Do domestic politics shape U.S. influence in the World Bank?
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Do domestic politics shape U.S. influence in the World Bank? Erasmus Kersting 1 & Christopher Kilby 1 # Springer Science+Business Media, LLC, part of Springer Nature 2018
Abstract Do U.S. presidential administrations exert more informal influence over international financial institutions when they face an uncooperative Congress and thus have less control over bilateral aid? Reexamining four empirical studies of the World Bank, we demonstrate that U.S. informal influence is driven by years with divided U.S. government. This provides a richer picture of when and why the U.S. exerts influence in multilateral settings and an alternate explanation to persistent questions about the role of international organizations in the international political economy. Keywords World Bank . Divided government . Geopolitics of aid JEL Clasification F35 . F53 . O19
1 Introduction Over the last ten years, a sizeable empirical literature on foreign aid has established that the U.S. uses both bilateral aid and influence in international financial institutions (IFIs) to pursue its foreign policy objectives. The parallels between bilateral and multilateral aid An early draft of this paper circulated under the title BBilateral versus Multilateral: Picking Policy Instruments.^ We received valuable feedback from participants in the Swiss Network for International Studies Workshop on the Politics of Informal Governance (organized by Oliver Westerwinter), PEIO IX, AEL, TWIIGG, the Swarthmore Economics Department Summer Research Seminar Series, and the Economics and Politics Seminar Series at the Heidelberg Alfred Weber Institute, University of Heidelberg. Electronic supplementary material The online version of this article (https://doi.org/10.1007/s11558-0189321-8) contains supplementary material, which is available to authorized users.
* Erasmus Kersting [email protected] Christopher Kilby [email protected]
1
Villanova University, 800 E Lancaster Ave, Villanova, PA 19085, USA
Kersting E., Kilby C.
in serving U.S. interests are particularly clear regarding nonpermanent United Nations Security Council (UNSC) membership (Kuziemko and Werker 2006; Dreher et al. 2009a, b) and political aid cycles (Faye and Niehaus 2012; Kersting and Kilby 2016). But what factors influence the U.S. choice between bilateral and multilateral aid? There is ample evidence that government ideology impacts policy-making in the U.S. (Potrafke 2018) and that extends to foreign aid policy in many settings (Brech and Potrafke 2014). Following Milner and Tingley (2015), we model the role of U.S. domestic politics in the choice between bilateral and multilateral aid and investigate whether this choice depends on the U.S. administration’s relations with Congress. When relations are particularly contentious, bilateral aid is less attractive as a foreign policy tool and so the U.S. administration will increase pressure on international organizations to deliver resources in support of U.S. administration goals. We test the hypothesis that previous evidence of U.
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