3 Partnering with Bureaucracies

In business, partnerships have been compared to marriages, not only because 50 percent of them fail but also because one partner thinks it can change the other: values are misaligned, organizational cultures are mismatched, partners do not trust enough and protect fiefdoms of power, or partnerships are arranged at the top by leaders who do not understand that their organizations would not mesh well in terms of day-to-day operations (Mutschler 2006; Neville 2013). Success or failure may be easier to adjudicate in business than in global governance because revenue, as an absolute end, is relatively easy to quantify. In global governance, judging the success or failure of a partnership in solving the problem it was set up to address—that is, conserving nature—may seem straightforward. However, if nature is preserved at the expense of human populations’ survival, or by authoritarian decrees at the expense of democracy, or at a cost that is unsustainable or not replicable, then a simple metric of how many hectares or species are protected falls short of capturing what many would consider successful goal achievement. There are multiple goals in global governance, and we cannot justify creating environmental benefits by means that undermine other equally good human development ends.

The question of how to evaluate performance is a key subject of inquiry in this book. To determine the success or failure of a partnership, we need to first define what counts as a goal, and then what observations can be used to assess it. For example, a partnership might facilitate very democratic processes of decision-making (a success) that do not ultimately protect the endangered species the partnership was designed to conserve (a failure). This is a central problem of evaluation, and one of the main claims I advance is that for a partnership to have a lasting impact, its performance must be understood in the context of both processes and outcomes. To continue with the example above, poor performance in biodiversity interventions often follows this pattern:

1. A promise of participatory decision-making is given (process success).
2. Decisions are imposed as to what to save and how (outcome failure).
3. Endangered species are temporarily protected by a small project coordinating unit (process success).
4. Funding ends, the project unit closes, and endangered species populations decline again (outcome failure).

The promise, process, and outcomes of partnerships have feedback effects that require nuanced analytical treatment. Partnerships are designed to do multiple things. Assessing the overall performance of partnerships requires evaluating their narrow goals (saving a species), their broader goals (through participatory decision-making), and how these narrow and broad goals interact in ways that generate positive or negative feedback effects on biodiversity conservation over the medium and long term. Traditional, rationalist interpretations of international organizations’ (IOs’) behavior can provide an initial, though only partial, account of these feedback effects between narrow and broad goals, as well as of partner relationships in relation to those goals.

Principal-agent accounts of delegation and resulting agency slack explain one potential mechanism that results in a mandate-performance gap. However, a sociological institutionalist lens draws our attention to the reasons why the bank set up partnerships as delegative rather than cogovernance arrangements, which limits democratic decision-making. It also highlights reasons for the selection of particular agents in that delegative relationship. The selection of certain agents over others truncates partnerships’ governance choices, which limits innovation. Once this enabling environment is in place, we may or may not see agent opportunism as predicted by principal-agent theory. Therefore, to explain why bank partnerships perform poorly with respect to their original raison d’être, I explain the partial fit of a principal-agent account and show its limits, then extend my analytical leverage by building on insights from organizational theory.

There has been a growing literature on IO performance by scholars who endeavor to explain the gaps among mandates, promises, and performance (Gutner 2005a; Gutner and Thompson 2010; Sethi and Schepers 2014; Weaver 2008). For example, Catherine Weaver (2008) has argued that the disconnect between words and action is a result of a hypocrisy trap. She finds that the World Bank is driven to hypocrisy when external pressures for resources or legitimacy collide with internal bureaucratic routines that favor consistency and stability. The result is that the bank says one thing externally but operates in business as usual mode internally. This is “enabled” by an environment of delegation whereby agents abuse the leeway that principals grant them to carry out their mandates. Hence, bank staff fail to comply with, or else half-heartedly execute, senior management’s vision of change because they have latitude in implementation decisions. Weaver sees bank leaders as trying to politically appease external demands while staff members cling steadfastly, or lazily, to their standard operating procedures.1

This describes part of an internal organizational picture. However, an extended delegation account cannot explain the particular choices that the bank makes in setting up and implementing partnerships the way it does, and how this affects others. In short, the hypocrisy account is aimed at explaining why the bank says one thing yet practices another. The impact of that practice on partners remains unexplored. There may be a gap between word and deed, but those deeds do not remain within the walls of the bank.

The Principal-Agent Model and the Mechanics of Slippage

Liberal institutionalists, borrowing from the field of microeconomics, have applied a principal-agent model to describe the relationship between IOs and states as a classic principal-agent dynamic (Nielson and Tierney 2003). In applying what was originally a theory of the firm to international relations, Nielson and Tierney conceptualized states as principals and IOs as agents. The principal-agent model posits that states delegate authority, with incentives for IOs to follow specific mandates. But IOs are granted a certain degree of “slack” so that they can advance their institutional needs. Principals and agents do not share identical preferences. Hence agency slack is abused by IOs, which profit from technical and asymmetrical information. IOs can, for example, promote policies that are not consistent with the state’s interests. This is referred to as agency loss, since the original goals of the principal are undermined in the principal-agent transaction. The conundrum is that the authority the principal needs to delegate to an agent will eventually be used against the principal (Nielson and Tierney 2005). Consequently, principal-agent theorists devote considerable attention to devising appropriate incentives and control systems that might limit agent opportunism.

