AJIL Symposium: Congressional Oversight of International Organizations

by Paul Stephan

[Paul B. Stephan is the John C. Jeffries, Jr., Distinguished Professor of Law and David H. Ibbeken ’71 Research Professor at the University of Virginia School of Law.]

Many scholars believe that a shift of authority to international organizations benefits the Executive Branch more than Congress. The Executive interacts directly with these organizations and bears undiluted accountability for the consequences of their actions. Congress deals with them sporadically and has weak institutional interests. Members are elected by local, rather than national, constituencies and therefore have an incentive to focus on local rather than national effects of foreign affairs, the actions of international organizations included. Therefore, some have suggested (myself included), Executive Branch actors might prefer international delegations as a means of hobbling legislative oversight. To oversimplify greatly, people like me have argued that internationalists who wish to deepen and broaden international cooperation through institutions might find themselves playing into the hands of the Imperial Presidency.

Kristina Daugirdas’s excellent article pushes back against the widely held belief that international institutions augment Executive power at the expense of Congress. Rather than theorize, she does research. Her careful study of the history and pattern of legislative oversight of the World Bank demonstrates the Congress has the capacity effectively (and significantly) to influence U.S. policy toward the Bank, and even to alter the Bank’s behavior. Creation of the Bank did not lead to a surrender of the legislature’s prerogatives, but rather gave members (especially in the House) a new pressure point for extracting concessions from the Executive.

The key factor that enables Congress to ride herd on the Bank, Daugirdas observes, is the Bank’s need for periodic new funding. This was not always true, as the Bank was designed to generate a positive return on its founding capital. The creation of a more aggressively redistributionist institution in the form of the International Development Association in 1960 changed this dynamic, because the IDA depends on frequent infusions of new capital. Because Congress must approve any U.S. contributions, it can hold the funding hostage to its policy preferences. Moreover, it has demonstrated an ability to monitor the Bank and thus to respond to slippage between its instructions and the Bank’s performance. In early years, when Congress instructed the U.S. Executive Director not to vote in favor of certain loans, the U.S. representative behaved as required but did nothing to alter the votes of other Directors. After Congress responded through more aggressive pressure on the funding lever, the Bank shifted course.

Although the need for regular funding is the salient variable, also important is the role of departmentalism within the Executive Branch. The White House, with its own agenda as well as acting as the focal point for all the Executive’s components to express their interests, may have a particular policy, but the Treasury has the responsibility for managing the United States’s relationship with the Bank and deals regularly with Congress. When Congress has been unhappy, Daugirdas shows, it focuses its displeasure on Treasury, which in turn works hard to steer the Bank’s behavior in the direction Congress wants, whatever the White House might prefer.

This article does several wonderful things. First, it is meticulously well documented. Reflecting a move that has gained renewed fashion in our field, she uses history to unpack practice. I think her evidence is compelling.

Second, the article is counter-intuitive. Almost everyone who has thought about the problem in instrumentalist, rational-choice fashion has come away concluding that the Executive gains relatively, if not necessarily absolutely, whenever authority shifts to an international institution. Daugirdas demonstrates that the story has more plot twists and complexity than that simple claim admits.

Third, the article does not over-promise. Daugirdas notes that her story requires both a lever, such as the funding power, and an interest. Nor does the interest have to correspond to the nation’s preferences: As she notes (p. 521), committee chairs and other congressional leaders have disproportionate sway over the expression of policy preferences through the legislative branch. What she demonstrates, rather, is that the supposed localism that infects legislators’ preferences does not prevent the Congressional barons and baronesses from keeping their hand in with regard to the Bank.

My one criticism is not of the article, but rather of the arguments to which she responds. The problem with shifting authority to international institutions, some maintain, is a dilution of democratic accountability. This critique has close parallels to discussions of the “democracy deficit” of the European Union. Shifting responsibility to an international institution, the critics assert, diminishes democratic control over policy in the absence of mechanisms to check the institution’s decisions after they are made.

If democratic accountability is the problem, then, as Daugirdas argues, increased oversight by Congress seems a valid response. But, at least for us old Russian hands, democracy is an overstated virtue. As Plato and Aristotle well understood, regimes that simply express and enforce popular preferences can cause great harm. Vladimir Putin, many informed observers maintain (and I believe), is perhaps the most widely popular and democratically supported leader Russia has known in many years, but his impact on that poor nation has been baleful. Political theorists argue over what values we should seek to maximize, but many find attractive various forms of civic republicanism based on civil society and personal liberty, institutions that Russia and other low-trust societies lack. Others (and I am in this camp) agree, but argue that the right question is which set of institutional arrangements, on average and recognizing the possibility of variation, are most likely to make people better off, i.e., to live lives that are as rewarding as possible. We like civil society and personal liberty not only because they appeal to our normative values, but because they have a good track record of improving human lives.

From this perspective, the concern about international institutions (at least the one I have tried to articulate) is the possibility of interest-group capture and other forms of rent-seeking behavior. And within this framework, effective legislative oversight of the sort that Daugirdas documents can play a positive role. Even if the particular policies that legislative leaders impose on the Bank and similarly situated institutions do not necessarily reflect popular preferences, the threat of intervention itself can be valuable. The prospect of withheld funding may deter some of the less desirable behaviors associated with the double delegation entailed in shifting administrative authority through the Executive to an international organ. For us law-and-economics types, the appropriate mode of analysis is Thomas Schelling’s account of hostage taking, which, he argued, can enhance the value of ongoing informal relationships. A hostage can serve as a guarantee of good behavior, Schelling argued, but not if the hostage taker would prefer keeping the hostage regardless of the hostage giver’s conduct. Taking a hostage that the giver values more than the taker (what some call a puny prince) empowers the taker to punish an opportunistic counterparty, but also serves as protection against the hostage taker’s opportunism. The ability to block otherwise desirable funding serves as Congress’s hostage and can promote cooperation between the two branches even when an independent third party (i.e., the courts) cannot enforce their promises to each other.

All this is to say that Daugirdas has made a great contribution to the literature on international delegations, all the more valuable because it rests on data rather than theory-driven intuitions. My theoretical quibbles are just that, and are not meant to detract from my enthusiasm for a great article.

http://opiniojuris.org/2013/12/16/ajil-symposium-congressional-oversight-international-organizations/

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