Follow the Money: How Trends in Financing Are Changing Governance at International Organizations
| Date | 01 August 2017 |
| DOI | http://doi.org/10.1111/1758-5899.12450 |
| Author | Erin R. Graham |
| Published date | 01 August 2017 |
Follow the Money: How Trends in Financing
Are Changing Governance at International
Organizations
Erin R. Graham
Drexel University
Abstract
This article considers how trends in financing are changing governance at intergovernmental organizations (IGOs). Over the
course of the twentieth century IGO funding rules changed in two important ways. First, they were altered to allow states
greater control over the financial contributions they provide, allowing states to ‘earmark’contributions. Second, funding rules
made private actors eligible contributors, providing an important entry point for private actor influence. I focus on three pri-
mary effects of these changes on IGO governance: (1) how the increased reliance on earmarked contributions undermines tra-
ditional conceptions of multilateral governance; (2) how private actors are empowered by their ability to earmark resources as
they emerge as major funders; and (3) on the surge in ‘minilateral’governance associated with the rise of pooled funding
mechanisms. I draw on delegation theory to illustrate these changes conceptually and provide examples from a wide variety
of institutions within and outside the UN system. I conclude by outlining fruitful avenues for research on financing IGOs.
Policy Implications
•Member states should work to loosen or remove the restrictions they place on earmarked funding to restore multilateral
governance over a larger portion of IGO resources.
•IGOs and international relations scholars should conduct systematic empirical analysis to assess how earmarked resources
are distributed across issues and countries relative to mandatory and core funding.
•IGO staff should be ready to turn down earmarked funding when the interests or actions of a donor raise conflict of inter-
est issues.
•IGOs should improve the transparency of governance arrangements over pooled funding mechanisms
Governance of intergovernmental organizations in
a changing resource landscape
Despite the familiar dictum to ‘follow the money’, scholarly
work on intergovernmental organizations (IGOs) has not
often focused on questions of financing.
1
This oversight left
international relations (IR) scholars with little to say about
important changes that have occurred in the ways that IGOs
are resourced. Recent work brings welcome progress on this
front. Scholarship on IGO resourcing seeks to understand
donor influence (Sridhar and Woods, 2013; 2015; Reinsberg,
2017), explain donor funding choices (Bayram and Graham,
forthcoming; Reinsberg et al., 2015; Nielson et al., Forthcom-
ing), and assess the effects of financial rules and budgeting
on key institutional design variables like centralization, con-
trol, and flexibility (Goetz and Patz, 2016; Graham, forthcom-
ing). This paper contributes to the growing literature on
resourcing by theorizing the links between how IGOs are
funded, and who provides the funding, on the one hand,
and how IGO governance operates on the other. In doing
so, I outline governance implications associated with three
topics emphasized by the special issue editors: (1) the
growing complexity of the origins and types of funding
sources available to IOs; (2) the rising importance of non-
state actors in IO resourcing; and (3) the emergence of new
constellations of actors engaged in IGO financing (Goetz
and Patz, 2017).
Extant research sheds light on three prominent trends in
the financing landscape. The first involves the rise in ear-
marked voluntary resources at IGOs. Earmarked resources
are provided by donors with various conditions placed on
their use. Donors can earmark contributions for projects or
countries that are best aligned with their interests and avoid
funding IGO activities they disagree with. The practice of
earmarking grew substantially beginning in the 1990s (e.g.
UN General Assembly, and ECOSOC, 2011). For example,
between 1995 and 2010 earmarked contributions for opera-
tional activities for development in the UN system grew by
252 per cent in real terms (UN General Assembly, and ECO-
SOC, 2012. E/2012/80). By 2012, earmarked resources
accounted for 30 per cent of overall contributions to all mul-
tilateral organizations, 40 per cent to the World Bank,
2
and
fully 70 per cent of the contributions to UN agencies (OECD,
2014).
Global Policy (2017) 8:Suppl.5 doi: 10.1111/1758-5899.12450 ©2017 University of Durham and John Wiley & Sons, Ltd.
Global Policy Volume 8 . Supplement 5 . August 2017 15
Special Issue Article
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