Electronic copy available at: http://ssrn.

com/abstract=2165514
!

International Organizations as Policy Actors: An Ideational Approach

Daniel Bland and Mitchell A. Orenstein

Keywords
International organizations; public policy; ideas; pension privatization; think tanks
Acknowledgements
A previous version of this paper was presented in August 2009 at the Annual Meeting of
the Research Committee 19 of the International Sociological Association (Montreal). The
authors would like to thank Caroline de la Porte, Angela Kempf, Rianne Mahon, Stephen
McBride, Sonya Michel, and the Global Social Policy reviewers for their comments.
Daniel Bland acknowledges support from the Canada Research Chairs Program.

About the Authors
Daniel Bland is Canada Research Chair in Public Policy and Professor at the Johnson-
Shoyama Graduate School of Public Policy (University of Saskatchewan campus). A
political sociologist studying public policy from an historical and comparative
perspective, he has published eight books and more than 60 peer-reviewed journal
articles. He recently published his volume Ideas and Politics in Social Science Research
(co-edited with Robert H. Cox). Professor Bland has held visiting fellowships at the
University of Chicago, Harvard University, the University of Helsinki, the University of
Southern Denmark, the Woodrow Wilson International Center for Scholars, and the
George Washington University.

Mitchell A. Orenstein is Professor and Chair of the Department of Political Science at
Northeastern University in Boston, MA. Focusing on the politics of economic reform in
middle-income developing countries, he has published many articles and book chapters.
He is the author of Out of the Red (University of Michigan Press, 2001), which compares
strategies for economic transformation in Central and Eastern Europe, and Privatizing
Pensions (Princeton University Press, 2008), which explores the role of international
organizations in the spread of pension privatization worldwide. His new project analyses
the rise and fall of economic paradigms including communism, Keynesianism, and
neoliberalism.

Contact Information
Daniel Bland
Johnson-Shoyama Graduate School of Public Policy
101 Diefenbaker Place
Saskatoon, Saskatchewan, S7N 5B8

E-mail: daniel.beland@usask.ca
Phone: 306 966-1272
Fax: 306 966-1967

Electronic copy available at: http://ssrn.com/abstract=2165514
#


Introduction

One of the core beliefs in the global social policy literature is that some international
organizations and coalitions are more liberalor more socialistthan others, reflecting
the political biases of leading states. In their 1997 volume, Bob Deacon and his
colleagues argued that, on social policy, the World Bank and the IMF followed the liberal
line of the United States while the European Union and the ILO took a more European
or socialist approach (Deacon et al., 1997). Robert OBrien (2002: 144) similarly
classifies international organizations into those with little concern for social policy
versus those that advocate a more vigorous social policy. Robert Wade (1996), in an
outstanding blow-by-blow account of debates over the landmark World Bank publication,
The East Asian Miracle, argues that liberal forces within the Bank successfully fought
off Japanese attempts to raise questions about liberal development strategies and to
highlight the successes of state directed investment in a clear cases of paradigm
maintenance. International organizations, in this view, have more or less fixed
preferences on social policy and other matters that reflect the politics of their masters (see
also Wade, 2001; Wade, 2002).
Taking seriously OBriens (2002: 145) notion that international organizations
are both a tool for implementing policy of powerful actors and an arena for contesting the
content of that policy, we argue that this characterization of international actors as
politically aligned along predictable axes is problematic. Ideas matter much more and
international organizations are far more flexible than most structuralist accounts would
predict. In fact, the policies of international organizations are highly and continually
contested (Deacon and Stubbs 2011), to the extent that policy consensus within
$

international organizations may be the exception, not the rule. International
organizations
1
are open systems in the sense defined by Bertalanffy (1968) and other
system theorists, who argue that a living or open system exchanges matter with its
environment, presenting import and export, building-up and breaking-down of its
material components. International organizations frequently have shown themselves to
be open to new ideas and approaches espoused by well-positioned policy entrepreneurs.
They commonly reverse course on policy. This makes it difficult to characterize the
policy approach of international organizations as stable, except during relatively short
periods of time, where they may exhibit ideological consistency. Intense contestation
differentiates international organizations from those think tanks (Rich, 2004; Stone and
Denham, 2004) that are tied to a particular interest group or ideology. International
organizations tend to navigate a route between complex and shifting ideas and interests,
rather than adhere to a consistent, single path.
To illustrate this theoretical claim, the following analysis shows how international
organizations approached pension privatization from 1994 to 2011, with an emphasis on
the World Bank and, to a lesser extent, the European Union, to show that international
organizations changed their positions over time in response to changing circumstances
and perceptions within transnational pension policy networks. This made them far more
flexible than many domestic think tanks actively involved in the same policy area.
Working within international organizations, policy entrepreneurs (Kingdon, 1995;
Mintrom, 1997) directly impacted transnational pension policy advice, building and
ultimately rejecting the transnational campaign for pension privatization. Moreover, the
directions that these policy entrepreneurs took were not entirely predictable from their
%