Partnerships and the Long Chains of Delegation

The idea of applying a principal-agent model to what is supposed to be a relationship among equals may strike one as odd. However, the empirical evidence of partnership governance discussed in the previous chapter suggests that, despite the pronouncements of bank presidents and academic literature on the subject, bank partnerships are not a bargain among equals. It is true that the bank does not have formal authority over the partnership as a whole. For example, it cannot fire a partnership that does not do what it wants. However, there are indirect and direct ways in which the bank exerts informal influence over the partnership and formal authority over some of the partners. The bank has considerable leverage over partnership activities when it is the single most important donor, and influence when it chairs partnership executive boards. Moreover, since the bank channels its financing through a managing partner, it has a legal contract with an individual organization that executes partnership activities. The bank can theoretically fire that organization and hire another one within the partnership to disburse bank funds.

In international relations, the principal-agent model has been most often applied to the relationship between states and IOs. Yet there are multiple chains of delegation between donor states and the intended beneficiaries of their resources (Gutner 2005a; Gutner and Thompson 2010). This delegation chain is further extended in partnership arrangements, as figure 3.1 illustrates. The first delegation relationship is created between donor states and the bank, where the former acts as principal and the latter as its agent. Internally, senior bank management staff assume the role of principal and delegate the implementation mandate to operational staff members, who become their agents. The bank as an organization behaves as a principal in partnerships by adopting leadership roles and delegating implementation mandates to the other partners. The partnership in turn creates its own delegation chain. A managing partner is chosen to house the secretariat and oversee day-to-day operations, reporting back on progress to an executive board that is most often chaired by the bank. This managing partner is an agent to the partnership’s principals but is also a principal delegating authority further down the chain to national organizations that carry out activities on the ground.

Tamar Gutner (2005a) argued that rationalist literature on IOs has too narrowly focused on the principal-agent model to explain the delegation issues between states as principals and IOs as agents. She advocates looking more holistically at the longer chain of delegation and being attentive to the issues that arise when the IO is not only an agent to donor states but also a principal to recipient governments as agents. Gutner introduces the concept of “antinomic delegation” and applies it specifically to the case of World Bank environmental reform. This type of delegation is defined as one “consisting of conflicting or complex tasks that are difficult to institutionalize and implement. Where antinomic delegation is present, performance problems may not solely reflect agency shirking, but rather be traced to the more intricate challenge agents face trying to implement goals that are difficult to specify and/or juggle” (Gutner 2005a, 11). Mor Sobol (2016) continues to develop this opening in the principal-agent literature and describes the problem of “pathological delegation,” whereby heterogeneous preferences among many principals undermine the potential of agents to fulfill their mandate. This type of delegation occurs “when the structure of delegation itself and features of the principal-agent contract provide perverse incentives for the principals to behave in ways inimical to the delegation act and thus hinder the agent’s work” (Sobol 2016, 339). For example, quoting Thompson (2006), Sobol describes how the United Nations Security Council, acting as a collective principal, sent mixed signals and contradictory messages and priorities to its agent, the United Nations Special Commission, to find weapons of mass destruction in Iraq, which undermined the performance of the agent.

Table 3.1

Partnership Stages and Delegation Relationships

	Executive stage	Management stage	Implementation stage
Principal	World Bank senior management	World Bank operations staff	Managing partner of the partnership
Agent	World Bank operations staff	Managing partner of the partnership	Local organizations

These developments in the principal-agent model offer more nuance and leverage to explain why we see a gap between IOs’ mandates or intentions and their subsequent performance in the field. Hence, following Gutner’s suggestion, I apply the principal-agent model to a longer chain of delegation relationships. But, as explain below, ultimately it proves a limited tool to theorize partnership performance with inadequate policy recommendations.2

I investigate three sets of relationships at three decision-making levels, executive, management, and implementation, as mapped out in table 3.1. At the executive level, bank senior management staff act as principals and operations staff act as agents. At this stage, we see principals providing to external and internal audiences the overall vision of partnerships. They are framed as a mechanism to achieve democratic decision-making, policy innovation, and financial resources to secure global public goods. Wolfensohn’s (1999) Comprehensive Development Framework, with its emphasis on partnerships to achieve participation and better coordination, which would be expected to lead to innovations and improved financial flows, is an example of the vision statements that are articulated at this stage. Internally, the principals select lead staff to represent the bank in the partnership. These staff members include personnel from relevant operational units and may involve both thematic and regional experts.

