Principal-agent problems in international organizations

The paper provides a framework for analysing control problems in international organisations and reviews the disparate evidence from a public-choice perspective. Most examples concern the European Union, the International Monetary Fund, the World Bank and the International Labour Organisation. International organisations suffer from principal-agent problems more than other public or private organisations do because the chain of delegation is more extended. As survey evidence demonstrates, the actors in international organisations do not share the preferences of the citizens because they have vested interests, and the citizens believe that they have least influence at the international level. The paper argues that national and international parliaments, the national governments and international supervisory boards or courts cannot solve the principal-agent problem due to severe information cost and weak or distorted incentives. JEL codes H79 · H11