Pallas y Urpelainen NGO Monitoring and The Legitimacy of

Rev Int Organ (2012) 7:1–32
DOI 10.1007/s11558-011-9125-6
NGO monitoring and the legitimacy of international

cooperation: A strategic analysis
Christopher L. Pallas · Johannes Urpelainen
Received: 30 December 2010 / Revised: 8 May 2011 / Accepted: 11 May 2011 /

Published online: 3 June 2011
© Springer Science+Business Media, LLC 2011
Abstract States often invite NGOs to monitor international cooperation. Un-

der what circumstances are states likely to take this step? We argue that NGO
monitoring allows states to provide domestic publics with credible evidence
regarding successful cooperation, but that this credibility carries a cost: if
states fail to cooperate, a participating NGO will expose this failure and
thus delegitimize the cooperation effort. Our formal analysis indicates that
states obtain a dual benefit from NGO participation: in addition to enhanced
legitimacy, NGO scrutiny helps states credibly commit to high cooperation
levels vis-á-vis each other. The increased costs of failure, however, may deter
state use of NGO monitoring. Surprisingly, we find that NGO monitoring is the
most useful for states when the cooperation cost is relatively low. We explore
the empirical relevance of our theoretical argument in NGO monitoring of
World Bank development projects and compliance with the Kyoto Protocol.
We also explain why NGO monitoring has been disallowed in the Global
Environment Facility. Our analysis provides a firm strategic foundation for
the idea that NGO participation sometimes confers benefits to states, and our
theory has several empirically falsifiable implications.
Keywords Non-governmental organizations · International cooperation ·

