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
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The course take-away:
• Institutions matter…
• The ways countries interact in the international arena
partly depends on their institutional context
• Both international and domestic institutions matter
• What is an institution?
– A set of rules (structures/constraints/mechanisms)
that govern the behavior of a given set of actors in a
given context
– An equilibrium?
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What do international institutions do?
My list:
• Informational role
• Lock-in
• Obfuscate
• Collective action (PD)
• Coordinate
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Do IOs matter?
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Plan for today:
1. Some descriptive facts about IOs
2. A&S Take-away point
–
Plus: PD & coordination
3. Other perspectives
–
Realism, Constructivism, (Principal-Agent/Bureaucratic)
4. My preferred perspective: Self-Interest
– Motives (e.g., laundering dirty politics)
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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
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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
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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 17-19 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
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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?Document
ID=43
– EBRD
• http://www.ebrd.com/about/index.htm
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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
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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
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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”)
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PD settings?
• Prisoner’s dilemma
• http://www.youtube.com/watch?v=ED9gaAb2BEw&feature=related
• http://www.youtube.com/watch?v=p3Uos2fzIJ0
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Prisoner’s Dilemma:
• A non-cooperative, non-zero-sum game.
• Mixed game of cooperation & conflict
• Individual rationality brings about
collective irrationality.
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Player 2
Player 1
Cooperate
w/friend
Defect (rat)
Cooperate
w/friend
Defect (rat)
-3, -3
-25, -1
-1, -25
-10, -10
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• 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.
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Is cooperation ever possible in
Prisoner’s Dilemma?
• Yes 
• In repeated settings
• Axelrod, Robert M. 1984. The Evolution of Cooperation. New
York: Basic Books.
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In the repeated setting, there are multiple equilibria:
Player 2
Player 1
Cooperate
w/friend
Defect (rat)
Cooperate
w/friend
Defect (rat)
-3, -3
-25, -1
-1, -25
-10, -10
(1) Tit-for-Tat  “Cooperate” – “Cooperate”
(2) “Defect” – “Defect”
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“Battle of the sexes” coordination game:
(This one is NOT a “prisoner’s dilemma”)
Ballet socialite
Football
socialite
Football
Ballet
Football
4,3
2,2
Ballet
1,1
3,4
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• IOs facilitate cooperation by coordinating
states on superior equilibria/outcomes.
• And they also lower the transaction costs
of doing so.
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Alternatives to the rationalinstitutionalist perspective
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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 – may ignore
microfoundations (leader incentives, domestic politics)
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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
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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
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Principal-Agent framework
• IOs are thus "agents"
• Their (biggest) members are the
"principals"
• Agency slack? 
– "bureaucratic" perspective
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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?)
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High Effort/skill
Nature
chooses
the state
of the
world
(“luck”)
od
Go
ect
l
e
Re
Government
Low Effort/skill
Voter
Bad
High Effort/skill
Government
No
t
Low Effort/skill
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• 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…
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Solution?
• TRANSPARENCY?
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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
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Back to rational-institutionalist view…
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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?
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Enforcement?
• When states behave as IOs dictate, does it mean IOs are
forcing states to behave a certain way?
• 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
• What is the counterfactual?
• Example: IMF/World Bank CONDITIONALITY
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Neutrality?
• Example
– Blue helmets:
• Providing information
– http://www9.georgetown.edu/faculty/jrv24/IMFforecasts.html
• Collecting information
– http://www9.georgetown.edu/faculty/jrv24/transparency.html
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Community representative?
•  Legitimacy
• Articulate global (regional) norms?
• Who “elects” the IO representatives?
– We’ll talk a lot about this with respect to the
IMF & World Bank
– Also the emerging AIIB
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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
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Why do we blame International Organizations and
use them to launder 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
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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
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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
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Thank you
WE ARE GLOBAL GEORGETOWN!
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