Abstract
The paper provides a framework for analysing control problems in international organisations and reviews the disparate evidence from a public-choice perspective. Most examples concern the European Union, the International Monetary Fund, the World Bank and the International Labour Organisation. International organisations suffer from principal-agent problems more than other public or private organisations do because the chain of delegation is more extended. As survey evidence demonstrates, the actors in international organisations do not share the preferences of the citizens because they have vested interests, and the citizens believe that they have least influence at the international level. The paper argues that national and international parliaments, the national governments and international supervisory boards or courts cannot solve the principal-agent problem due to severe information cost and weak or distorted incentives.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
References
Alter, Karen J. (2002). “Delegating to International Courts,” paper prepared for the Utah conference on Delegation to International Organizations, Northwestern University, mimeo.
Andersen, S. S., & Eliasson, K. A. (1991). European community lobbying. European Journal of Political Research, 20, 173–187.
Artis, Michael J. (1988, July 1–49). How accurate is the World Economic Outlook? Staff Studies for the World Economic Outlook, International Monetary Fund.
Besley, Timothy, & Case, Anne (1995). Incumbent behavior: Vote-seeking, tax setting, and yardstick competition. American Economic Review, 85, 25–45.
Boockmann, Bernhard, & Vaubel, Roland (2005). The theory of raising rivals’ costs and evidence from the international labor organisation, University of Mannheim, mimeo.
Brunner, Karl, & Meltzer Allan H. (1990). Money and the economy. Issues in Monetary Analysis, Cambridge.
Cole, Richard L., Kincaid, John, & Rodriguez Alejandro (2004). Public opinion on federalism and federal political culture in Canada, Mexico, and the United States. Publius: The Journal of Federalism, 34.2, 201–221.
Craine, Mark W., & McCormick, Robert E. (1984). Regulators as an interest group. In James M. Buchanan, & Gordon Tullock (Eds.), The theory of public choice—II (pp. 287–304). Ann Arbor, Michigan.
Dahl, Robert A., & Tufte Edward R. (1973). Size and Democracy. Stanford, California.
Dreher, Axel, & Vaubel, Roland (2004). Do IMF and IBRD cause moral hazard and political business cycles? Evidence from panel data. Open Economies Review, 15, 1–22.
Eichener, Volker (1995). European health and safety regulation: No ‘Race to the Bottom.’ In Brigitte Unger & Frans van Warden (Eds.), Convergence or diversity: Internationalization and economic policy response (pp. 229–251). Aldershot.
Falke, Josef (1996). Comitology and other committees. A preliminary empirical assessment. In R. H. Pedler & G. F. Schäfer (Eds.), Shaping european law and policy. The role of committees and comitology in the political process. European Institute of Public Administration, Maastricht: 132 ff.
Federalist Papers (1787/1987). Ida Kramnick (Ed.), Middlesex.
Fisman, Raymond, & Gatti, Roberta (2002). Decentralization and corruption: evidence across countries. Journal of Public Economics, 83, 325–345.
Fratianni, Michele, & Pattison, John C. (1976). The economics of the OECD. In K. Brunner & A. H. Meltzer (Eds.), Institutions, policies and economic performance, Carnegie-Rochester conference series on public policy (pp. 75–153). Amsterdam.
Frey, Bruno S. (1984). The public-choice view of international political economy. International Organization, 38, 199–223.
Frey, Bruno S. (1985). Internationale Politische Ökonomie, München.
Frey, Bruno S., & Stutzer, Alois (2006). Strenghening the Citizens’ Role in International Organizations. The Review of International Organizations, 1, 27–44.
Gerster, Richard (1993). Accountability of executive directors in Bretton Woods institutions. Journal of World Trade, 27, 88–116.
Haberler, Gottfried (1974). Economic Growth and Stability, Los Angeles, California.
Irwin, Michael H. K. (1994). Banking on poverty: An insider’s look at the World Bank. In K. Danaher (Hg.), 50 Years is Enough. The Case against the World Bank and the International Monetary Fund (pp. 152–160). Boston.
Kenen, Peter B., & Schwartz, Stephen B. (1986). The assessment of macroeconomic forecasts in the international monetary fund’s world economic outlook. Working Papers in International Economics, No. G-86-40, Princeton University.
Kuhn, Britta (1993). Sozialraum Europa: Zentralisierung oder Dezentralisierung der Sozialpolitik? Idstein.
Martin, Lisa L. (2002). Agency and delegation in IMF conditionality. Paper prepared for the Utah Conference on Delegation to International Organizations, mimeo.
Moesen, Wim, & van Cauwenberge, Philippe (2000). The status of the budget constraint, federalism and the relative size of government: A bureaucracy approach. Public Choice, 104, 207–224.
Noelle-Neumann, Elisabeth (2002). Sind Parteispenden unmoralisch? Frankfurter Allgemeine Zeitung, 15.05.02.
Noury, Abdul G., & Roland, Gérard (2002). More power to the European Parliament? Economic Policy, 17, 281–319.
O’Reilly, Jacqueline, Reissert, Bernd, & Eichener, Volker (1996). European regulation of social standards: Social security, working time, workplace participation, occupational health and safety. In Günter Schmid, J. O’Reilly, & K. Schömann (Eds.), International handbook of labour market policy and evaluation (pp. 868–898). Cheltenham.
Peirce, William S. (1991). Unanimous decisions in a redistributive context: The council of ministers of the European Communities. In R. Vaubel & Thomas D. Willett (Eds.), The political economy of international organizations: A public choice approach (pp. 267–285). Boulder, Colorado.
Schmitt, Hermann, & Jacques Thomassen (Eds.). (1999). Political Representation and Legitimacy in the European Union, Oxford.
Schneider, Mark (1989). Intercity competition and the size of the local public workforce. Public Choice, 63, 253–265.
Vaubel, Roland (1991). The political economy of the International Monetary Fund: A public-choice approach. In R. Vaubel & Thomas D. Willett (Eds.), The political economy of international organizations: A public-choice approach (pp. 204–244). Boulder, Colorado.
Vaubel, Roland (1994). The political economy of centralization and the European Community. Public Choice, 81, 151–190.
Vaubel, Roland (1996). Bureaucracy at the IMF and the World Bank: a comparison of the evidence. The World Economy, 19, 195–210.
Vaubel, Roland (1999). Enforcing competition among governments: Theory and application to the European Union. Constitutional Political Economy, 10, 327–338.
Vaubel, Roland (2004). Federation with majority decisions: economic lessons from the history of the United States, Germany and the European Union. Economic Affairs, 24, 53–59.
Vaubel, Roland, Dreher, Axel, & Soylu, Ugurlu (2005). Staff growth in international organisations: A principal-agent problem? An empirical analysis. In John-ren Chen, & David Sapsford (Eds.), Cooperative global governance by international institutions: principles and challenges. Cheltenham (also accepted for the journal Public Choice).
Author information
Authors and Affiliations
Corresponding author
Additional information
JEL codes
H79 · H11
Rights and permissions
About this article
Cite this article
Vaubel, R. Principal-agent problems in international organizations. Rev Int Orgs 1, 125–138 (2006). https://doi.org/10.1007/s11558-006-8340-z
Received:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s11558-006-8340-z