Monitoring · Legitimacy · Formal modeling
C. L. Pallas (B)
International Conflict Management Program and Department of Political Science,
Kennesaw State University, 1000 Chastain Rd, MD 2201, Kennesaw, GA 30144, USA
e-mail: clp2795@gmail.com
J. Urpelainen
Department of Political Science, Columbia University, 420 W 118th St, 712 IAB,
New York, NY 10027, USA
e-mail: ju2178@columbia.edu
2 C.L. Pallas, J. Urpelainen
1 Introduction
The influence of NGOs in world politics has increased markedly over the
past 40 years. States have often allowed, or even invited, NGOs to monitor
policy implementation according to international treaty commitments.1 The
Convention on International Trade in Endangered Species of Wild Fauna
and Flora (1973), for example, relies heavily on NGO monitoring of state
compliance with treaty commitments (Raustiala 1997, 729). In 1993, the World
Bank established an Inspection Panel that allows individuals and organizations
to file complaints regarding development projects financed by the World
Bank.2 In the International Labor Organization, the International Programme
on the Elimination of Child Labour (1992) uses local NGOs in the monitor-
ing and evaluation of country projects.3 Indeed, the scholarly literature on
international cooperation has also recognized NGOs as important actors that
often complement, or even supplant, states and international bureaucrats as
monitors of policy implementation and treaty compliance (Dai 2002; Raustiala
1997).
The growth of NGOs themselves is explained by growing public awareness
of transnational issues and increasing citizen capacity to organize and address
these issues (Fox and Brown 1998b; Lipschutz 1992; Coleman and Wayland
2006; Edwards 2001; Florini and Simmons 2000). But why do states allow
NGOs to monitor policy implementation? NGO involvement can pose sig-
nificant risk to states, as activists publicize implementation failures and tarnish
state reputations. More generally, NGOs may be difficult to please and poor
team players.4
In the extant literature, two main arguments have been advanced to explain
why states would take the uncertain step of allowing NGOs to monitor
policy implementation. The first is that states are not wholly in control of
the process: NGOs are a powerful independent force capable of bargaining
with states on a level playing ground (Lipschutz 1992; Fox and Brown 1998a;
Simmons 1998). This explanation is questionable, however, because NGOs
most frequently can only realize their agendas through influencing states to
act in support of those agendas or because state consent is required for policy
change (Keck and Sikkink 1998; Clark 2001; Risse 2000). As Rieman (2006,
64) writes, “although NGOs have undeniably had a hand in constructing new
international opportunities, ultimately it is the decisions of states and politics
1 To be sure, NGOs can often monitor policy implementation without state permission. As we
explain in the next section, in this article we focus on situations wherein formal access is important
for effective monitoring.
2 See http://www.worldbank/inspectionpanel.
3 See http://www.ilo.org/ipec.
4 According to a story told to the authors by one senior activist, several NGO leaders were once
invited to dine with Jim Wolfensohn, then President of the World Bank, as part of his effort to
develop closer relationships between the Bank and its critics. After dinner, Wolfensohn asked his
guests whether they were his friends or his enemies. One replied, “Well, I guess we’re frienemies.”
NGO monitoring and the legitimacy of international cooperation: A strategic analysis 3
among states that determine which opportunities are opened and which remain
closed.” The second explanation is that NGOs are subservient to the states that
invite them to participate (Raustiala 1997). But even though states may benefit
from NGO monitoring, the fact remains that NGOs often ‘name and shame’
states for compliance failure (Keck and Sikkink 1998; Simmons 2009; Thomas
2001). Thus, it is not clear when and how the benefits of NGO monitoring
exceed the costs.
We offer a strategic analysis of why states allow NGO monitoring of pol-
icy implementation in international cooperation. We view international co-
operation as the mutual fulfillment of treaty obligations. Our basic premise
is that when states cooperate, they obtain two different payoffs. First, they
obtain a material payoff that depends on the success or failure of cooperation
(Keohane 1984). This payoff captures the direct material consequences of
cooperation success or failure. For example, coordinating regulations may
improve environmental quality and reduce the transaction cost of economic
exchange. Second, they obtain a legitimacy payoff that depends on how
domestic audiences perceive cooperation (Hurd 1999; Thompson 2006). This
payoff reflects the domestic reaction to information cooperation: does the
public support international cooperation, or does it adopt a hostile stance?
For example, it may depend on the state’s regime type (Dai 2005). Given
that NGO monitoring may potentially influence the material and legitimacy
payoffs, we examine the conditions under which states are willing to allow
NGO monitoring of policy implementation.
We find that NGO monitoring indeed produces two benefits: First, NGO
monitoring mitigates the incentives to free ride. If NGOs can publicize failed
policies, states have stronger incentives to cooperate. Perhaps surprisingly, the
effectiveness of NGO monitoring is maximized when cooperation is not very
costly to states. If the cost of cooperation is relatively low—though not so low
that cooperation does not present a formidable collective action problem—
the presence of a monitor induces states to significantly increase their efforts,
and thus the collective action problem is mitigated. Second, NGO monitoring
provides states with a “stamp of approval” if they manage to cooperate.
By allowing NGO monitoring, states can provide domestic audiences with
external verification that their efforts were successful. The main cost of NGO
monitoring is that if cooperative policy implementation fails, NGO monitoring
will produce adverse reputational effects, as domestic audiences can obtain
accurate information regarding the failure.
Based on these theoretical results, we expect that states allow NGO par-
ticipation when (i) external monitoring effectively mitigates free riding be-
cause the cooperation cost is relatively low and states value the stamp of
approval, while (ii) the expected benefits of verifying successful cooperation
outweigh the expected costs of publicizing implementation failure. Thus, our
explanation for why states allow NGO monitoring is that activists can enhance
cooperation while also increasing its legitimacy before domestic audiences.
Equally important, our theoretical argument generates empirically falsifiable
hypotheses on (i) when the benefits of NGO monitoring exceed the costs and
(ii) how NGO participation influences state behavior in cooperative policy