A 2000 survey of the World Bank/World Wildlife Fund Alliance for Forest Conservation and Sustainable Use illustrates the distance between the bank president and management. World Bank staff respondents candidly stated that a key lesson learned from that partnership was that it was:

Too top-down. Get an assistant or else never get involved in an initiative that came from top-down and lacks strong administrative backstopping. Bank management is not always ready for the implementation policies and initiatives decided upon by the president. (Lele et al. 2000, 119)

The institution does not mainstream the partnership’s goals into regular bank operations. Institutional structures and organizational processes are not reaccommodated. This has been noted in several partnership evaluations and prominently with the Global Invasive Species Program, which is discussed in detail in chapter 5. The bank did not have safeguards or comprehensive reviews of its portfolio and the problem of invasive species was systematically unremarked in bank operations (World Bank Independent Evaluation Group 2009).

Bank partnerships are governed by a board of directors that is generally exclusively composed of donors. Stakeholders that do not directly provide monetary resources to partnership activities are often excluded from decision-making at the executive level. Those excluded include national stakeholders, community organizations, and individuals who are likely to be most immediately affected by any changes to their access to the resources that support their daily livelihoods.3 Partnerships’ executive boards also tend to have fixed chair positions (i.e., leadership of the board does not rotate among partners), and the chair is most often the World Bank. By these measures, the bank seems to wield considerable influence.

At the management stage, the trend is to have large international NGOs permanently hosting the secretariat and act as “managing partners” of the partnership. From this empirical picture, it makes sense to view the IO as the principal and the managing partner as the agent. A staff member of the bank becomes the partnership’s task team leader and point of communication between the bank and a lead partner, which hosts the partnership secretariat and becomes responsible for day-to-day operations. This external managing partner must be up to the not insignificant administrative tasks of executing millions of dollars’ worth of expenditures following bank procurement practices across several global regions; coordinating national and local staff, who will interact with governments, civil society, and private sector actors on behalf of the partnership; and reporting on myriad projects’ execution according to bank formats and procedures. Partnership staff have multiple reporting chains of command. In the case of the Critical Ecosystem Partnership Fund (CEPF), the partnership staff report to Conservation International (the managing partner), the bank, and the partnership’s board of directors. In the case of the Global Invasive Species Program (GISP), now terminated, partnership staff similarly reported to the bank, the executive board, and the South African National Biodiversity Institute (SANBI). The bank’s evaluation office has noted that the issue of “multiple masters” is a common problem among global partnerships (World Bank 2011).

Since at the implementation stage the agent re-grants financial resources to local organizations to carry out the partnership’s conservation mandate, we can reconceive of the managing partner as the principal and the local institutions that carry out partnership conservation activities on the ground act as the final agents.

According to the principal-agent model, in each of these delegation links and partnership stages, there is agency loss. Hence the multiple chains of principals and agents means that there is ample room for unintended outcomes from the original principal’s directives. The remedy to agency loss is devising tighter monitoring controls on the agent that is carrying out each of the respective principal’s mandates. Hence the drive to democratize through partnerships instead becomes a drive to supervise.4

If rationalist accounts of delegation dynamics are taken at face value, it should come as no surprise that partnerships end up looking different from what the bank had originally intended. The principal-agent model tells us to expect a gap between mandate and performance (Gutner and Thompson 2010). However, a principal-agent frame of analysis does not tell us much about two analytically prior questions: Why does the bank create hierarchical delegation dynamics rather than horizontal partnering? Why does delegation occur among a select group of partners? The principal-agent model is also rather vacuous on the analytically subsequent question of outcomes. It does not say anything about the direction of agents’ slippage. What determines policy content, and how will policies be received on the ground?

The principal-agent model gives a narrow view on one mechanism of agent slippage. Traditional accounts lack peripheral vision.5 The principal-agent relationship is not only characterized by adversity and blame between principal and agent (which are antithetical to the need for trust building in partnerships), but it has also generally focused its lens on the influence that the agent gains in the structure of delegation. The agent becomes powerful at the expense of the principal. The principal is expected to have control. This perspective presents two significant shortcomings. First, the principal is described as having a problem, but not one entirely of its own making. It may be the result of opportunistic agents, according to traditional principal-agent models, or because the principal needs to delegate tasks that are too difficult for the agents to fulfill, or because the principal must share authority with other principals, whose heterogeneous preferences undermine the final results of the delegation contract (Gutner 2005a; Sobol 2016). The main agency ascribed to principals is in the remedying stage, through incentives, controls, or sanctions (Pollack 1997). Second, if the principal “should” have control, that means the bank ought to be dictating the precise content and operation of policy to its partners. This runs at cross purposes to the concept of partnership, which implies that different sets of interests are being served and managed to produce common goals.6

I argue that by subsuming a principal-agent framework of analysis within an organizational context, we can explain the problem of unintended outcomes not only as structural, based on the nature of a contract, but also as social, based on the organizational characteristics of the parts. This account also balances the tendency of principal-agent model to rely excessively on the explanatory power of agent opportunism and turns the lens on the character of the principal. I posit that agency loss results from a principal not behaving like the rational actor described by the principal-agent model.7 Transaction cost perspectives have been useful in describing one potential outcome in cases of delegation. Sociological institutionalism is better equipped to explain how delegation arrangements can produce varied outcomes.

