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Explaining the Gaps between Mandate and Performance: Agency Theory and World Bank Environmental Reform


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  • Tamar Gutner
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    This article seeks to explain why the World Bank's environmental performance is so uneven despite numerous reform efforts. I argue that a principal-agent model offers a potentially powerful tool for analyzing gaps between the mandates and performance of international organizations (IOs) such as the World Bank. The model is particularly useful when it is calibrated to recognize problems of antinomic delegation and the dual role an IO may have as both agent and principal. Antinomic delegation occurs when states ask IOs to take on complex tasks that are difficult to institutionalize. Recognizing that many IOs may be principal and agent at different stages of the policy process reveals more opportunities for agency slack that are not well addressed by the IO literature. This article presents these modifications to the principal-agent model and applies the model to the case of the World Bank. The case study demonstrates that the nature of the tasks being delegated and the incentives shaping both sides of the principal-agent relationship are key sources of disconnect between the institution's stated goals and its performance. Copyright (c) 2005 Massachusetts Institute of Technology.

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    Bibliographic Info

    Article provided by MIT Press in its journal Global Environmental Politics.

    Volume (Year): 5 (2005)
    Issue (Month): 2 (05)
    Pages: 10-37

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    Handle: RePEc:tpr:glenvp:v:5:y:2005:i:2:p:10-37

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    Cited by:
    1. Buntaine, Mark T., 2011. "Does the Asian Development Bank Respond to Past Environmental Performance when Allocating Environmentally Risky Financing?," World Development, Elsevier, vol. 39(3), pages 336-350, March.
    2. Humphrey, Chris & Michaelowa, Katharina, 2013. "Shopping for Development: Multilateral Lending, Shareholder Composition and Borrower Preferences," World Development, Elsevier, vol. 44(C), pages 142-155.
    3. Manfred Elsig, 2010. "The World Trade Organization at work: Performance in a member-driven milieu," The Review of International Organizations, Springer, vol. 5(3), pages 345-363, September.
    4. Ralph Luken, 2009. "Greening an international organization: UNIDO’s strategic responses," The Review of International Organizations, Springer, vol. 4(2), pages 159-184, June.
    5. Axel Michaelowa & Katharina Michaelowa, 2011. "Climate business for poverty reduction? The role of the World Bank," The Review of International Organizations, Springer, vol. 6(3), pages 259-286, September.
    6. Michaelowa, Katharina & Humphrey, Chris, 2011. "The Business of Development: Trends in Lending by Multilateral Development Banks to Latin America, 1980-2009," Proceedings of the German Development Economics Conference, Berlin 2011 57, Verein für Socialpolitik, Research Committee Development Economics.
    7. Tamar Gutner & Alexander Thompson, 2010. "The politics of IO performance: A framework," The Review of International Organizations, Springer, vol. 5(3), pages 227-248, September.
    8. Michael Lipson, 2010. "Performance under ambiguity: International organization performance in UN peacekeeping," The Review of International Organizations, Springer, vol. 5(3), pages 249-284, September.
    9. Helen Milner & Dustin Tingley, 2013. "The choice for multilateralism: Foreign aid and American foreign policy," The Review of International Organizations, Springer, vol. 8(3), pages 313-341, September.
    10. Alexandra Lindenthal & Martin Koch, 2013. "The Bretton Woods Institutions and the Environment: Organizational Learning within the World Bank and the International Monetary Fund (IMF)," Administrative Sciences, MDPI, Open Access Journal, vol. 3(4), pages 166-201, October.


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