Institutional Schisms in Argentina: The Impact of Intergovernmental Organizations on Country Institutional Environments

Abstract

In the volatile, uncertain, complex, and ambiguous (VUCA) contemporary business environment intergovernmental organizations (IGOs) play a central role. Their objective is to align member countries for collective global problem solving activities under the guidance of the organization. They aim at providing global stability and security through the creation of supranational institutions. While political sciences have studied IGOs from a global political perspective, little is known about the influence of these IGOs and their supranational institutions on country institutional environments and business environments. Thus, the purpose of this chapter is to understand how IGOs influence these national institutional environments, especially considering the countries’ development levels. By using regime and institutional theory we are able to conceptualize the relation of supranational and national institutions within the differently developed countries. We identify two interconnected factors that impact this analysis, the strength of the national institutional environment of member countries and their power in the IGO. Using these factors, we identify a clash and misalignment of national and supranational institutions in emerging countries, which is leading to enhanced VUCA business environments. We provide an exemplary case that discusses institutional schisms created by the International Monetary Fund’s (IMF) influence in Argentina. Moreover, the impact of IGOs is significant in least developed countries and has little to no impact in highly developed countries.