Membership no longer has its privileges: The declining informal influence of Board members on IDA lending

Abstract

This paper examines the ability of Board members of the most important multilateral donor to developing countries, the International Development Association (IDA) of the World Bank, to influence IDA allocations toward their home countries. I show that a system of Bank staff ratings of individual countries' policies, which has become more important in IDA lending over time, has systematically reduced the informal power of Board members. I show that while IDA Board members received more IDA commitments than their counterparts prior to 1989, this influence has disappeared since, as the importance of the policy index has increased. The findings are robust to the inclusion of fixed effects and a variety of relevant controls. In order to further support my argument, I also investigate the influence of Board membership on the Bank's policy index itself. I am unable to establish any positive relationship between Board membership and the index, either during the Cold War or afterwards. The findings not only shed important light on the internal workings of World Bank allocations to poor countries, but also highlight the ways in which institutional designs can affect the balance of informal power in international institutions.