In summary, this theoretical account goes well beyond the traditional application of transaction cost analysis to IOs in at least two ways. First, the main focus of principal-agent scholars studying IOs is to determine why and how IOs gain autonomy and influence beyond their member states’ mandates. This preoccupation lends itself to de facto assigning IOs the singular role of agents. This is the product of a normative bias in the international relations discipline that gives primary importance to states as the main actors in international relations. Hence, what matters most is to explain how traditionally epiphenomenal actors, such as IOs, can gain some measure of influence beyond states. However, the commitment to finding influence beyond the state does not go further and look at what the IO does with that agency and what it does when it transforms itself into a principal. I suspect that in many cases this is because principal-agent theorists are still convinced that IOs matter, yet not enough to prod that far down the chain of delegation dynamics. However, aside from a normative commitment to the centrality of the state, there is no good theoretical reason to neglect analyzing the full chain of delegation between states and IOs, and between those parties and beneficiaries on the ground.

Second, the principal-agent model is not equipped to explain why principals decline to enforce their mandate of achieving good governance values through partnerships. Traditional assumptions of rationality would foresee a principal actively engaged in ensuring compliance. What is puzzling here is the bank’s inaction within partnerships to promote its stated governance preferences. My analysis examines the endogenous factors that shape the principal’s preferences. Revisiting these from the inside out explains the bank’s actions and how these result in partnerships that diverge from their original intention.

Beyond the theoretical limitations, there are also policy limitations to the principal-agent model’s prescriptions. The principal-agent remedy to situations of agent slippage poses a policy challenge for the bank in partnership arrangements. Tighter controls on how agents carry out the mandates that principals delegate would mean accentuating the hierarchical relationship between principal and agent. The agent would lose autonomy and decision-making latitude. Under these conditions, partnerships would look even less democratic than they do currently. There would also be less room for policy innovation, since tighter controls on the agents would run counter to creating an environment that fosters cooperation and experimentation (Hosmer 1995).

In light of the theoretical and policy limitations of rationalist accounts, it is necessary to cast a wider net in search of an explanation of IO preferences in partnerships to clarify why a relationship among equals becomes a delegation ladder. Why does the bank choose to give authority over the partnership to a select few organizations? What agency does the bank have in the performance and outcomes of the partnership?

Organizational Theory and the Problem of the Bureaucratic Principal

In the last twenty years, scholars of international organizations have increasingly applied a second approach to conceptualizing the behavior of these organizations. Constructivist scholars using sociological and organizational theories have been examining what IOs do with their influence, because autonomy is not assumed to be solely a product of their relationship with their member states. Constructivists have looked for endogenous and ideational factors that drive IOs to do what they do and gain influence (Barnett and Finnemore 2004). Their analysis of influence reaches beyond discreet rationalist accounts. The wider focal lens can describe how the loss of agency from states to IOs can have ripple effects that result in further losses to states. For example, IOs may transfer parts of their autonomy to private sector partners, who can gain significant influence to shape the substance of global governance.

Based on Weberian conceptions of the functioning of rational bureaucracies, sociological institutionalism has focused on the endogenous forces that shape IO actions. For example, Barnett and Finnemore’s (2004) account of IOs’ behavior sheds light on an internal bureaucratic logic behind preferences and actions. I examine the influence of a bureaucratic logic of action on partnership outcomes. Seeing the bank as a risk-averse institution helps to explain why it relies on delegation rather than cogovernance and to whom it prefers to delegate. Seeing the bank as a large bureaucracy with operational concerns over ease of disbursement, execution, and monitoring deepens our understanding of why it chooses the partners it does, and scrutinizes operational effectiveness above all else.

The Bank as a Risk-Averse Organization

One particularly important institutional feature of the bank is its proclivity for risk-averse behavior (Park 2005). The bank has become increasingly risk-averse in a climate of mounting NGO whistleblower campaigns, most famously over the Polonoroeste Project in Brazil in 1985, followed by the Narmada Dam project in India during the early 1990s. The bank began to respond by adding layers of safeguards that could curtail the risk of further reputational losses. The creation of the Inspection Panel in 1993 is one of the most obvious examples of controls the bank deployed to respond to the criticisms from social and environmental civil society organizations. Other examples are the institutionalization of safeguards in the late 1980s and 1990s after qualifying 53 percent of all projects as “high risk” or “extremely high risk” to people and their environment (Park and Vetterlein 2010; World Bank Independent Evaluation Group 2010a); the creation of the Quality Assurance Group in 1996; the establishment of the Operations Evaluation Department in 1972, which reports directly to the bank’s board of executive directors; and the myriad legal, gender, indigenous, and environmental studies that have become requirements in the loan preparation process. Critics, particularly among developing country governments, have argued that the bank has become such a risk-averse organization that loan preparation has emerged as an overly onerous process. As a result, borrowing governments with sufficiently high sovereign debt ratings have migrated to private capital markets and stopped borrowing from the bank.8