political background or the governments they served. While it would be foolish to argue
that structures of political power have no bearing on the actions and advice of
international organizations, our point is that it is difficult to pin international organization
behavior too closely to the power of strong states or stable ideologies. International
organizations as sites of contestation are simply too fluid for this to be true, except over
relatively short periods of time (see also Kogut and MacPherson 2011). They are open
systems that create incentives for continuous contestation and are vulnerable to political
and ideological shifts in the broader ideational arena. To stress this reality, we compare
these organizations with several ideologically-driven think tanks, which have proven
much more rigid in their advocacy of pension privatization than the World Bank and
other international organizations.
Examining changing ideational and discursive processes within international
organizations matters because studies have shown that these processes can have a direct
influence on domestic policy (e.g., Bland and Cox, 2011; Mahon, 2009; Mahon and
McBride, 2008; Schmidt, 2011; Skogstad, 2011; True and Mintrom, 2001). This makes
the analysis of how ideas and discourse evolve within international organizations one of
the most important frontiers of global social policy theory. We contribute to this
discussion by showing that international organizations are far more open systems than
many believe and that their constantly evolving internal ideas and discourse can strongly
impact policy.



&

Ideas and International Organizations
Since the 1990s, a growing number of scholars, including students of international
organizations, have paid attention to the direct role of ideational and discursive processes
in politics and policy.
2
A number of authors have demonstrated that ideational processes
help construct the social and economic problems most public policies are designed to
address (Mehta, 2011; Kingdon, 1995; Stone, 1997). Accordingly, ideas shape the
understandings that underpin political action and the rationale and purposes of
organizations and policies. As far as the role of transnational actors is concerned,
especially crucial are the ideas that can supply country-level policy actors with goals,
norms, and blueprints grounded in a set of assumptions about how to address the issues of
the day through the use of specific policy instruments (Blyth, 2002; Hall, 1993; Skogstad
2011). These ideas provide guidance on institutional creation and reform and generally
serve to reduce uncertainty in times of perceived crisis (Blyth, 2002). By doing so, ideas
help actors define their interests, which are shaped not only by material conditions but
through interpretations of these conditions (e.g., Blyth, 2002; Hay, 2011; Jenson, 1989;
Steensland, 2006; Schn and Rein, 1994; Stone, 1997; Weir, 1992).
From the perspective of international organizations, ideas are a crucial vehicle
through which they can influence domestic policy development. This is true because
these organizations lack formal veto power over domestic policy. This lack of formal
veto power forces them to work through persuasion, convincing important domestic veto
players
3
to adopt new policy preferences. Considering this and the limits of financial
conditionality, ideational processes are the most central means through which they
attempt to shape domestic policy (Orenstein 2008). Consequently, under most
'

circumstances, international organizations are analogous to domestic think tanks, in the
sense that ideas and expertise constitute their main source of policy influence. Yet, as our
analysis of the pension privatization debate suggests, this analogy between international
organizations and think tanks should not hide one key distinction: that international
organizations are much more open to ideational change than ideologically-driven think
tanks. Ideologically-driven think tanks typically promote the same policy paradigm for
extended periods of time, regardless of changes in expert discourse, new information, or
perceived successes and failures of the paradigm. International organizations do not,
since they tend to be riven by disputes between different experts and policy paradigms.
Policy paradigms often are seen as a major source of policy stability. This is the
case because policy paradigms are coherent sets of assumptions that help policy actors
reduce uncertainty and deal with emerging social and economic problems using
integrated policy solutions (Hall, 1993; for a critique of the concept of policy paradigm
see Carstensen, 2011)
4
. In the analysis of international organizations, it is common to use
the concept of policy paradigm, which offers much analytical leverage to analyze the
discourse and the domestic policy impact of such organizations (Skogstad, 2011). Yet,
one contribution of this article is to show that, in the field of social policy reform at least,
international organizations like the World Bank do not stick to the same policy paradigm
over long periods of time, as these organizations are open to the influence of diverse
policy entrepreneurs who mobilize and bring about profound ideational change.
International organizations are not consistent over time in their policy preferences
because they are not subservient to a single interest group or state, but rather open
systems, vulnerable to a wide variety of influences and experts committed to competing
(

