International Bureaucrats and the Formation of Intergovernmental Organizations: Institutional Design Discretion Sweetens the Pot

Abstract Bureaucrats working in international intergovernmental organizations (IGOs) regularly help states design new IGOs. Sometimes international bureaucrats possess limited discretion in institutional design; sometimes, they enjoy broad discretion. In fact, they gain discretion even when they openly oppose state preferences. This contravenes conventional thinking about delegation: discretion should decrease as preference divergence between states and international bureaucrats increases. We develop a principal-agent theory of how much discretion states grant to international bureaucrats in the design of new IGOs. This is novel: while principal-agent theories of international delegation are common, scholars have not analyzed principal-agent relationships in the creation of new IGOs. We argue that even an international bureaucracy that disagrees with states' design preferences may enjoy substantial design leeway, because of states' need for bureaucratic expertise. In developing this argument, we employ a formal principal-agent model, case studies, and an original data set.