a genocide: the United Nations and Rwanda. Ithaca: Cornell University Press.Google Scholar
  6. Barnett, M. N., & Finnemore, M. (1999). The politics, power, and pathologies of international organizations. International Organization, 54, 699–732.CrossRefGoogle Scholar
  7. Copelovitch, M. (2009). Master or servant? International Studies Quarterly: Common Agency and the Political Economy of IMF Lending. in press.Google Scholar
  8. Easterly, W. (2001). The elusive quest for growth: Economists adventures and mis-adventures in the tropics. MIT University Press.Google Scholar
  9. Easterly, W. (2002). The cartel of good intentions: The political problem of bureaucracy in foreign aid. Journal of Policy Reform, 5, 223–250.CrossRefGoogle Scholar
  10. Fleck, R. K., & Kilby, C. (2006). World Bank independence: A model and statistical analysis of US influence. Review of Development Economics, 10, 224–240.Google Scholar
  11. Frieden, J. A. (2004). One Europe, one vote? The political economy of European union representation in international organizations. European Union Politics, 5, 261–276.CrossRefGoogle Scholar
  12. Gilpin, R. (1987). The political economy of international relations. Princeton: Princeton University Press.Google Scholar
  13. Grieco, J. (1988). Anarchy and the limits of cooperation: A realist critique of the newest liberal institutionalism. International Organization, 42, 485–508.CrossRefGoogle Scholar
  14. Grieco, J. (1990). Cooperation among nations: europe, america, and non-tariff barriers to trade. Ithaca: Cornell University Press.Google Scholar
  15. Gruber, L. (2000). Ruling the world: Power politics and the rise of supranational institutions. Princeton University Press.Google Scholar
  16. Hicks, R., Parks, B., Roberts, T., & Tierney, M. J. (2008). Greening aid? Understanding the environmental impact of development assistance. Oxford University Press.Google Scholar
  17. Imbeau, L. M. (1988). Aid and ideology. European Journal of Political Research, 16, 3–28.CrossRefGoogle Scholar
  18. Kaja, A., & Werker, E. (2009). Corporate mis-governance at the World Bank. Harvard Business School Working Paper No. 09-108.Google Scholar
  19. Kapur, D., Lewis, J., & Webb, R. (1997). The World Bank: its first half-century. Washington, DC: Brookings Institution.Google Scholar
  20. Katzenstein, P. (1985). Small States in World markets: Industrial policy in Europe. Ithaca: Cornell University Press.Google Scholar
  21. Keohane, R. (1984). After hegemony: Cooperation and discord in the world political economy. Princeton: Princeton University Press.Google Scholar
  22. Kilby, C. (2006). Donor influence in multilateral development banks: the case of the Asian Development Bank. Review of International Organizations, 1, 173–195.CrossRefGoogle Scholar
  23. King, G., Honaker, J., Joseph, A., & Scheve, K. (2001). Analyzing incomplete political science data: An alternative algorithm for multiple imputation. American Political Science Review, 95(1), 49–69.Google Scholar
  24. Klepak, H. (2003). Power multiplied or power restrained? The United States and multilateral institutions in the Americas. In R. Foot, S. N. MacFarlane, & M. Mastanduno (Eds.), US hegemony and international organizations (pp. 239–264). New York: Oxford University Press.CrossRefGoogle Scholar
  25. Krasner, S. (1976). State power and the structure of international trade. World Politics, 28, 317–343.CrossRefGoogle Scholar
  26. Krasner, S. (1985). Structural conflict: The third world against global liberalism. Berkeley: University of California Press.Google Scholar
  27. Lake, D. (1999). Entangling relations: American foreign policy in its century. Princeton: Princeton University Press.Google Scholar
  28. Laver, M., & Schofield, N. (1990). Multiparty government: The politics of coalition in Europe. New York: Oxford University Press.Google Scholar
  29. Lumsdaine, D. (1993). Moral vision in international politics: The foreign aid regime, 1949–1989. Princeton: Princeton University Press.Google Scholar
  30. Mallaby, S. (2004). The world’s banker. New York: The Penguin.Google Scholar
  31. Martin, L. L. (1992). Coercive cooperation: Explaining multilateral economic sanctions. Princeton: Princeton University Press.Google Scholar
  32. McKeowen, T. & Yackee, J. (2000). The political determinants of IMF lending. presented at the Midwest Political Science Association, Chicago.Google Scholar
