What is the role of international organizations and do they really matter?

1. What is the role of international organizations and do they really matter? Abbot, Kenneth and Duncan Snidal. 1998. Why States Act through Formal Organizations. Journal of Conflict Resolution 42:3-32. AZ State University Oxford University

2. Do IOs matter?

3. Plan • Some descriptive facts about IOs • A&S Take-away point • Plus: PD & coordination • Other perspectives • Realism, Constructivism, (Principal-Agent/Bureaucratic) • My perspective: Self-Interest • Motives (e.g., laundering dirty politics)

4. Dramatic action • United Nations Security Council (UNSC): • sanctions & military action – Iran, Iraq (1991 v. 2003?), Libya • International Atomic Energy Agency (IAEA) • inspectors in North Korea • United Nations (UN) • peacekeepers in the Middle East • North Atlantic Treaty Organization (NATO) • in Bosnia • The Uruguay Round the World Trade Organization (WTO) & the dispute settlement mechanism

5. Ongoing action • Global health policy (the WHO) • Development (the World Bank) • Monetary policy (the International Monetary Fund) • EXTERNALITIES? (Implicit action?) • Participation reduces the chances of war among members • Participation increases the chances of democracy

6. Various sizes • From small: • Asia-Pacific Economic Cooperation forum (APEC) - $2 million budget (pays for their annual meeting?) • To big: • European Union (EU) • verging on a sovereign state (GDP of 15-19 trillion $) • World Bank • >10,000 employees from 160 countries (2/3 in Washington) • IMF • Aug. 2008: $341 billion  moving to nearly $1 trillion post-GFC

7. Specialized agencies(look up on your own): • ILO • http://www.ilo.org/global/What_we_do/lang--en/index.htm • ICAO • http://www.icao.int/icao/en/howworks.htm • FAO • http://www.fao.org/about/about-fao/en/ • Others: • UNEP • http://www.unep.org/Documents.Multilingual/Default.asp?DocumentID=43 • EBRD • http://www.ebrd.com/about/index.htm

8. AZ State University Oxford University The main take-away point? Abbot, Kenneth and Duncan Snidal. 1998. Why States Act through Formal Organizations. Journal of Conflict Resolution 42:3-32. http://scholar.google.com/scholar?q=Why+States+Act+through+Formal+Organizations&um=1&ie=UTF-8&sa=N&hl=en&tab=ws

9. IOs allow for: • CENTRALIZATION • An organizational structure & administrative apparatus managing collective activities • May allow for immediate action (UN Security Council) • Or for specialization (OECD has >200 working groups) • Governance may have flexible design (IMF voting structure) or be rigid (UN Security Council) • INDEPENDENCE • The ability/authority to act with a degree of autonomy within defined spheres

10. Rational choice perspective: • Self-Interest: • LEADERS create/use IOs when benefits of cooperation outweigh (sovereignty) costs • IOs • produce collective goods in PD settings • solve coordination problems (“battle of the sexes”)

11. PD settings? • Prisoner’s dilemma • http://www.youtube.com/watch?v=ED9gaAb2BEw&feature=related • http://www.youtube.com/watch?v=p3Uos2fzIJ0

12. Prisoner’s Dilemma: • A non-cooperative, non-zero-sum game. • Mixed game of cooperation & conflict • Individual rationality brings about collective irrationality.

14. The same situation can occur whenever "collective action" is required. • The collective action problem is also called the "n-person prisoner’s dilemma." • Also called the "free rider problem." • "Tragedy of the commons." • All have similar logics and a similar result: • Individually rational action leads to collectively suboptimal results.

15. Is cooperation ever possible in Prisoner’s Dilemma? • Yes  • In repeated settings • Axelrod, Robert M. 1984. The Evolution of Cooperation. New York: Basic Books.

16. In the repeated setting, there are multiple equilibria: (1) “Defect” – “Defect” (2) Tit-for-Tat  “Cooperate” – “Cooperate”

17. “Battle of the sexes” coordination game:(This one is NOT a “prisoner’s dilemma”)

18. IOs facilitate cooperation by coordinating states on superior equilibria/outcomes. • And they also lower the transaction costs of doing so.