I argue that this institutional trait has had a similar effect on the way the bank sets up partnerships. What were meant to be horizontal relationships became hierarchical delegation arrangements. The bank seeks to ensure that partnerships follow its institutional procedures and reporting policies so as to mitigate concerns over their effect on the bank’s reputation. These concerns have been discussed at the highest levels of the bank. They have resulted in requests from executive directors to bank senior management to institute organizational procedures for controlling the types of initiatives and actors with whom the organization establishes formal working relationships (World Bank 2004a).

The general risk-averse character of the bank, combined with the loss of exclusive agency that cogovernance relationships entail, makes the bank more likely to prefer creating a delegation arrangement that gives trusted partners a visible management role. This lowers and spreads any potential risks of conservation interventions across more organizational actors.

In describing the organizational logic of partnerships, Grahame Thompson (2003) points out that they work on trust and loyalty. Hence, once a decision to delegate has been made, the bank chooses actors with whom it has had previous repeated interactions and shares this trust. This requirement limits democracy and innovation, since it allows for the inclusion only of a smaller pool of agents and, since individual actors carry ideas, a limited number of policy options will be tabled. The bank most often resorts to delegating the management of partnerships to large international NGOs rather than to local community organizations, national NGOs, or firms. One exception is the Biodiversity and Agricultural Commodities Partnership, which the International Finance Corporation decided to delegate to Chemonics, a large consulting firm on international development, following a public tender process. However, of the 25,000 international NGOs that the Union of International Associations (2012) estimates are in operation, the only NGOs that have executive governance functions and management roles are in the top five international conservation organizations: Conservation International, the World Wildlife Fund (WWF), The Nature Conservancy, the Wildlife Conservation Society, or the World Resources Institute. As bank documents concede, “There may be disparities in representation among NGOs in regards to which NGOs have access at the policy level and which NGOs are primarily involved as service providers in Bank projects” (World Bank 2005, para. 13).

As I examine in the following chapters, in many cases World Bank staff share extensive professional relationships with these conservation NGOs. Staff members have worked in each other’s organizations prior to, or after working for, the World Bank and have co-authored academic articles together. It is not surprising that, having decided to delegate, the bank chooses to give a leading role to these NGOs as hosts of partnership secretariats and managers of conservation interventions. They are trusted partners for a risk-averse organization.9 Because of the revolving-door phenomenon between the bank and these select few organizations, these NGOs become “outside-insiders” and they have the power to shape ideas and policy, beyond the interests of member states and secretariats (Weiss, Carayannis, and Joify 2009). This is what Thomas Weiss and colleagues (2009), writing on the United Nations, called the Third UN.10

Bank partnerships do closely follow the same conservation recipes of their managing NGO partners. For example, the ecoregion approach of the WWF was followed by the World Bank/World Wildlife Fund Alliance for Forest Conservation and Sustainable Use. The hotspot approach of Conservation International is followed by the CEPF partnership. Bank partnerships focus overwhelmingly on hierarchical interventions rather than on community-based, rights-based, or market approaches to promote conservation. These are the main critiques that academics and civil society organizations have also leveled at WWF, Conservation International, and The Nature Conservancy (Chapin 2004; Smith, Verissimo, and MacMillan 2010).

In global governance there is a normative bias in favor of NGOs, with little differentiation as to which NGOs participate in the governance process (Veltmeyer 2005). Hence partnerships with large conservation NGOs can deliver the best of both worlds to the bank: a generally positive perception of engagement with civil society and trusted organizational partners to which it can delegate an operational mandate and share reputational risks. However, if only these large institutional players gain authority through partnerships, the door to democracy and innovation in conservation governance remains largely closed. It similarly follows that, without new actors in biodiversity governance, the sources of funding will not fundamentally increase.

Bureaucratic Culture

The bank’s bureaucratic culture, then, engenders risk aversion. There are other important features of bureaucratic forms of organization that influence bank partnerships and their delivery of good governance. Barnett and Finnemore (2004) analyzed the power of various IOs by relying on Max Weber’s proposition that bureaucracies exert legal-rational authority. The authors found that IOs are powerful and that this power is often a product of their bureaucratic culture rather than a result of member states’ mandates. The latter has traditionally been the dominant conception of IO behavior. Barnett and Finnemore relied on Weber’s conceptualization of bureaucratic forms of organization to distill major traits of IOs and ultimately show how they became powerful yet pathological actors in global governance. It is this dysfunctional feature of bureaucratic forms of organization that I continue to probe in the following sections.