implementation. We probe the plausibility of these hypotheses in three case
studies.
Our broader contribution to the literature is to bridge the previous perspec-
tives on NGO participation. While some previous research has uncritically
assumed that NGOs are powerful actors, we derive their ability to secure
access from their ability to be useful to states through information transmission
to domestic audiences. At the same time, however, we need not assume that
NGOs are completely unable to criticize and shame non-compliant states.
Thus, we can explain why NGOs can be independently powerful actors in the
monitoring of international cooperation without assuming that their power is
exogenous. In addition to noting that they may sometimes be useful for coop-
eration, as Raustiala (1997) and Dai (2002) have already done, we characterize
the conditions under which they are not welcome to participate. Thus, our
strategic synthesis of previous theories lends itself to systematic empirical tests.
The remainder of the article is organized as follows. First, we define con-
cepts and review the literature on NGO participation in international coop-
eration. Second, we present and solve our theoretical model. Third, we apply
the model to three empirical cases of international environmental cooperation.
Finally, we offer a concluding discussion.
2 International Cooperation and NGO Monitoring
In this article, we examine the role of NGOs in international cooperation

(Dai 2002; Price 1998; Raustiala 1997). We define international cooperation
as a joint effort by multiple states to solve a problem at hand, such as
environmental destruction or costly trade barriers (Keohane 1984). In practice,
international cooperation usually entails formal treaty commitments.5 Follow-
ing convention, we assume that states can decide whether NGOs are allowed
to participate in international cooperation efforts. Thus, we do not assume that
NGOs are so powerful as to force states to grant access.
NGOs can participate in international cooperation in many ways. They
can try to influence negotiations, provide resources and information to state
parties, or fight for ratification of treaties at the domestic level (Raustiala
1997). In this article, we focus on participation in the form of monitoring inter-
national cooperation. We define monitoring as the efforts of an actor to obtain
and publicize information regarding the success or failure of international
cooperation, as prescribed by an international treaty (Dai 2002; Mitchell 1994).
5 We recognize that international treaties may also be used to establish formal organizations with
autonomous monitoring functions; the IMF is one such example. Such organizations, however,
pose particular risks to states as their autonomy may allow them to escape state control (Barnett
and Finnemore 1999) and are relatively uncommon.
Thus, NGO participation consists of activities to ensure that states comply with
a given international treaty by implementing policies and projects according
to its formal provisions. For example, Greenpeace could monitor whaling or
Transparency International could survey anti-corruption efforts.
It is important to note that NGOs may operate as monitors in both for-
mal and informal capacities. NGOs frequently undertake to monitor state
behavior on their own initiative and may even eschew state connections as
a means of demonstrating neutrality. Such ‘volunteer’ monitors may then
seek to influence outcomes through public pressure or informal lobbying. The
behavior of NGOs as outsiders to policy implementation, however, has been
extensively discussed elsewhere in the literature (Keck and Sikkink 1998; Risse
2000). This article focuses instead on the role of NGOs as insiders, a role that
has received less attention.
As Rieman (2006) notes, formal NGO participation in international co-
operation is ultimately a direct result of state permission. Why would states
permit NGO participation in policy implementation as monitors, despite the
possibility of adverse reputational consequences upon cooperation failure?
One hypothesis is that states permit NGOs essentially because they are forced
to do so by the power of public opinion. Lipschutz (1992, 391) has suggested
that NGOs create new, transnational communities that could “challenge, from
below, the nation-state system.” Shaw (1992, 432) has argued that NGOs act
as representatives of a new “global society” that can “challenge the principles
of sovereignty” (see also Falk 1993; Spiro 1998; Payne 1996). Although recent
theories offer more nuanced assessments of interactions between NGOs and
state or institutional actors, they also suggest that states collaborate with NGOs
largely because NGOs generate public pressure, changing the incentives facing
states (Nelson 1997; Keck and Sikkink 1998; Clark 2001). However, these
theories offer limited insights into when and how NGOs are so powerful that
states allow their participation. What are the sources of NGO power, and when
does such power allow activists to monitor international cooperation?
An alternative explanation for NGO participation is that it directly benefits
the states. In the context of environmental cooperation, Raustiala (1997, 728)
has argued that “certain NGOs are well positioned to provide independent
assessments of individual states’ compliance records as well as other data
useful or necessary for international environmental cooperation.” Similarly,
Dai (2002) proposes that the presence of interested third parties, such as
NGOs, is a crucial determinant of how states arrange the monitoring of
international treaty commitments in different circumstances. Pralle (2003, 242)
notes that NGOs may seek out policy spaces where their interests and those
of state or institutional actors are aligned: “advocacy groups and policymakers
consciously define policy problems and solutions to attract the attention of
policymakers and the public, as well as gain entry into venues.” However, this
literature also offers limited insight into when and how the benefits of NGO
participation exceed the costs. How does NGO participation shape strategic
interactions between states and domestic actors, and what are the factors that
systematically increase the value of NGO participation to states?
Our argument can be summarized as follows. If states allow NGO partic-