social policy ideas and paradigms. This view of international organizations as open
systems contrasts with the realist one, which looks at international organizations through
the lens of a principle-agent dilemma. In the realist perspective, international
organizations are agents of national states. The principle decision-makers are
powerful states. Rarely do international organizations do anything important that they are
not delegated to do by their masters (see Hawkins et al. 2006).
While liberal internationalists contested the realist view by arguing that
international organizations can act on their own to promote cooperation among states, in
recent years, constructivist scholars have taken a different tack, focusing on the ideational
or agenda-setting function of international organizations. For instance, Michael Barnett
and Martha Finnemore (2004: 25) have argued that international organizations have four
basic sources of legitimacy: the rational-legal authority that comes from their charters,
the delegated legitimacy that they derive from states, the moral legitimacy that comes
from their important missions, and the expert legitimacy based on their widely-accepted
expertise in core areas. While realists emphasize rational-legal and delegated authority,
constructivists emphasize moral and expert legitimacy as well, showing that these give
international organizations a certain autonomy from the agendas of powerful states.
This article adopts a constructivist approach, according to which international
organizations are open systems (Bertalanffy 1968) motivated by agendas of a variety of
powerful states as well as the training, beliefs, and ideas of their staffs (Chwieroth 2010).
As a result of these competing sources of legitimacy and power, advocates of a wide
variety of perspectives may have an impact on the construction of the perceived interests
and the actual policy behavior of international organizations to an extent that may vary
)

over time. Empirical analysis of internal discourse of the World Bank on pension
privatization shows that IOs are in fact more open to the shifting ideas of expert
communities than ideologically-driven think tanks.
The example of pension reform is interesting to analyze because this field is
typically described as an arena in which the World Bank has developed a coherent and
stable policy paradigm associated with the idea of privatization (Merrien, 2001).
Recognizing the importance of the time frame used to study both ideas and policy
changes (Campbell, 2004), the following analysis shows that, even within the World
Bank, policy ideas are continuously in flux, an important yet seldom recognized feature
of the policy life of international organizations.

Pension Privatization: The World Bank-led Campaign
Pension privatization began in 1981, when US-trained economists working for the
government of dictator Augusto Pinochet cancelled the pay-as-you-go (PAYG) pension
system in Chile and replaced it with one based on individual pension savings accounts
administered by competing pension fund companies (Brooks, 2005; Madrid, 2003;
Mller, 1999; Mller, 2003; Valdes, 1995; Weyland, 2005). Pension privatization, as the
term is used here, refers to the partial or full replacement of state-administered PAYG
pension systems with ones based on individual pension savings accounts. The Chilean
experiment garnered interest from the UK government of Margaret Thatcher, which
initiated a partial replacement of income-related state pensions with voluntary individual
accounts in 1986 (Pierson, 1994). Other Latin American countries began to show an
interest in pension privatization in the early 1990s once Chiles economy started to grow
*

rapidly. It was widely believed that pension privatization had created a pool of domestic
capital that helped to stabilize and grow the Chilean economy (World Bank, 1994).
At the same time, the World Bank got on board with the pension privatization
campaign. Chief Economist Lawrence Summers launched an effort to promote pension
privatization to help countries cope with demographic aging (Orenstein, 2008). Summers
believed that pension privatization would enable countries to continue to provide old-age
pensions without bankrupting PAYG pension schemes, which require a rough balance
between contributions and benefits and could run into problems as the proportion of older
beneficiaries increases. In 1993, Summers became undersecretary of the US Treasury for
international affairs under President Bill Clinton. Starting in 1994, with the publication of
its landmark report, Averting the Old Age Crisis,
5
the World Bank led a transnational
campaign for pension privatization through a core group of pension reform officials from
its Social Protection division. This campaign was joined by additional international
organizations and government agencies, including the IMF (International Monetary
Fund), the OECD (Organization for Economic Co-operation and Development), the ADB
(Asian Development Bank), and USAID (United States Agency for International
Development). Most of these were Washington-based organizations, with the exception
of the Paris-based OECD, which played a key role in popularizing pension privatization
in Europe. The campaign, as a result, had a major impact on policy in Central and Eastern
Europe, but also succeeded in spreading pension privatization ideas in Asia and Africa
6

(Orenstein, 2005; Orenstein, 2008).