  33. Mearsheimer, J. (1994/95). The false promise of international institutions. International Security, 19, 5–49.CrossRefGoogle Scholar
  34. Milner, H. (2006). Why multilaterailsm? Foreign aid and domestic principal-agent problems. In Hawkins et al. (Eds.), Delegation and agency in international organizations. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
  35. Moravcsik, A. (1991). Negotiating the single European act: National interests and conventional statecraft in the European community. International Organization, 45, 19–56.CrossRefGoogle Scholar
  36. Moravcsik, A. (1998). The choice for Europe: Social purpose and state power from Messina to Maastricht. Ithaca: Cornell University Press.Google Scholar
  37. Nielson, D., & Tierney, M. (2003). Delegation to international organizations: Agency theory and World Bank environmental reform. International Organization, 57, 241–276.CrossRefGoogle Scholar
  38. Noel, A., & Therien, J. P. (1995). From domestic to international justice: the welfare state and foreign aid. International Organization, 49, 523–553.CrossRefGoogle Scholar
  39. Oatley, T. & Yackee, J. (2000). Political determinants of IMF balance of payments lending: The curse of carabosse? Working Paper. Chapel Hill: University of North Carolina, Chapel Hill.Google Scholar
  40. Oatley, T., & Yackee, J. (2004). American interests and IMF lending. Working Paper. Chapel Hill: University of North Carolina, Chapel Hill.Google Scholar
  41. Pierson, P. (1996). The path to European integration: A historical institutionalist analysis. Comparative Political Studies, 29, 123–63.CrossRefGoogle Scholar
  42. Rich, B. (1994). Mortgaging the earth: The World Bank, environmental impoverishment, and the crisis of development. Boston: Beacon.Google Scholar
  43. Snidal, D. (1985). The game theory of international politics. World Politics, 38, 25–57.CrossRefGoogle Scholar
  44. Sandholtz, W., & Zysman, J. (1989). Recasting the European bargain. World Politics, 42, 95–128.CrossRefGoogle Scholar
  45. Stokke, O. (1989). The determinants of Norwegian aid policy. In O. Stokke (Ed.), Western middle powers and global poverty: The determinants of the aid policies of Canada, Denmark, The Netherlands, Norway and Sweden. Uppsala and Oslo: The Scandinavian Institute of African Studies in cooperation with The Norwegian Institute of International Affairs.Google Scholar
  46. Stone, R. W. (2002). Lending credibility: The international monetary fund and the post-communist transition. Princeton University Press: Princeton.Google Scholar
  47. Strand, J. R. (2003a). Measuring voting power in an international institution: The United States and the Inter-American development bank. Economics of Governance, 4, 19–36.CrossRefGoogle Scholar
  48. Strand, J. R. (2003b). Power relations in an embedded institution: The European bank for reconstruction and development. Journal of European Integration, 25, 113–127.CrossRefGoogle Scholar
  49. Thacker, S. C. (1999). The high politics of IMF lending. World Politics, 52, 38–75.Google Scholar
  50. Tierney, M. J. (2008). Delegation success and policy failure: Collective delegation and the search for Iraqi weapons of mass destruction. Law and Contemporary Problems, 71, 283–312.Google Scholar
  51. Udall, L. (1998). The World Bank and public accountability: Has anything changed? In J. Fox & D. Brown (Eds.), The struggle for accountability: The World Bank, NGOs, and grassroots movements (pp. 391–436). Cambridge: MIT.Google Scholar
  52. Upton, B. (2000). The multilateral development banks: improving U.S. leadership. Westport: Praeger.Google Scholar
  53. Wade, R. (2001). The US role in the Malaise at the World Bank: get up gulliver. Paper for G-24 Middle Income Countries Report.Google Scholar
  54. Woods, N. (2003). The United States and international financial institutions: Power and influence within the World Bank and the IMF. In R. Foot, S. N. MacFarlane & M. Mastanduno (Eds.), US hegemony and international organizations (pp. 92–114). New York: Oxford University Press.CrossRefGoogle Scholar
  55. World Bank. (2001). World development indicators. Washington, DC: World Bank.Google Scholar

Copyright information

© Springer Science + Business Media, LLC 2009

Authors and Affiliations

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

Personalised recommendations