ipation, they understand that cooperation failure and success will be publi-
cized, whereas in the absence of NGO participation the ultimate outcome of
international cooperation will not be revealed to domestic audiences. Each
state has a greater incentive to cooperate under NGO scrutiny, and this helps
states solve collective-action and free-rider problems.6 Thus, the first benefit
of NGO participation to states is that enforcement and commitment problems
are mitigated. However, improved cooperation also implies that domestic
audiences have more reason to believe that the international cooperation
efforts are legitimate. Thus, the second benefit of NGO participation is that
it allows monitoring to legitimize international cooperation.
We recognize that the effectiveness of NGO monitoring may be dependent
on the resources, expertise, and existing influence of the NGO or NGOs
involved. For instance, NGOs with limited funds or lacking global networks
of partners may be unable to track compliance with global treaties, whereas
those with limited domestic clout in a given state may be unable to successfully
bolster or threaten policymakers’ reputations. However, empirical research in
the service-delivery realm has shown that states are capable of selecting NGOs
likely to meet state needs and of discarding those NGOs that fail to meet state
requirements (Cooley and Ron 2002). Therefore our model assumes that states
are likewise able to select NGOs capable of successful monitoring.
In our explanation of NGO monitoring, the concept of legitimacy has a
crucial role. The legitimacy of the international cooperation effort is defined
as the extent to which various domestic audiences of the state parties believe
that the state parties are complying with their obligations under international
law (Hurd 1999; Thompson 2006). This definition implies that the domestic
audiences accept the desirability of international cooperation and subscribe to
the view that international law itself is legitimate (Bodansky 1999). While this
assumption may not always hold, we find it appropriate for an analysis of the
interactions between monitoring and legitimacy. If domestic audiences were
simply uninterested in international cooperation, it would be hard to imagine
that NGO monitoring could have any effect on international cooperation. In
our model, the reason why NGO monitoring may affect the legitimacy of the
international cooperation effort is that the NGO can publicize information re-
garding non-compliance, reporting whether state participants are conforming
to the desired norm of cooperation.
When and how can NGOs influence the legitimacy payoff of a state? We
model NGO activity as what Keck and Sikkink (1998, 18) call “information
politics:” NGOs seek to publicize key facts regarding the issues in which
they are involved (Gemmill and Bamidele-Izu 2002). By monitoring policy
implementation, NGOs can release and publicize information that deteriorates
or improves a state’s reputation in the eyes of domestic and international
6 Inthe main model, we assume that all states are under NGO scrutiny. However, we also extend
the model to cover partial monitoring of some but not all states. All our results continue to hold.
audiences. If the NGOs are perceived as credible, such information will

lead these audiences to update their beliefs on the state’s preferences and
trustworthiness.7 In turn, the importance of such reputational effects depends
on the domestic political economy of a state. Democracy, free media, political
competition, and a culture of transparency may all influence the extent to
which a state is interested in the legitimacy payoff (Dai 2005). Similarly, the
legitimacy payoff may depend on public international commitments and highly
visible treaty obligations that generate “audience costs” upon compliance fail-
ure (Guzman 2008).
3 Formal Analysis
In our model, states i = A, B engage in international cooperation. Their