!+

As Figure 1 shows, just as suddenly as pension privatization took off in the
developing world, it stopped. Pension privatization was adopted by dozens of countries
between 1994 and 2004, during the height of the World-Bank-led campaign. As the
United States debated pension privatization during the presidency of George W. Bush
(Bland, 2005), it appeared that the trend would reshape pension systems worldwide
(Blackburn 2003). Then, the momentum stopped. Between 2005 and 2010, no country
privatized its pension system. In contrast, during the previous six-year period, eighteen
countries had adopted some form of pension privatization.
7

While the global financial crisis of 2008 can help explain the prolongation of the
pension privatization lull, it started three years earlier and thus cannot be accounted for
by the 2008 crisis and its impact on both stock market valuations and the fiscal position
of national states. The timing of the decline in 2005 instead appears to be linked to three
factors that helped alter ideas and perceptions about pension privatization worldwide: 1)
The publication of major World Bank reports in 2005 and 2006 that produced a damning
critique of pension privatization and World Bank advocacy of it; 2) the revision of
Chiles landmark privatized pension system under President Michelle Bachelet; and 3)
the failure of President George W. Bushs efforts to enact pension privatization in the
United States in 2005. Without consideration of these three episodes that had a strong
impact on pension privatization ideas and discourse worldwide, it would be hard to
account for the stoppage of pension privatization in 2005, since none of the other key
factors thought to account for pension privatization demographic, economic, political
changed at that time. Importantly, the critical ideas and discourse that seem to have halted
the pension privatization trend emerged, at least in part, from within the World Bank, the
!!

very same international organization that had driven pension privatization in prior years.
This raises some important questions about how the World Bank (and international
organizations in general) formulates its advice and how discourse within the World Bank
unfolds.
We observe this ideational battle in the pension arena, where international
organizations have regularly become a battleground for experts of diverse perspectives
who seek to mobilize the resources of these organizations to their own ends. Starting in
the 1990s, the World Bank was captured by a core group of pension privatization experts,
some from Chile and Argentina, two of the early adopters in Latin America, and their
sympathizers from OECD countries, who used the World Bank effectively to pursue their
own policy agenda. This group clearly enjoyed a period of strong ideational dominance
within the World Bank and broader global pension policy circles. However, the vigorous
campaign they launched for pension privatization worldwide drew detractors from within
the World Bank that ultimately challenged the dominance of the pension privatization
core group.
The first major challenge was launched in a 1999 conference organized by then-
World Bank Chief Economist Joseph Stiglitz, in which he presented a paper with future
White House budget director Peter Orszag (Orszag and Stiglitz 2001) critiquing the
World Bank approach to old-age pensions. Their deliberately provocative paper took
aim at World Bank pension advice over the years since 1994 and questioned the basis
upon which the World Bank supported privately-managed pension savings accounts.
Orszag and Stiglitz argued that pension privatization did not increase national savings
rates as advocates claimed, did not improve labor market incentives, did not increase
!#

rates of return, could not control fees through competition, and was based on an
erroneous critique of PAYG pension systems. In conclusion, as they claimed, most of the
arguments used to support pension privatization were not substantiated in either theory
or practice (Orszag and Stiglitz 2001). This helps explain why Lawrence Summers, then
undersecretary of the US Treasury for international affairs, called for Stiglitz not to be
renewed when his term expired in 2000 (Wade 2001).
This critique sparked other, more sustained efforts, culminating in two major
reports published in 2005 and 2006. Keeping the Promise of Social Security in Latin
America was a 2005 World Bank report that heavily criticized the impact of pension
privatization in that region of the world. It argued that mandatory, private pension
savings accounts had little benefit other than ratcheting down . . . . expectations (Gill et
al., 2005: 280) of unsustainably high promises made in PAYG pension systems in Latin
America. However, systems based on private pension savings accounts that replaced
them did not give appropriate focus to poverty reduction, did not address coverage issues,
and suffered from high fees. For instance, in Chile, such fees ate up half of all pension
benefits for workers, who started contributing in the 1980s and retired starting in 2000
(Gill et al., 2005: 272). The report concluded that there was no basis for individual
accounts playing such a large role in pension provision in Latin America.
As this report was being written, Chile, the country that pioneered pension
privatization, re-reformed its pension system under President Michelle Bachelet to
improve poverty reduction. Bachelets pension reform commission issued a bold
condemnation of the privatized system along lines that were similar to those emphasized
in the 2005 World Bank report: half of contributions were lost to fees, the promise that
!$