19. Alternatives to the rational-institutionalist perspective

20. Realist theory • Anarchy rules international relations • States do not cede authority • IOs thus lack strong enforcement capacities • They are mere reflections of national interests/power • They do not constrain powerful states • Does realism = rational choice? • Realism focuses on state interests - ignores microfoundations (leader incentives, domestic politics)

21. Constructivist theory • Anarchy is what you make of it! • Where do ideas and preferences come from? • Focus on norms, beliefs, knowledge, and (shared) understandings International ideas IOs IOs International ideas • Vital for the understanding of major concepts such as legitimacy and norms

22. Abbot & Snidal: States use IOs to… • Reduce transaction costs • Create information, ideas, norms, and expectations • Carry out and encourage specific activities • Legitimate or delegitimate particular ideas and practices • Enhance their capacities and power

23. Principal-Agent framework • IOs are thus "agents" • Their (biggest) members are the "principals" • Agency slack?  • "bureaucratic" perspective

24. The principal-agent problem • The agent works for the principal • The agent has private information • The principal only observes an outcome • Must decide to reelect/pay/rehire/keep the agent • If standards are too low, the agent “shirks” • If standards are too high, the agent gives up • We need a Goldilocks solution – set standards “just right.” • We may have to accept some an “information rent” • Either pay extra or accept agency slack (corruption?)

26. If reelection criteria are too high, the government will not supply effort when exogenous conditions are bad. • If reelection criteria are too low, the government will not supply effort when conditions are good. • What should you do? • Intuition: It depends on the probability of good/bad conditions & on the difference in outcomes when conditions are good/bad…

27. Solution? • TRANSPARENCY?

28. Public choice/Bureaucratic theory • IOs are like any bureaucracy • Allow governments to reward people with cushy jobs • The bureaucracy is essentially unaccountable • Seek to maximize their budgets • Look for things to do

29. Back to rational-institutionalist view…

30. What do IOs do for their members? • Pooling resources • (IMF/World Bank, World Health Organization) - share costs, economies of scale • Direct joint action • military (NATO), financial (IMF), dispute resolution (WTO) • But why would states want an IO to do these things?... • Enforcement? • Neutrality? • Community representative? • Laundering?

31. Enforcement? • The problem of endogeneity • 100% Compliance may mean the IO is doing *nothing* • Be careful what conclusions we draw from observations • Compliance is meaningful only if the state takes action it would not take in the absence of the IO • IMF/World Bank CONDITIONALITY

32. Neutrality? • Example • Blue helmets: • Providing information • http://www9.georgetown.edu/faculty/jrv24/IMFforecasts.html • Collecting information • http://www9.georgetown.edu/faculty/jrv24/transparency.html

33. Community representative? •  Legitimacy • Articulate global (regional) norms?

34. LAUNDERING? • Allow states to take (collective) action without taking direct responsibility (or take responsibility with IO support) • Examples: • The IMF does the dirty work • UN Security Council resolutions - a form of laundering? • When an IO legitimates retaliation, states are not vigilantes but upholders of community norms, values, and institutions • Korean War - The United States cast essentially unilateral action as more legitimate *collective* action by getting UN Security Council approval

35. Why do we blame International Organizations and use them to lauder our dirty politics? The world deserves harmonious cooperation through global governance • But that’s not what we need right now • Small steps towards cooperation • IO’s can help • And we’ll blame them when things go wrong • Because they can take it • Because they’re not our hero • They’re our silent guardians. Our watchful protectors. • Our dark knights

36. Answers to today’s question: • IO’s coordinate on superior equilibria & reduce transaction costs • Enable members to: • Enforce norms & international law • Have a neutral community representative • Legitimacy - shared beliefs that coordinate actors regarding what actions should be accepted, tolerated, resisted, or stopped • LAUNDER dirty politics • To these ends IOs are created: CENTRALIZED & INDEPENDENT

37. Analytical tools • Coordination games & Prisoner’s dilemma • Realist theory • Constructivist theory • My perspective: Interests & Institutions • Interests of LEADERS (Chief executives) • Constraints/opportunities posed by DOMESTIC & INTERNATIONAL Institutions

38. Thank youWE ARE GLOBAL GEORGETOWN!