Weber contended that bureaucracy creates rationally organized social action, and that “under otherwise equal conditions, rationally organized and directed action is superior to every kind of collective behaviour” (Weber 1968, 987). However, Weber pointed to a useful analytical distinction between goal rationality (Zweckrationalität) and value rationality (Wertrationalität), a form versus function distinction.11 Goal rationality involves instrumental calculations that weigh the most efficient means to achieve desired ends in an economic fashion. It is utilitarian and technical reasoning. Value rationality refers to intrinsic values that orient social action. This type of rationality suggests that there are deontological standards that guide social action. When an organization acts with a conscious belief in the unconditional intrinsic value of a particular action, it is eschewing Zweckrationalität as a criterion for reason (Breiner 1996). Weber’s contribution is that bureaucracy and the project of modernity have moved the logic of social action toward goal-rational and expedient behavior and away from value-rational behavior. In other words, bureaucratic forms of organization emphasize the economically efficient achievement of ends.

Applying this insight to bank partnerships, we expect to see the organization devote more institutional resources to the operational performance of partnerships and fewer to ensure the achievement of democracy and innovation as ultimate ends of the partnership mode of governance. Partnerships indeed seem to perform well on operational metrics and poorly when gauged in terms of their contribution to broader global governance values. This performance is carefully examined in the following empirical chapters.

Several authors since Weber have summarized the basic characteristics of modern bureaucracies. Many, including Weber, have created lists of attributes to provide an ideal type that can serve as a yardstick to measure the “bureaucraticness” of different organizations (Hall 1963). However, as Stanley Udy (1959) and Richard Hall (1963) noted in their conceptual evaluations of bureaucracy, not all dimensions need to be present or equally strong to make an organization more or less bureaucratic. In the case of the bank, it is particularly the attributes of hierarchy, division of labor, and an emphasis on rules and routines that are most pertinent to the study of its partnerships.12 The influence of these features is investigated below.

Hierarchy

The literature on organizations traditionally contrasts bureaucracies with organic structures (Burns and Stalker 1961). The former are defined as hierarchical, ritualized, and rational forms of organization, while the latter are horizontal and adaptable through participant interaction. Partnership forms of organization share closer traits with organic structures, which are characterized by flat decision-making processes and a loosely structured environment that promotes experimentation (source on organizational structures that promote innovation). This is a point convincingly argued in Walter Powell’s 1990 seminal article on network governance as a distinct organizational structure that is beyond markets and hierarchies. Powell observes that whereas hierarchies are formal, bureaucratic, and routine-based structures grounded in supervision, networks are characterized by open-ended relational processes grounded in the norm of reciprocity. This point is echoed by Grahame Thompson (2003), who adds that it is the relational, reciprocal, and noninstrumental trust features of the network that make it an analytically different form of organization, beyond hierarchies and markets. Yet that is not the nature of the interaction that we have observed in bank partnerships, as one example of network governance.

As noted in earlier chapters, hierarchy and delegation are fixed features of most of the bank’s partnerships. I argue that the influence of the bank’s bureaucratic culture thwarts the organizational structure of the partnership, and as a result, the desired governance outcomes of democracy and innovation are not realized. Rather than functioning as a separate entity, the partnership remains an extension of the bank, susceptible to the same hierarchical organization, procedures, and routines. To contrast this picture with alternative models, high-tech industries promote partnerships for vertical disaggregation and launch them as semi-independent subsidiaries to promote the kind of innovation that large hierarchical firms move too slowly to produce (Powell 1990). Another strategy historically used by firms like Hewlett-Packard, 3M, Johnson & Johnson, and Emerson Electric when they started becoming too large and bureaucratic was to create internal divisions that were carefully monitored for size. “Johnson & Johnson constantly creates new divisions. Its corporate watchword is simple: ‘Growing big by staying small’” (Katz 2004, 411). In “Democratizing Innovation,” Eric von Hippel (2005) describes another way to escape bureaucratic hierarchy, by relying on end users as the basis of product innovation. This promotes a shift away from the hierarchical structure of the firm. Bell Labs famously designed the architecture of its Murray Hill, New Jersey, building to break down the barriers of bureaucratic compartmentalization. The hallways were so long that they disappeared in the distance. “Traveling the hall’s length without encountering a number of acquaintances, problems, diversions, and ideas was almost impossible. A physicist on his way to lunch in the cafeteria was like a magnet rolling past iron filings” (Gertner 2012, 77). Hence there is no reason to assume that large hierarchies cannot form democratic and innovative partnerships. I examine these alternatives in the book’s conclusion as part of the discussion on the implications of this study. I raise them here simply to note that bureaucratic organizations need not become an iron cage for the partnership.