the system would increase coverage had not materialized, and the system was manifestly
unfair, harming the poor, women, or those without high salaries or long work histories
(Matijascic and Kay 2006).
The 2006 Independent Evaluation Group (IEG) report headed by Emily Andrews
similarly criticized the World Banks pension work for focusing too much attention on
switching to individual accounts and ignoring poverty reduction goals (World Bank
2006). Andrews had worked for the Bank in Kazakhstan and came to the conclusion that
the Bank had advocated reform in countries that lacked important preconditions for
successful private pensions, such as inadequate financial markets or regulatory capacity.
The IEG report recommended rebalancing the World Banks pension work to support
reform of PAYG pension systems and making sure that it only advocated pension
privatization in countries that had developed financial systems and institutional capacity.
The report argued, echoing Orszag and Stiglitz (2001), that there was little evidence that
pension privatization had increased national savings or aided capital market development.
The World Bank had been over-enthusiastic in its support for pension privatization and
needed to refocus on other goals. Interestingly, the World Bank regularly commissions
independent evaluations of its advisory work. These IEG reports are directed by Bank
officials nearing mandatory retirement age who do so as their last assignment for the
Bank, to enable them to provide dispassionate analysis an institutionalized process in
which the Bank invites critical examination of its own work.
It is striking, given Wades (1996; 2001; 2002) conclusions about paradigm
maintenance at the World Bank that these reports were published at all. They appear to
have been subject to the same process of redaction that Wade reports for the documents
!%

he analyzes. Yet, the burning conclusions ultimately came through. And in this instance,
World Bank ideas and behavior seem to have changed. Pension privatization fell out of
favor at the World Bank. The Director of Social Protection who helped to organize the
World Bank campaign for pension privatization retired and was replaced not by a pension
advocate, but by a labor market expert with limited interest in pension privatization. Core
pension privatization experts at the World Bank went to work in a variety of other
departments and their pension work no longer focused so heavily on privatization. At the
same time, government interest in pension privatization worldwide slowed. Both supply
and demand dried up as the pension privatization lull of 2005-2010 set in.
The European Union experienced similar debates on pension privatization and
similar changes of opinion over time. While starting in 1990s, ECOFIN (European
Council for Finance) issued statements strongly in favor of pension privatization and
fiscal sustainability and modernization, social policy ministers came out against
privatization and in favor of pension adequacy. With the foundation of a joint
committee to study the pensions issue in 2001 (Council of the European Union 2001),
such contrasting views began to be reconciled. This process culminated in a 2012 White
Paper: An Agenda for Adequate, Safe and Sustainable Pensions, in which pension
privatization was no longer seen as the chief means with which to address Europes
demographic aging problem (European Commission 2012). Instead, increases in
retirement age, unification of male and female retirement ages, and restricting access to
early retirement were stressed. Encouraging greater supplementary pension saving was
also mentioned as an important target; however, it was portrayed as supplementary to,
rather than as a replacement of, public PAYG systems. This represented a change in
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emphasis even over the preceding Green Paper (European Commission 2010), which
accorded private pensions a more central role in resolving Europes demographic
challenges.
It would be wrong, therefore, to view international organizations as single-minded
and stable on pension policy. The best way to emphasize this reality is to compare these
organizations with domestic think thanks that exhibit strong ideological and policy
consistency over time. Although some think thanks like the US Brookings Institution are
genuine university without students (Weaver, 1989) emphasizing detached, academic
research over advocacy, other think thanks work more like interest groups and political
advocates defending the same policy alternatives over long periods of time. In the field of
pension privatization as elsewhere, the comparison between this type of advocacy tanks
(Weaver, 1989) as they operate in the United States and international organizations is
especially telling.
As background to the discussion about US think tanks, it is important to stress the
nature of the debate on pension privatization in that country and, especially, the dramatic
nature of the political rejection of this policy alternative in 2005, when President George
W. Bush failed to convince Congress and the public to privatize the federal old-age
insurance scheme, which was created during the New Deal and is known as Social
Security. Although the push to privatize Social Security began in the 1970s and 1980s, it
is only during the mid-to late 1990s that the privatization campaign strongly impacted US
policy debates. In the end, although President Clinton failed to support this policy
alternative, privatization became for the first time a mainstream legislative option during
his second term. Once in the White House, George W. Bush put together a commission
!'

