Abstract
How does informal governance occur in international organisations? While the existing literature suggests that power asymmetries matter a great deal for explaining the uncodified rules and procedures that often develop within international organisations, we argue that power asymmetries alone cannot explain informal governance. Consequently, we develop two specific mechanisms through which informal governance occurs. First, we suggest that regime complexity can act as a source of incentives and opportunities for informal governance. In the face of regime complexity, informal governance offers an attractive way of keeping states bound to the organisation and of managing complex interactions with adjacent regimes. Second, we propose that the coincidence of frozen formal structures and changing causal beliefs allows informal governance to emerge. Problems of great causal complexity are sometimes subject to swings in beliefs about cause–effect relationships, demanding new policy approaches. When such swings occur, and if it is costly to adapt an organisation’s formal rules, states and institutions often simply create unwritten, informal practices as a way to render the institution dynamic. The plausibility of our conjectures is illustrated with evidence drawn from the International Energy Agency.
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Notes
For Stone (2011), informal governance emerges from the interaction of three sources of power: structural power, formal control and informal influence.
Our research design does not allow us to identify sufficient conditions for informal governance because we focus on mechanisms, not variables (discussed below). Still, our work contributes to a proper explanation of informal governance by providing a richer understanding of the processes through which it occurs and, therefore, it goes significantly beyond considerations of power asymmetry alone.
CERM stands for Coordinated Emergency Response Measures. It is an instrument outside of the IEA treaty that provides a rapid and flexible system of response to actual or imminent oil supply disruptions (cf. infra).
This implies that informal governance can be more pervasive in the functioning of international organisations than is often assumed. For example, one study claims that the leading state only overrides formal rules in exceptional circumstances and that ‘modes of formal and informal governance are robust and exist side by side, rather than that informal governance eclipses formal governance or renders it insubstantial’ (Stone 2011: 21). Yet, in part, the informal governance practices that we observe in the case of the IEA are the product of general consent rather than infrequent derogations of formal rules to please the leading power.
Note that formal governance is thus only a component of the standard definition of regimes, defined as ‘explicit or implicit principles, norms, rules, and decision-making procedures around which actor expectations converge in a given issue-area’ (Krasner 1982: 185).
See also the special issue of Review of International Organizations on the topic of informal governance (June, 2013).
Our assumption here is that pursuing cooperation through an existing institution is a lower-transaction-cost option for the states than striking out on their own. Even if the states take the latter exit option, however, their choice to ‘go it alone’ might soon result in the creation of a new institution for cooperation among like-minded states. Thus, the next time they seek to pursue their goals, the regime complex will have grown thicker, creating more options — which brings us back to the argument made above.
Our argument is consistent with those who have suggested that uncertainty facilitates informal governance (Lipson 1991; Whytock 2005; Eilstrup-Sangiovanni 2009). However, these scholars typically refer to the uncertainty that the states have about future events or about other actors’ preferences, such as whether states will be able to keep their trade commitments should a major recession arise. We include such instances of ‘shallow’ uncertainty, but emphasise ‘deep’ uncertainty in the form of changes of beliefs about the nature of the underlying issue/problem and how it can be addressed. The likelihood of a disruptive recession is shallow uncertainty; a change in the belief that free trade brings net benefits to the country is deep uncertainty.
One might argue that such institutional change is not truly informal governance, because a new set of practices has been adopted (i.e., a new equilibrium has been reached). Yet, a reasonable definition of informal governance should surely encompass a situation in which the formal rules of governance remain in effect (via treaty or organisational agreement), even as actors are behaving according to an uncodified set of rules and procedures.
Currently, the IEA has 28 member states.
This requirement was initially 60 days of net oil imports, and later raised to the current level of 90 days.
Interestingly, the IEP does not provide for formal sanctions. However, participating countries that fail to meet their obligations would be denied benefits (i.e., oil allocations) under the agreement (Keohane 1978: 935), which serves as a powerful potential enforcement mechanism.
The concept of ‘structural power’ was originally put forward by Strange (1994).
As of 16 November, 2012. http://www.fe.doe.gov/programs/reserves/spr/spr-facts.html (5 May, 2014).
For anecdotal evidence of US insistence on releasing stocks in 2011 see Broder and Krauss (2011). The Economist’s Schumpeter blog (23 June, 2011) opined that ‘Cynics are suggesting that Barack Obama is keener than most [other IEA members] to tap the stockpiles’.
‘l’AIE … est aujourd’hui de facto le secrétariat du G8 en matière d’énergie’ (Keppler 2007). Also see Lesage et al. (2010).
Personal correspondence with William C. Ramsay, former Deputy Executive Director of the IEA, 4 June, 2010.
Ibid.
For more information on the reasons for IRENA’s creation see Van de Graaf (2013).
Note that the Governing Board can also increase the number of votes available to allocate, for example when new members accede to the IEA. However, in practice, this ensures that positions remain relatively fixed: countries with existing voting weights are unlikely to re-allocate their power to other members of the organisation.
More precisely, South Korea would gain six votes and Spain three votes, whereas the United States would lose three votes, the United Kingdom would lose five votes, and Canada would lose four votes (Colgan et al. 2012).
The three stock releases the IEA has done so far have been done in an informal manner, not according to the rules and procedures laid out in the IEP Agreement.
Even though the 1974 IEP treaty called on the IEA to promote consultation and dialogue with non-members, it took the agency nearly 20 years to establish a Committee on Non-member Countries. This Committee was eventually created in 1990. It replaced the Standing Group on Relations with Producer and other Consumer Countries, which was instituted by the IEP treaty (articles 44–48 and 58), but had not met since 1977 despite these formal provisions (Scott 1994).
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Acknowledgements
We thank Mareike Kleine, Jessica Green and Robert Keohane for their comments on earlier drafts.
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Colgan, J., Van de Graaf, T. Mechanisms of informal governance: evidence from the IEA. J Int Relat Dev 18, 455–481 (2015). https://doi.org/10.1057/jird.2014.4
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DOI: https://doi.org/10.1057/jird.2014.4