Division of Labor

Another key feature of bureaucratic forms of organization is job specialization. To make large and complex tasks manageable, the bank depends on divisions of labor. It internally delegates the responsibility of monitoring partnership activities to a task team leader. Externally, the bank replicates the specialization model by creating execution and reporting functions and delegates these to a managing partner within the partnership. In the case of the bank, the extent of responsibility delegated to managing partners is significant, yet oversight is limited. An internal bank evaluation of global partnerships noted:

Global Programs require dedicated funds for adequate oversight. In the case of CEPF, the Bank’s Environment Anchor needs to ensure that this oversight is conducted rigorously and applied methodically across the Bank’s regions, and that the results are consistently aggregated for the purpose of tracking overall program performance at mid-term and beyond. (World Bank Independent Evaluation Group 2007, 40)

Bank operational staff are given very limited resources to participate as active partners. This is in part because the core business line of the organization has historically been lending.13 Bank staff members are largely recognized for loans negotiated and disbursed, not meetings attended or monitoring hours logged on a given project. Partnerships represent a problem in that quantitative culture of staff appraisal. They are work-intensive, since coordination takes more time than unilateral execution of activities on the ground. Furthermore, active participation is limited by the ethos of a bureaucratic culture that relies on the division of labor to carry out specific components of large and complex tasks. When the bank becomes a silent partner in implementation because staff are not given the material resources to play an active role, the managing partner becomes de facto the lead partner. This can explain why managing partners gain influence over the substantive content of partnerships as long as they follow the reporting rules the bank stipulates.

Another effect of the bureaucratic division of labor is compartmentalization. A positive outcome is that professional staff members become highly specialized and able to execute with technical mastery a given task. However, this often comes at the expense of crosscutting collaboration. This is referred to as the silo effect of specialization (de Bri and Bannister 2010). Each unit works within its own universe of technical knowledge, and potentially complementary initiatives are not easily recognized. This is an organizational problem the bank has been battling for some time (World Bank Independent Evaluation Group 2010b). Geographic and thematic, research, and operational units often existed in their own silos, and lessons learned were not transferred among them. The other negative effect of this insularity is that each unit of work constructs its own parochial worldview and develops “internal cultures and procedures that do not promote the goals of those who created the organization or those whom it serves” (Barnett and Finnemore 2004, 40). Thus this bureaucratic feature may enable the staff in the biodiversity unit to develop worldviews that are better aligned with the large conservation NGOs (which are the IOs most frequent partners) than with other sectors within the bank.

Rules and Procedures

Weber (1946) argues that bureaucracy and democracy run at cross purposes. In his Essays on Sociology, he said, “Democracy as such is opposed to the ‘rule’ of bureaucracy” (231). He reasoned that bureaucracy thrives on tenure, stability, repetition, and participation by closed groups of experts. Democracy, on the other hand, thrives on openness and short terms of service to enable participation by a wide group of candidates. The repetition of processes under objective rules creates speed and unambiguity. It does not, however, promote democratic participation or innovative policymaking. Barnett and Finnemore (2004) call this the irrationality of rationalization. It is a process of repeated strict abidance with the rulebook that results in rules and procedures becoming ends in themselves. The bank does not create autonomous partnerships but retains control of their governance and entrusts their operational activities to organizations that are part of an extended closed group of experts, extensively trained through repeated interactions with the bank on how to follow policies and procedures. In this way, bank partnerships fail to deliver on their governance promise.

As a result, partnerships emulate the bureaucratic procedures of regular bank operations. They are made subject to the bank’s project culture. For instance, national groups participating in partnership activities must first become trained in the technique of executing these activities in a ritualized fashion: identification, preparation, execution, monitoring and evaluation, and submitting the written reports in the required formats to the managing partner. Weber (1978) argues that bureaucratic rules rest “on expert training, a functional specialization of work, and an attitude set on habitual virtuosity in the mastery of single yet methodically integrated functions” (988).

Only a very select group of organizations can meet all the above requirements and deliver operational efficiencies to the partnership. From the perspective of bureaucratic efficiency, large IOs are the most rational choice of managing partners. The five largest conservation NGOs, which include the bank’s largest partners (WWF, Conservation International, and The Nature Conservancy), were spending over $1 billion a year on conservation of species and ecosystems in 2012. The Nature Conservancy alone had net assets of over $6 billion, with an annual revenue of $1.2 billion, and employed more than three thousand people in the United States and around the globe (MacDonald 2008, The Nature Conservancy 2011). These conservation NGOs have an installed capacity to absorb partnership funds and disburse resources for field activities. The magnitude of their operations, their established procurement and accounting procedures, and their reporting capacities make them more attractive to work with than smaller, national, or community-based NGOs, which would require more task team leader monitoring hours to ensure adherence to bank policies and procedures.14 When compliance with rules is the goal to which bureaucracies aspire, partnerships of this type are the most efficient and rational choice for the bank. The values of democracy and innovation succumb to the higher goal of ensuring partners faithfully follow the bank’s policies and procedures. The focus on the ability to execute activities according to bank procedures obscures what managing partners will substantively do with their delegated authority, and neglects questioning whether they are the most appropriate actors to promote conservation through democratic governance and innovative policymaking.