that supported Social Security privatization but its report came out in the after math of the
events of September 11, 2001, after which pension reform was not a priority anymore
(Bland, 2005). It is only after his reelection in November 2004 that George W. Bush
launched a bold campaign to privatize Social Security. In early 2005, the president toured
the country to advocate reform but he failed to convince most members of Congress and
the public to support reform. In the end, his campaign was a genuine and spectacular
political failure (Altman, 2005; Bland and Waddan, 2012; Ross, 2007; Edwards III,
2007). This rejection of pension privatization by a country that had long supported this
type of reform through organizations like USAID did not help promote it around the
world.
Interestingly, however, in the United States since 2005, influential ideologically-
driven conservative think tanks have kept promoting pension privatization, both at home
and abroad. This is where the comparison between these think tanks and international
organizations is especially telling, as far as the ideational fluctuations of the latter are
concerned. Compare, for instance, the World Bank or the EU to the Cato Institute, a
libertarian US think tank. For decades, this organization has been a strong advocate of
pension privatization in the United States. In the mid-1980s, the Cato institute even
developed a long-term, Leninist strategy to weaken support for defined-benefit public
pensions in the United States (Butler and Germanis, 1983; Teles, 1998). More than a
decade later, during the final years of the Clinton presidency, the Cato Institute was at the
forefront of the push for pension privatization in the United States, as it published books
and papers that backed this policy alternative and articulated a systematic privatization
paradigm (e.g., Ferrera, 1998; Ferrera and Tanner, 1998). The same remark applies to the
!(

George W. Bush years, during which Cato experts continued to support efforts to
transform Social Security into a system of individual savings accounts explicitly inspired
by the Chilean model. During the 2005 campaign to privatize Social Security launched by
President George W. Bush, the Cato Institute provided strong support for the presidents
initiative (Niskanen, 2005). More interesting for our discussion, however, is the fact that
the crushing political defeat of this initiative and even the 2008 financial crisis did not
push Cato to significantly alter its views on pension privatization. As opposed to the
World Bank, which revised its position over time, the Cato Institute has continued to this
day to actively promote the pension privatization paradigm, without interruption (Tanner,
2007; Cato Institute, 2009; Tanner, 2012).
In the United States, the Cato Institute is not the only ideologically-driven,
conservative think tank that has maintained its support for Social Security privatization
after the humiliating defeat of President Bushs 2005 privatization campaign. Take the
American Enterprise Institute (AEI), for example. Since late 2007, the main Social
Security expert at the AEI is Andrew G. Biggs, a strong privatization advocate who had
been appointed by President George W. Bush as Principal Deputy Commissioner and,
earlier on, Deputy Commissioner for Policy of the Social Security Administration, the
organization in charge of administrating the federal old-age insurance program. A
controversial figure, Biggs moved to the AEI as a staunch advocate of Social Security
privatization, an ideological orientation and a policy paradigm clearly displayed in his
recent publications (e.g., Biggs, 2011a; Biggs, 2011b). The many publications of this
LSE-trained economist illustrates the enduring commitment of the AEI to Social Security
privatization, which began long before the 2005 Bush initiative and was not deeply
!)

altered after its clear political defeat.
As opposed to ideological think thanks like the Cato Institute, which constitute
policy entrepreneurs devoted to the stable, long-term promotion of a clear policy agenda
(Rich, 2004; Weaver, 1989), international organizations are sites of contestation because
they are open systems. Governments of various and changing political stripes may seek
influence at any point in time, though in the pension reform area, this influence appears
to have been minimal. The openness of international organizations also derives from their
expert character and staffing. Experts are free to change their minds with shifting
perceptions of best practice. They are not trained ideologues, like some think tank
experts, who are little more than advocates, but shaped more by their professional
training. This may induce certain biases (Chwieroth 2010), but in the pension area, it
does not seem to have prevented the existence of sharply contrasting policy views
concerning pension privatization. Led by policy experts, vulnerable to influence of
governments, international organizations are radically open to ideas that may arise in any
number of ways from a variety of sources.

The Impact of Policy Entrepreneurs
One of the most important sources of international organization ideas is not governments,
but individual policy entrepreneurs. In the expert-dominated environment of international
organizations, policy entrepreneurs have the ability to have a strong impact. Indeed, the
launching of the pension privatization campaign at the World Bank can be traced to the
advocacy of one leading policy entrepreneur, Lawrence Summers, together with a policy
team led by Nancy Birdsall, and a report-writing team led by Estelle James. These
!*

