Bank–public sector cooperation in the Vienna Initiative: Addressing the collective action problem through “reverse orchestration”

While global governance through public-private cooperation covers various issues, financial crisis management usually sees private financial institutions (PFIs) prioritize autonomy, leading to only limited and non-institutionalized cooperation. However, the Vienna Initiative (VI), created during the 2008–2009 Central and Eastern European (CEE) crisis, notably established institutionalized cooperation between PFIs and public actors led by the International Monetary Fund (IMF). Why PFIs agreed to formal collaboration that limited their autonomy in this case remains unclear. Previous research suggests public sector pressure and PFIs' strategic interests in the CEE market. However, the former is challenged by the fact that PFIs' voluntary cooperation preceded the VI, and the latter fails to explain the need for extensive institutionalization. This study introduces a new model of global governance and explains the VI case through it: PFIs, aiming to address the crisis but facing the public sector's collective action problem in sharing crisis management costs, adopted a strategy of “reverse orchestration” to resolve this challenge. Specifically, PFIs utilized the IMF as an intermediary to help establish the VI, and the extensive institutionalization reflected PFIs' preference for constraining public actors rather than themselves. This argument is supported through process tracing, which includes original interviews. This study reinterprets the VI case and enhances the broader literature on global governance by illustrating how resourceful private actors can implement reverse orchestration—leveraging international organizations as intermediaries—to influence state behavior according to their interests.