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

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  • Tamar Gutner

Abstract

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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  • Tamar Gutner, 2005. "Explaining the Gaps between Mandate and Performance: Agency Theory and World Bank Environmental Reform," Global Environmental Politics, MIT Press, vol. 5(2), pages 10-37, May.
    • Handle: RePEc:tpr:glenvp:v:5:y:2005:i:2:p:10-37
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    Cited by:

    1. 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, vol. 3(4), pages 1-36, October.
    2. Reinsberg,Bernhard Wilfried & Michaelowa,Katharina & Knack,Stephen, 2015. "Which donors, which funds ? the choice of multilateral funds by bilateral donors at the World Bank," Policy Research Working Paper Series 7441, The World Bank.
    3. 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.
    4. 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.
    5. 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.
    6. Thomas Dörfler & Mirko Heinzel, 2023. "Greening global governance: INGO secretariats and environmental mainstreaming of IOs, 1950 to 2017," The Review of International Organizations, Springer, vol. 18(1), pages 117-143, January.
    7. Humphrey, Chris & Michaelowa, Katharina, 2013. "Shopping for Development: Multilateral Lending, Shareholder Composition and Borrower Preferences," World Development, Elsevier, vol. 44(C), pages 142-155.
    8. 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.
    9. 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.
    10. Sierra, Jazmin & Hochstetler, Kathryn, 2017. "Transnational activist networks and rising powers: transparency and environmental concerns in the Brazilian National Development Bank," LSE Research Online Documents on Economics 79089, London School of Economics and Political Science, LSE Library.
    11. 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.
    12. Ralph Luken, 2009. "Greening an international organization: UNIDO’s strategic responses," The Review of International Organizations, Springer, vol. 4(2), pages 159-184, June.
    13. Daniel Runfola & Ariel BenYishay & Jeffery Tanner & Graeme Buchanan & Jyoteshwar Nagol & Matthias Leu & Seth Goodman & Rachel Trichler & Robert Marty, 2017. "A Top-Down Approach to Estimating Spatially Heterogeneous Impacts of Development Aid on Vegetative Carbon Sequestration," Sustainability, MDPI, vol. 9(3), pages 1-9, March.
    14. Eugenia C. Heldt & Thomas Dörfler, 2022. "Orchestrating private investors for development: How the World Bank revitalizes," Regulation & Governance, John Wiley & Sons, vol. 16(4), pages 1382-1398, October.
    15. 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.
    16. Nina Hall, 2017. "What is adaptation to climate change? Epistemic ambiguity in the climate finance system," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 17(1), pages 37-53, February.
    17. Tareq K. Al-Awad & Motasem N. Saidan & Brian J. Gareau, 2018. "Halon management and ozone-depleting substances control in Jordan," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 18(3), pages 391-408, June.
    18. Maria J. Debre & Hylke Dijkstra, 2023. "Are international organisations in decline? An absolute and relative perspective on institutional change," Global Policy, London School of Economics and Political Science, vol. 14(1), pages 16-30, February.

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