The forthcoming article “Pleasing the Principal: U.S. Influence in World Bank Policymaking” by Richard Clark and Lindsay R. Dolan is summarized by the author(s) below.
Do powerful countries control the behaviors of international organizations? If so, how are they able to wield their influence? These questions are central to understanding not only the role that these organizations play in world politics but also the relationship between institutions and their authorizing members, known as “principals.”
We address these questions by studying the behaviors of the World Bank. Specifically, we investigate a wonky but important practice known as policy conditionality. Borrowing countries are often required to enact domestic policy reforms in exchange for receiving loans from international institutions like the International Monetary Fund and World Bank. Since borrowers would generally prefer loans with no strings attached, conditions are a vital source of bargaining leverage for a lending institution.
Given that the World Bank is widely known to be a U.S.-led institution, it is no surprise that we find that friends of the U.S. receive fewer and less stringent policy conditions (although we are the first to directly show this). What is more surprising is that the U.S. doesn’t even need to ask for these softer packages for its friends; staff just design programs that treat U.S. friends more favorably, thereby “pleasing the principal.” We substantiate this claim by quantitatively analyzing conditions attached to development policy lending between 2005-2018 and by interviewing elites who have participated in these processes.
We propose that staff could be consciously trying to demonstrate to their largest financial backer that their work supports its interests, or they could unconsciously share the worldview of the U.S., and this guides their judgments. Either way, neither borrower countries nor the U.S. need to be especially active for U.S. interests to pervade World Bank policymaking.
Our story contrasts with accounts of “global horse trading” at the IMF, where powerful countries and borrower countries bargain conditions for favors in a quid pro quo (Dreher, Sturm, and Vreeland 2009). These state-led dynamics are less consistent with our evidence than the staff-led explanation we propose. Overall, our findings illustrate how state power in international institutions may be deeply structural, diffuse, and indirect.
About the Author(s): Richard Clark is a PhD Candidate, Department of Political Science, at Columbia University and Lindsay R. Dolan is an Assistant Professor, Department of Government at Wesleyan University. Their research “Pleasing the Principal: U.S. Influence in World Bank Policymaking” is now available in Early View and will appear in a forthcoming issue of the American Journal of Political Science.
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