Organizational reform and the rise of trust funds: lessons from the World Bank

Reinsberg, B. (2017) Organizational reform and the rise of trust funds: lessons from the World Bank. Review of International Organizations, 12(2), pp. 199-226. (doi: 10.1007/s11558-017-9268-1)

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Abstract

Over the past two decades, earmarked funding to international development organizations through special-purpose trust funds has increased greatly. This paper studies the incentives for trust funds from the perspective of multilateral agencies, notably the World Bank. A theoretically intriguing type of funds are so-called “pass-on funds,” in which one unit hosts the fund, then passes on its resources to another type of unit for implementation. Each unit has different preferences for the specific types of activities to be supported by the fund. Interviews with World Bank staff and complementary documents demonstrate the rationale for pass-on funds and the associated division of labor between fundraising network units and implementing regional units. While pass-on funds reflect an efficient division of labor between functionally specialized units, they increase the misalignment between sector-specific global priorities and country-specific needs. Organizational reform drove the sudden explosion of pass-on funds around the millennium turn, facilitated by growing availability of donor monies for specific sectors and by lenient internal regulation. Organizational reform undermined budget autonomy of sector units, causing those units to seek new funds in their areas of expertise. A number of reform features also reduced administrative budgets of country units, increasing their demand for pass-on funding grants. The results contribute to the emerging literature on earmarked funding and highlight the need to consider international organizations as heterogeneous actors.

Item Type:Articles
Status:Published
Refereed:Yes
Glasgow Author(s) Enlighten ID:Reinsberg, Dr Bernhard
Authors: Reinsberg, B.
College/School:College of Social Sciences > School of Social and Political Sciences > Politics
Journal Name:Review of International Organizations
Publisher:Springer
ISSN:1559-7431
ISSN (Online):1559-744X
Published Online:09 February 2017
Copyright Holders:Copyright © 2017 Springer Science+Business Media
First Published:First published in Review of International Organizations 12(2): 199-226
Publisher Policy:Reproduced in accordance with the publisher copyright policy

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