payoffs depend both on the actual effectiveness of international cooperation
and perceptions of legitimacy among domestic publics. To mitigate free-
rider problems and enhance the legitimacy of international cooperation, the
two states can invite an NGO to monitor the cooperation efforts.8 In the
main text, we present a simple and accessible baseline model. Technically
oriented readers can find several extensions in the mathematical appendix (see
Appendix B). Some of the most important ones are also discussed in the main
text.
Our theoretical argument is based on several key assumptions. First, we as-
sume that the NGO prefers international cooperation and domestic audiences
understand this. This assumption implies that the NGOs we are interested in
must have formed reputations, and so it applies best to large and established
organizations, such as Amnesty International or the WWF. Second, we assume
that the NGO has the resources to obtain and reveal information regarding
compliance or non-compliance to domestic audiences. Again, this assumption
applies best to large NGOs with a substantial resource base. Finally, we assume
that states can block NGO monitoring if they so wish. This assumption stacks
the deck against NGO participation, as it implies that states allow monitoring
only if they expect net benefits from it.
Two analytical simplifications warrant a brief discussion. First, we assume
that the choice of NGO monitoring is binary: yes or no. This simple formula-
tion allows us to characterize the decision on NGO monitoring in the starkest
possible fashion, and thus enhances the accessibility of the formal analysis. In
7 Inprinciple, NGOs should cease to be credible if they no longer represent the desires or interests
of their claimed stakeholders. In practice, NGOs’ reputation for principled advocacy is often
such that even when NGOs make inaccurate claims regarding the interests of their purported
constituencies, they may still be perceived as trustworthy (Wade 2009; Nelson 2000).
8 Because all NGOs involved in monitoring are subject to the same state selection and conditions,
we treat them as a single actor. We recognize that a given NGO may be an umbrella organization
representing multiple smaller actors, or that monitoring may be conducted by a variety of allied
NGOs.
reality, states may allow various degrees of monitoring, from observer status to
full oversight and formal standing in dispute resolution. However, the binary
decision can also be thought of as the decision to significantly increase the
degree of monitoring relative to a low baseline. Second, we do not focus on
alternative monitoring arrangements, such as international organizations or
the media. While these alternative monitors may also help states solve their
collective action problems, as Dai (2002) has previously argued, we focus here
on NGOs. In the concluding section, we will return to these two simplifications
and outline a strategy for addressing them in future research.
3.1 Model
Sequence of moves The game is played as follows:

1. States i = A, B simultaneously say ‘yes’ or ‘no’ to NGO participation.
2. States i = A, B simultaneously select a cooperation effort Ei ∈ [0, 1].
At the end of this sequence, payoffs are allocated. They depend on the out-
come of cooperation, success or failure, and NGO participation.
To keep the model as simple as possible, we do not endogenize the NGO’s
incentives and ability to participate. Instead, we assume that the NGO is
willing to participate, and if it is allowed to participate, it will be able to
effectively monitor behavior. Given that the NGO community often actively
seeks access to international institutions, this assumption appears plausible.
In the Appendix, we also show that both assumptions can be relaxed without
changing any of the main conclusions of the formal analysis.
We assume both states must say ‘yes’ for the NGO to gain access. In a
symmetric model, this assumption is innocuous, as the states hold similar
preferences regarding NGO participation. Below, we will also consider an
asymmetric variant in which one of the states can unilaterally decide on NGO
participation. We find that our substantive conclusions remain unchanged.
Payof fs The payoff to state i depends on three factors. First, does coop-
eration succeed or fail? Second, how does the domestic audience view the
cooperation effort? Third, how costly is cooperation? We assume that coopera-
tion succeeds with probability E A E B . This formulation states that cooperation
succeeds only if both states manage to do their part. It also implies that state i
has a greater incentive to expend effort if state j also expends effort, so that the
efforts can be thought of as strategic complements (Aghion and Tirole 1997).
Without loss of generality, each state i obtains a reward worth 1 if cooperation
succeeds and 0 if it fails.
The net cost of cooperation effort Ei to state i is c · Ei2 − Ei , where c > 1 is
a coefficient for the marginal cost of effort.9 The marginal cost of the cooper-
ation effort is initially negative but increasing on the margin. The assumption
9 We assume c > 1 to ensure that the equilibrium is interior.

