Principals and Interests: Agency Theory and Multilateral Development Bank Lending.

Current international relations theory cannot accommodate both the autonomy that international organizations (IOs) often exhibit and the influence of member states on IO behavior. Drawing from microeconomics and theories of American politics, we offer an agency theory of international organizations, where member states are conceived as principals and IOs as their agents. IOs sometimes shirk in performing mandated tasks or redefine their tasks altogether. However, IO agents are often constrained by institutional mechanisms that allow attentive states to realize their interests - voting procedures are a common mechanism used to structure the incentives of IO agents or even to overturn their preferred policies ex-post. We argue that when the interests of voting majorities in executive bodies shift, IO behavior will follow. However, principals must overcome collective-action problems before giving marching orders to IO agents. Thus, when voting shares become fragmented, IO agency slippage grows. We evaluate these hypotheses statistically through employing a database of more than 6400 loans issued by the World Bank, the Inter-American Development Bank and the Asian Development Bank from 1980 to 1999. [ABSTRACT FROM AUTHOR]