Vertical Funds: New Forms of Multilateralism

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 primary effects of these changes on IGO governance: (1) how the increased reliance on earmarked contributions undermines traditional 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.

“… On public‐private partnerships (PPPs), see Browne (). On philanthropic organizations, see Seitz and Martens (). …”

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confidence: 99%

“…I return to this point in the conclusion. For an emphasis on PPPs in the special issue, see Browne ().…”

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confidence: 99%

Follow the Money: How Trends in Financing Are Changing Governance at International Organizations

Graham

2017

“…This special issue comes at a time when the increasing role of voluntary and earmarked contributions in the financing of IOs (Bayram and Graham, ; Graham, , , ; Graham and Thompson, ) as well as the rise of trust funds and the increased channelling of bilateral aid through multilateral organizations (Reinsberg, ; Reinsberg et al., ) have generated renewed comparative interest in IO finances, especially in the UN system, but also beyond (see, e.g., Engel, on the African Union). While alternative modes of IO funding are as old as the League of Nations (Ranshofen‐Wertheimer, ) or even as old as the international unions preceding the League (Reinsch, ), the trend towards new modes of financing observed in the UN system, in particular, has raised questions about whether resource politics in IOs are changing the dynamics of multilateralism (Browne, ; Graham, , ). New questions also arise with regard to how this trend affects the provision of development finances by and through IOs (Nielson et al., ).…”

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confidence: 99%

Resourcing International Organizations: Resource Diversification, Organizational Differentiation, and Administrative Governance

Goetz

Patz

2017

This article introduces, summarizes and contextualizes the key questions and findings of a special issue of Global Policy on the resourcing of international organizations (IOs). The article sets out trends in the financial resources available to IOs; discusses their organizational consequences; and highlights analytical implications for the study of IOs. We discuss resource diversification associated with growing complexity of the origins and types of funding available to IOs; the importance of non-state actors in IO funding; and contestation over the classification of resources. Resource diversification encourages organizational differentiation, manifested in major shifts in resource-related actor constellations and their impact on the autonomy of IOs; adjustments to budgeting procedures; and functional differentiation within IOs and the emergence of new types of IOs that are partly driven by resourcing. These observations invite an analytical perspective in the study of IOs that pays systematic attention to the administrative governance dimension of IOs; the entrepreneurial character of many IOs; and organizational fields as a focus of analysis. Read together, the 11 contributions to the special issue underline that paying attention to their resourcing can advance our understanding of IOs.At a time when newly elected US President Donald Trump announces severe budget cuts to the United Nations system, the relevance of resourcing for the functioning of international organizations (IOs) can be in no doubt. It has long been recognized that access to financial and other resources is critical to the evolution of IOs and to the realization of their global policy ambitions (Wright, 1957). Complaints from the leadership of IOs about inadequate resources also have a long tradition, and the mismatch between IO mandates, as set by member states, and available resources to carry out those mandates effectively is a recurrent concern (see Annan, 1993, for the UN). Some IOs, such as the African Union (Engel, 2015) or UNRWA (Bocco, 2010) appear to suffer from chronic underfunding. Others have a long history of repeated funding 'crises', typically brought about by either the unexpected partial withholding of member state contributions (for the United Nations see Claude, 1964;Taylor, 1991; for UNESCO see H€ ufner, 2017;. In other cases, resource mismatch has been the result of unforeseen demands on IO budgets, as in the case of refugee crises or natural or man-made disasters (McDermott, 2000). In view of these challenges, the need to reform UN financing and resource politics has been recognized and many proposals have been put forward over the years (see Muttukumaru, 2016 for a present-day reform proposal).A central finding of this special issue is that there are several critical issues that matter when studying the resourcing of IOs, beyond the overall levels of funding available and the details of resource allocation. Among these issues are:(1) the mix of sources of funding, namely, who provides the finances of IOs; (2...

“…In recent years, two phenomena have altered the development aid architecture. First, ‘global funds’ – such as the Global Fund to Fight Aids, Tuberculosis, and Malaria – have grown into serious competitors of the established multilateral organizations – such as the World Bank, the World Health Organization, and other United Nations entities (Browne, ; Smyth and Triponel, ; Sridhar and Woods, ). Governed by independent boards in which donor countries control a majority of the votes, global funds act outside the established multilaterals but contract the latter as their implementing agencies.…”

Section: An Influence Perspective On the Rise Of Trust Fundsmentioning

confidence: 99%

“…Using the perspective of ‘influence’, I aim to link these branches of literature and discuss the existing research on trust funds in each of them. ‘Trust funds’, as used throughout this paper, are financial vehicles established under the institutional law of the host organization (Droesse, , p. 113), which makes them different from ‘pass‐through multilaterals’, independent multilateral entities established outside the legal framework but using the implementing capacities of traditional multilateral organizations (Browne, ; Heimans, ; Isenman and Shakow, ).…”

Section: Theoretical Perspectives: State Influence At International Omentioning

confidence: 99%

Trust Funds as a Lever of Influence at International Development Organizations

Reinsberg

2017

Trust funds -broadly defined as financial vehicles to channel development funding earmarked for specific purposes through international development organizations -have grown substantially over the past two decades. Reflecting the variety of trust fund purposes and related governance arrangements, an emergent literature emphasizes a diversity of reasons underlying this growth. This paper proposes a simple -yet encompassing -explanation applicable to all kinds of funds: donors use trust funds to wield 'influence' -leveraging financial resources to alter the policies of multilateral organizations. Based on interviews at the World Bank, the study shows that influence is a dominant motive behind trust funds, though the capacity and willingness to wield influence varies across donors. Influence is a salient motive especially for medium-sized donors and emerging donors but surprisingly less so for large donors. In addition, attempts of influence are most effective when donors promote new thematic issues that did not previously feature Bank assistance and outside established programs. Concerns among stakeholders about undue donor influence are highest with respect to the global knowledge work of the World Bank but are virtually absent when involving donors in the operational activities at the country level. Policy Implications• Policy-makers need to be aware that trust funds are prone to be used as levers of influence.• Donor involvement in multilateral agency operations can enhance the effectiveness of operations but at the same time undermine the legitimacy of global governance; stakeholders must find a balance between these two considerations.• International development organizations should have clear guidelines regarding which kinds of donor involvement they can accept and which practices of involvement are incommensurate with their own procedural rules; they must communicate these guidelines internally and vis-a-vis external stakeholders.• Sectors that are prone to undue influence -for example global knowledge work -should be financed from core contributions.