Who delegates? Alternative models of principals in development aid

Abstract

Principal-agent theory has proven a powerful tool for analyzing delegation relationships in a wide variety of settings, yet it remains under-developed in the study of international relations. Conventional wisdom holds that state principals face special, and often insurmountable, difficulties in realizing their interests when they delegate to international organizations (IOs). In this chapter we examine delegation to multilateral development banks (MDBs) and ask whether they are faithful agents. We demonstrate that analytic shortcuts commonly employed in the study of IOs can lead researchers to misleading conclusions about the faithfulness of IO agents.