AJIL Symposium: Congress and the World Bank

[David Gartner is Professor of Law at Sandra Day O’Connor College of Law at Arizona State University]

In Congress Underestimated, Kristina Daugirdas offers a valuable new perspective on the role of the Congress in shaping the foreign relations of the United States with respect to international institutions.  The article presents a fascinating case study of the assertive role of the Congress in influencing executive branch positions towards the World Bank and offers an interesting counter-example to the idea that the President reigns supreme in contemporary foreign relations.  In these comments, I want to address two important questions raised by the article: First, is it right that Congress has been underestimated with respect to its influence over the World Bank?  Second, is the World Bank case exceptional or does it reflect a more generalizable conclusion about the role of Congress in shaping US policy towards international institutions?

Daugirdas argues that leading accounts of Congress as a feeble participant in foreign affairs have underestimated its influence over US participation in the governance of the World Bank.  She highlights the ways in which Congress has used its power of the purse to impose conditions on funding and give directives regarding the positions taken by the US Executive Director of the World Bank.  Across Presidential administrations and in times of both unified and divided government, the executive branch has largely followed these congressional instructions with respect to the World Bank.  Although the article recognizes some limits to this influence, it captures an important source of congressional leverage even as it potentially overstates its ultimate impact on the day-to-day operations of the Bank.

For the most part, members of Congress seeking to influence the World Bank have focused on specific issues such as environmental protection, human rights, primary health care, and transparency.  Congress has arguably had a substantial impact with respect to the environmental safeguards adopted by the World Bank beginning in the 1990s and the expanded level of transparency within the institution.  However, the record of Congress in influencing the executive branch position with respect to human rights at the World Bank, as Daugirdas acknowledges, is much less impressive.  Congress responded to selective executive enforcement by tightening the directive language in its appropriations bills with limited effect.  Ultimately, the inability of Congress to effectively monitor the role of the executive branch within the World Bank significantly undercuts its influence.

Another very interesting dynamic which the article identifies is the way in which the executive branch sometimes follows congressional direction despite raising constitutional objections to such directives.  Even when the White House defends constitutional prerogatives through the use of Presidential signing statements, the agencies most directly affected by such congressional conditions often have strong incentives to comply in order to prevent the disruption of congressional financing.  This insight suggests that greater attention ought to be paid to the interaction of agencies within the executive branch in analyzing the balance of power over foreign relations.

Given the article’s conclusions regarding the influence of Congress over the World Bank, assessing the generalizability of the findings depends on answering whether the World Bank is somehow exceptional.  The relationship between the Congress and the World Bank is in some ways unique given the driving role of the United States in its founding, the leverage provided by the US voting share and veto power, and the location of the World Bank in Washington, DC where informal contacts serve as an additional source of influence.  However, the International Monetary Fund (IMF) shares all of these features and yet Daugirdas finds that it is much more immune to the influence of congressional directives.

As I have written elsewhere, this divergence is closely tied to the quite different funding structures of the World Bank and the IMF. The key role of Congress in providing replenishment financing every three years for the International Development Association within the World Bank contrasts sharply with the crisis-driven financing of the IMF.  The executive branch has been very successful in securing funding for the IMF either outside of the normal appropriations process or during moments of financial crisis which gives Congress much less leverage.  Daugirdas builds on these insights in her assessment of the lack of influence by the Congress over the IMF but suggests that it is the IMF’s funding structure which is really exceptional.  Further exploring this hypothesis could be a promising area for future research to test the article’s core claim since Congress has also tried to use its power of the purse to foster reform within the United Nations and other international institutions in recent years.

Overall, the article offers a thoughtful case study of the World Bank and challenges the dominant understanding of the weak influence of Congress over the foreign relations of the United States. Although the World Bank may ultimately prove be something of an outlier among major international institutions in this regard, the power of the purse remains Congress’ most important tool for shaping executive action with respect to these institutions.  Congress can influence specific policies when it is persistent and has significant leverage over the regular funding of these institutions, but it remains much weaker in its capacity to monitor executive action.  Therefore, while the article reveals the surprising influence of Congress over the World Bank it also highlights the importance of support within the executive branch for successfully implementing congressional directives and ultimately influencing the direction of leading international institutions.