Conclusion

The bank states that it pursues partnerships as vehicles to democratize global governance, promote policy innovation, and catalyze additional financing. Yet its partnerships show poor records of democratic decision-making, new policy approaches, and raising financial resources. What theoretical tools do we have to explain this divergence?

On the basis of the empirical summary presented in the previous chapter, I have argued that the traditional theoretical treatment of partnerships as “horizontal governance arrangements” (Andonova 2005) is not empirically accurate in the case of the World Bank. These partnerships instead are characterized by hierarchical delegative relationships. To make sense of this dynamic, I advanced a theoretical argument drawing on elements of principal-agent theory and theory of organizations. Principal-agent theory explains one potential outcome of delegation dynamics. In the case of partnerships, there is a long chain of delegation that creates space for agency slack at various junctures inside and outside the World Bank. However, traditional assumptions about the opportunism of agents as a sufficient condition for generating a mandate-performance gap do not adequately explain what happens in partnerships. When the principal joins a partnership but does not actively help shape its substantive policies because it behaves bureaucratically by prioritizing operational efficiencies, it contributes to this mandate-performance gap. This may create an enabling environment for agents to fill the vacuum and pursue their own preferences through partnerships. The role of managing partnership business “on the ground” and interpreting problems and solutions, which Barnett and Finnemore (2004) argue is the hallmark of IOs’ special source of autonomy and power, can become the autonomy and power of the managing partners.

This adds an important caveat to the literature characterizing IOs as orchestrators of non-state actors through partnerships (Abbott et al. 2012).15 In certain scenarios, a partnership can become a vehicle for the bank to become orchestrated by its partners if the principal-agent prediction is accurate and there is likelihood for cumulative agency slack in long delegation chains. This line of inquiry suggests that the focus on cooperation through orchestration requires in-depth analysis on a case by case basis. Abbott and Bernstein (2015) argue that successful orchestration is needed in the current international system to enhance coherence and avoid initiatives working at cross-purposes. This is an important point. As Hoffmann (2011) explains for the climate change regime, a growing fragmentation of actors and governance experiments can exacerbate centrifugal forces that undermine a global response. Given the proliferation of new actors in the international system there is also a need to ensure emerging practices abide by a common standard of sustainable human development (Bernstein and Brunnée 2011). The orchestration of partnerships offers a potential response to this dilemma. I question whether the Bank or other large international bureaucracies are the best actors to take on this role in the absence of appropriate safeguards that can mitigate the pitfalls prevalent in these forms of organization. I also question if partnerships can have beneficial effects on the IO’s own performance.

A bureaucratic lens suggests a complex dynamic will emerge, in which unintended outcomes of partnerships result not simply from the behavior of potentially opportunistic agents but from the principal’s own organizational features. The bank’s risk aversion and emphasis on hierarchy, staff specialization, and rules and procedures promote top-down alliances that are anathema to the original raison d’être of partnership governance. Hence, horizontal governance is theoretically unlikely, owing to the bureaucratic structure of the bank.

Both these accounts, depicting IOs either as entrepreneurs of horizontal governing arrangements with non-state actors or as orchestrators of transnational governance networks, do not explain the patterns of partnership formation, governance, and management that are described in these chapters. Partnerships are not being governed horizontally. The World Bank permanently chairs most of them, and they lack participatory channels for decision-making. That is, only donors are given the executive function of making decisions that will mainly affect people in places that are not funding the partnership. Those communities on the ground that are most immediately affected by the conservation interventions of partnerships are absent from the governing process. It may then be that partnerships are characterized as horizontal governance arrangements only in regard to shareholders, the donor partners. But this is also not borne out by the cases evaluated in this book. The model that emerges is of a World Bank that maintains executive control of the overall partnership strategy, donors who are brought in to financially support the initiative, a lead partner that is most often a large conservation NGO that houses the partnership secretariat and is delegated management responsibilities, and subcontracting organizations in the field, which are hired to carry out day-to-day activities. This setup looks a lot more like traditional multilateral project execution than partnerships as theoretically conceived in the literature.

Grahame Thompson (2003) said, “The logic of partnership forms of organization conforms to neither self-interested economic, rationalist calculations, nor bureaucratic, procedural decrees. They are based on trust, reciprocity and the ‘identity of a common purpose’” (30–31). Reciprocity needs to be further unpacked. Martin Hollis (1998), for instance, developed a research program based on an economic conception of reciprocity he calls “we-rationality” or “bilateral backscratching.” As a policy, perhaps partnerships need to be spun off from the organizational structures of the founding partners to enable them to pursue their own goals. In both cases, the bank’s current model misses the mark and, with that, the potential advantages of partnerships for promoting desirable values in global governance.