Controlling coalitions: Social lending at the multilateral development banks

Abstract

Multilateral development banks (MDBs) dramatically increased social lending for health, education, and safety nets after 1985. Yet the great powers’ social policy preferences remained relatively static from 1980 to 2000. This contradicts the conventional view that powerful states control IOs. We argue that highly institutionalized IOs like MDBs require a complete model of possible member-state coalitions encompassing the preferences of all member states—not just major powers. We develop multiple measures of state preferences and include all member states in our coalitional model. We evaluate our model and alternatives with an analysis of more than 10,000 MDB loans from 1980 to 2000. We find that when we include all member states weighted by their voting shares, principal preferences are significantly related to lending outcomes.