entrepreneurial figures established a clear problem definition, a critique of pre-existing
PAYG pension systems, an analysis that proved the value of pension privatization, and
formed an advisory group to promote this privatization paradigm around the world.
Without the efforts of these individuals, pension privatization would never have become
Bank policy (Orenstein 2008).
Similarly, the following Chief Economist of the World Bank, Joseph Stiglitz, also
acted as a policy entrepreneur in this area to sell a very different perspective on policy.
Rather than supporting pension privatization, he opposed it. While his initial paper, book
publication, and conference did not put an end to pension privatization, he did encourage
further dissent within the World Bank that ultimately brought the pension privatization
campaign to a close. Likewise, the individuals who sought to make their careers within
the World Bank through a critique of pension privatization certainly had a strong impact,
as did the outgoing Bank official who led the internal evaluation report that slammed its
pension work.
Since the World Banks reputation depends on its expert legitimacy, the
viewpoints of individual experts can matter a great deal. Like in domestic policymaking
(Kingdon, 1995), powerful and well-placed policy entrepreneurs can have a substantial
impact on policy. Often, this impact takes place through careful analysis and scholarly
proof, not just bureaucratic infighting. Since the currency of the World Banks work is
largely knowledge, individuals who appear to improve upon that knowledge can gain
considerable power. Their expert legitimacy may also be closely tied to their training and
academic track record in the top Western universities.

#+

What is also interesting is that it would be difficult to trace the views of these
policy entrepreneurs to the parties or governments that elected them. Lawrence Summers
and Joseph Stiglitz, for instance, both served in the Clinton administration in the United
States, the first just after and the second just before his term as Chief Economist of the
World Bank. The fact that they took diametrically opposed views on pension
privatization suggests that the policy ideas of these policy entrepreneurs are not tightly
connected to those of particular governments, but reflect their own professional opinions,
at least in some important instances. Experts opinions are not dictated entirely by their
career profession or academic background either, as both these diametrically opposed
economists were trained and employed at both Harvard and MIT.

Adaptability and Impact
As we argue in this article, the policy prescriptions of international organizations change
regularly in response to a number of factors, including expert ideas. As evidenced above,
the position of the World Bank and EU on pension privatization has been anything but
stable. The World Bank has swung from having no real position on pension privatization,
to launching a major advocacy campaign, to backing away and endorsing other
approaches, in more recent years. The EU similarly has been riven by disputes that it has
sought to resolve in a decade-long process culminating in a recent white paper on pension
reform across Europe.
One may wonder: if international organization ideas about policy are so
contentious and unstable, why would anyone accept their advice? Yet, the idea that
policy advice should be stable is nave. As the world changes, countries typically demand
#!

the most up-to-the-minute policy advice, even if it differs from what was on offer in
previous years. The expert legitimacy of international organizations demands flexibility
and adaptability to changing demands and not to be bound primarily by ideology or past
practice. Indeed, up-to-the-minute, flexible expertise may be part of why demand for
international organization advice is in such great demand.
The impact of international organizations depends upon their delegated, expert,
and other sources of legitimacy. In order to maintain this credibility, they cannot afford to
be far out of step with dominant expert paradigms or ideas in international politics. They
must change with the times, in contrast to ideological think tanks, which ideologically-
driven individuals and political organizations of various stripes rely on to provide
intellectual support at times when they have access to government. Access to, and control
of, international organizations is a valuable prize. Policy entrepreneurs and their networks
compete to define the policy ideas and agendas of international organizations. This
suggests that the key to influencing international organization ideas and behavior is to
develop and control policy networks with expertise and credentials relevant to particular
organizations and situations.

Conclusion
Wade (1996), in a brilliant account of paradigm maintenance, argued that the East Asian
Miracle report of the World Bank showed that the World Bank was in thrall to a liberal
economic ideology at the service of the United States. Yet there is a different
interpretation of his story. A truly rigid, ideological organization would never have
agreed to write the East Asian Miracle report in the first place. That the World Bank was
##

