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Greening an international organization: UNIDO’s strategic responses

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The United Nations Industrial Development Organization’s (UNIDO) portfolio of technical cooperation projects changed radically between 1992 and 2004. In 1992, industrial-development-related projects constituted 98% of the portfolio in monetary terms, and environment-related projects 2% while, in 2004, the former constituted 43% and the latter 57%. However, the larger share of the environment-related projects in 2004 was only marginally, if at all, linked to UNIDO’s industrial development agenda. A compelling explanation for this radical change in the organization’s technical cooperation portfolio is provided by a model of strategic choice that draws on resource dependency and institutional approaches and that allows for staff strategic actions. Two factors, UNIDO’s financial and confidence crisis in the 1990s and an organizational culture wedded to industrial development, shaped UNIDO’s strategic responses, which, for the most part, did not integrate environmental concerns into industrial development projects and programs as instructed by its principal governing body.

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  1. The principal agency theory has been used to examine many other IOs and issues that they address. An excellent summary of that literature can be found in Hawkins et al. (2006).

  2. These were three chiefs of the environment branches, the division directors of those divisions responsible for delivery of technical cooperation services, project managers from the two major integrated environmental programs, four project managers of SAE projects, six other sub-sectoral project managers (in areas where there could have been, but were not, major integrated environmental or energy initiatives) and three staff members in the office of the Director General as well as two staff members of the Division of Technology, Industry and Economics of the United Nations Environment Programme (UNEP).

  3. The project number here (EGRER00G35) and numbers elsewhere are the official UNIDO project numbers used for internal designation of projects. All project information is available on the UNIDO intranet website but unfortunately not the internet website.

  4. Two projects accounted for 75% of the implementation of GEF-funded industrial energy efficiency projects, one in China for town and village enterprises (60%) and one in Sri Lanka for energy management in small and medium enterprises (15%).

  5. See Wade (1997: 712-713) for a similar characterization of the attitude of economists at the World Bank in the mid 1990s.

  6. The 16 were industrial policy formulation and implementation; statistics and information networks; metrology, standardization, certification and accreditation; continuous improvement and quality management; investment and technology promotion; environmental policy framework; climate change and the Kyoto Protocol; energy efficiency; rural energy development; cleaner production; pollution control and waste management; the Montreal Protocol; SME policy framework; policy for women’s entrepreneurship development; entrepreneurship development; and upgrading agro-industries and related technical skills. At a later date the 16 were merged into eight expanded service modules (UNIDO 1998b).

  7. Samii et al. (2002) briefly discuss ICPs and the difficulties encountered in their implementation.

  8. During the 1990s, UNIDO records on project implementation show that about 20% of the technical staff were responsible for more than 90% (measured in monetary terms) of the delivery of technical services (UNIDO 2007a).

  9. The dollar amount of service delivery is in current dollars. If it were measured in constant dollars, the decline would have been even greater.

  10. UNIDO’s mandate, which dates from its 1979 Constitution, calls for it to play “… the central role in and be responsible for reviewing and promoting the coordination of all activities in the United Nations system in the field of industrial development.” (UNIDO 1979). Its primary task is “ … to promote industrial development and cooperation on the global, regional and national as well as on the sectoral levels” (UNIDO 1979).

  11. It is ironic that UNIDO, with no expertise in marine ecology, is housed in the same office compound as the larger International Atomic Energy Agency (IAEA). The IAEA had more than 15 marine ecologists on its staff in the 1990s but has yet to design or secure funding for one GEF-funded large-scale marine ecosystem project. However, the IAEA is not interested in securing funds outside its regularly funded technical assistance program because this program is of secondary importance to its primary function of safeguards and inspection. In comparison, UNIDO is purely a technical assistance agency with little upstream or normative work.

  12. They were subject to review by the MLF Secretariat, but that review only examined the technical and cost feasibility of the phase-out of ODS.

  13. No reference to specific concerns about market distortions could be found in the documents of the MLF Secretariat or in the two most complete studies of the implementation of the Montreal Protocol (Anderson and Sarma 2002 and Parson 2003). In addition, this perception held by many but not all professionals implementing ODS projects appears to have justified their not making the additional effort to incorporate industrial development considerations into the implementation of MLF-funded projects.

  14. The three implementing agencies are UNDP, UNEP and the World Bank. During the period of study, UNIDO was only an implementing agency that worked mainly through UNDP.

  15. Until 2007, the three GEF implementing agencies received management fees (in addition to support costs for individual projects) even when GEF-funded projects were executed nationally. The headquarters organization received 6% of total project funds as a management fee and the country office received 3%. This source of funds was a significant share of supplemental operational funds of country programs, particularly for UNDP.

  16. The same combination of the two dichotomous variables (low organizational security and high cultural incongruity) appears to offer a reasonable explanation of the greening of the portfolio of the World Bank based on the research of Nielson and Tierney (2003, 2005). Their research showed that the Bank adopted an avoidance strategy only after a significant threat to World Bank financial resources cracked the dominant developmental/ financial culture. As a result, the percentage of non-GEF environmental projects dollars, both those categorized as primarily environmental and those with significant environmental components, increased in the 1990s but never exceeded 10% of total project dollars in any year (Nielson and Tierney 2005: 792–796). Additional information about missed mainstreaming opportunities in the World Bank portfolio, as qualitatively claimed by Gutner (2005), would be needed to determine if there was only limited integration of environmental considerations into a development agenda as was the case for UNIDO.


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Thanks to C. Weaver for identifying relevant literature, J. Chwieroth and D. Hawkins for answering my questions and two anonymous reviewers for their demanding but useful comments.

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Correspondence to Ralph A. Luken.

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Luken, R.A. Greening an international organization: UNIDO’s strategic responses. Rev Int Organ 4, 159–184 (2009).

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