Reforming the World Bank: Towards a Theoretical Synthesis of IO Change.

This paper seeks to show how the rational-choice tenets of principal-agent theory may be integrated with constructivist applications of sociological organizational theory to explain the process of IO change, using the case study of the World Bank. Employing principal-agency theory alone provides a fairly convincing explanation for the exogenous causes of change in IOs, particularly in establishing the systemic circumstances under which IOs may be able to escape (through agency slippage or breakdown in consensus among principals) pressures for reform stemming from shifts in member state interests. Yet this framework explains only the conditions for, rather than the content of, IO agency ? a critical variable in understanding how the IO responds to external pressure. Borrowing from recent constructivist applications of organizational theory, an examination of bureaucratic culture provides a plausible account of the agent’s (IO’s) preferences, normally taken as a given within principal-agency theory. Inserting the variable of bureaucratic culture into the principal-agent model can explain why IOs often tend to change (or resist change) in ways unpredicted or undesired by the member state creators. This hybrid approach appears particularly fruitful in light of the current frustration that member states have expressed in attempting to reform the World Bank. [ABSTRACT FROM AUTHOR]