forced by Japan, one of its shareholders, to study the Japanese model of economic
development at a time when its leaders were committed to a different policy path shows
openness to new policy ideas as a matter of principle and organization. The East Asian
Miracle story is one of contestation, not unchallenged hegemony. Different camps and
policy entrepreneurs within the World Bank debated whether state planning or market
signals contributed to rapid development in Asia and found some sense in both
perspectives. It is true that liberal perspectives were inserted and even dominated, for a
number of years. It is true that the report had no real impact on the World Banks work in
subsequent years, in which it sought to impose liberal policies on Asia. However, times,
as well as ideas, change. Today, the Chief Economist of the World Bank is a Chinese
economist, Justin Yifu Lin, who supports the state side of the East Asian Miracle story.
At the time, the Japanese were isolated. This is no longer the case.
International organizations are open systems that may be dominated for relatively
short periods of time by certain paradigms and other ideational influences that arise from
powerful governments, professions, or policy communities. However, they also display a
remarkable fluidity over time, especially when compared to ideologically-driven
advocacy tanks that operate in countries like the United States. International
organizations are truly sites of contestation. They may be influenced from a variety of
different sources, but in the pension area, they appear to be particularly swayed by
dedicated and well-placed policy entrepreneurs, who help promote ideas they believe best
address the problems of the day. Thanks to their reliance on expert legitimacy, expert
discourse and ideas can have a fundamental impact on the behavior of these
organizations. In contrast to advocacy think tanks, which identify with relatively stable
#$

ideological creeds and policy paradigms, international organizations can and do change.
In this article, we have suggested a comparative context, in which international
organizations are relatively open compared to ideologically-based think tanks. We have
developed several propositions about international organization behaviors, such as seeing
international organizations as open systems (Bertalanffy 1968), sites of contestation
(OBrien, 2002), and deriving their legitimacy from expert discourse (Barnett and
Finnemore, 2004). This makes international organizations open to a variety of ideas and
perspectives on policy, and rarely committed to one perspective forever. We have shown
that it is dangerous to stereotype international organizations viewpoints on policy, except
during relatively short periods when key policy entrepreneurs and their network succeed
in asserting their dominance.
It should be recognized that this contested and continually changing perspective
on best practice within international organizations makes them difficult to study. One
cannot assume much about their intent without doing a detailed analysis of the thinking
and expert debates taking place within the organization (Kogut and MacPherson 2011).
Nonetheless, the experience of pension privatization suggests that, despite these inherent
difficulties, it is vital to policy analysis to improve our understanding of changing ideas
and discourse within international organizations, as these relatively flexible, expert
organizations can have such a major impact on policy decisions made by governments
throughout the world.
Much more research in global social policy needs to be conducted on the
determinants of ideational change in international organizations and other transnational
actors. For instance, in future research, scholars could take a truly systematic look at the
#%

mechanisms according to which, at certain points in time, why some ideas, and the
experts articulating them, become more legitimate or dominant within particular
international organizations. Another important issue to address in future research is the
conditions under which international organizations are likely to change their dominant
policy ideas and paradigms. Future research also may identify the factors that empower
or reduce the influence of experts and their ideas within particular organizations. This
type of analysis could test the applicability and identify the potential limitations of our
ideational model. In short, there is plenty of work ahead for scholars who recognize the
role of ideas in international organizations and in global social policy and seek to develop
a systematic understanding of their impact.

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Figure 1: Pension Privatization by Year

Endnotes

1
The literature on international organizations is very extensive. For example: Abdelal
2007; Bs and McNeil D, 2004; Checkel, 2005; Dion 2008; Epstein, 2008; Keck and
Sikkink, 1998; Pop-Eleches 2009; Simmons Dobbin and Garrett, 2008; Tarrow, 2005;
Vachudova, 2005; Woods, 2006; Yates, 2001. This article only engages with the most
relevant publications dealing with the core theoretical and empirical issues we raise.
2
For example: Bland and Cox, 2011; Campbell 2004; Hall, 1993; Goldstein and
Keohane, 1993; Hansen and King 2001; Lieberman, 2002; Moreno and Palier, 2005;
Padamsee, 2009; Parsons, 2007; Skogstad, 2011; Somers and Block, 2005; Stone, 2004;
Surel, 2000; True and Mintrom 2001; Wendt, 1999; Yee, 1996.
3
The concept of veto players refers to institutional actors whose support is needed for
the adoption of concrete policy reforms: Tsebelis 2002.
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4
For a critique of the concept of policy paradigm see Carstensen, 2011.
5
On the long-term intellectual roots of the multi-pillar model formulated in that 1994
report see Leimgruber, forthcoming.
6
On the debate about pension privatization in Africa see Kpessa and Bland, 2012.
7
In 2011, two countries privatized their pension systems, Czech Republic and Malawi
(Orenstein, forthcoming). Actually, Malawis decision to mandate individual pension
savings accounts above a certain income threshold was not strictly a privatization, since it
had no prior national pension system. Participation in the Czech Republics system is
voluntary. It is difficult to know if this signifies the restart of a pension privatization
trend or two anomalous cases. However, if pension privatization does restart, it will most
likely take a different form, reflecting the evolution of expert debate since 2005
(Orenstein 2011).