of initially negative costs is unconventional, but it is realistic because many

cooperation efforts produce some private benefits as well.10 In the Appendix,
it is shown that the main results hold for much more general functional forms
as well.
What about legitimacy? We assume that the legitimacy of the cooperation
effort depends on the posterior probability of successful cooperation, denoted
by ρ. Define L(ρ) as a strictly increasing function such that, without loss of
generality, L(0) = 0. This function is interpreted as measuring the legitimacy
payoff to a state. It increases if external audiences are convinced that in-
ternational cooperation will succeed. As discussed above, the magnitude of
the increase may depend on regime type (democracy or autocracy) and the
visibility of the treaty obligations in focus. We leave the functional form open
for now, and discuss the consequences of different functional forms below. The
only assumption that we impose is that L(1) < 2c − 2.11
The legitimacy payoff depends on NGO participation as follows. First, if
the NGO does not participate, the domestic audiences are unable to observe
success or failure. Instead, they form expectations regarding the probability
of success using their prior beliefs. These expectations must accord with the
true prior probability of success, and so we must have ρ = ρ 0 = E∗A · E∗B .
Importantly, since the domestic audiences cannot observe the actual success or
failure, ρ 0 is not something the two states can endogenously influence through
the choice of efforts E A , E B . Instead, it must be chosen so that it is compatible
with the equilibrium choices E∗A , E∗B .
Second, if the NGO does participate, the domestic audiences will directly
observe success or failure, as the NGO reports it. Thus, in equilibrium ρ 1 = 1
if cooperation succeeds and ρ 1 = 0 if cooperation fails. In this case, the
governments can influence ρ 0 through their own activities. This assumption
is critical to understanding the effects of NGO participation. The presence of a
‘watchdog’ will induce governments to cooperate more (Raustiala 1997), and
the increased incentive to cooperate will also help states mitigate the free-rider
problems that characterize international cooperation (Keohane 1984).
For simplicity, we do not endogenize NGO behavior. This can be easily done
by adding an extra stage to the game, wherein the NGO would select a moni-
toring effort M ∈ [0, 1]. This effort would be interpreted as the probability that
the NGO is able to actually observe success and failure. This extension of the
model does not add anything to the qualitative results, so we relegate it to the
Appendix.
In our main model, we assume that domestic publics cannot identify whose
fault a putative cooperation failure is. Below, we also examine a variant of
the model in which NGOs can blame specific states for cooperation failure.
10 It is also technically necessary because if the cooperation cost was simply c Ė2 , the only
i
equilibrium of this cooperation subgame would be zero cooperation by both states. To avoid this
implausible and uninteresting outcome, we allow the cooperation cost to be somewhat lower.
11 As shown below, this technical assumption ensures that the equilibrium is interior. Our main
results would hold without this limitation, but the exposition would be cumbersome.
This variant leaves the main results unchanged, but it also produces additional
empirical implications for why states might disagree on NGO participation
in some circumstances. Intuitively, states that incur a low compliance cost
will support NGO participation, as they can shift the blame for cooperation
failure on to other states, whereas states burdened by high compliance costs
are hostile to NGO access.
Expected payof fs The payoff to state i can now be summarized as follows. If

at least one state says ‘no’ to NGO participation, we obtain

U i0 = E A E B + Ei − c · Ei2 + L ρ 0 , (1)
where ρ 0 is a constant that must equal E∗A E∗B in equilibrium. This payoff
comprises the cooperation payoff, E A E B + Ei − c · Ei2 , and the legitimacy
payoff with NGO participation, L(ρ 0 ).
If both states say ‘yes’ to NGO participation, we have
U i1 = E A E B + Ei − c · Ei2 + E A E B · L(1). (2)
Note in particular that with NGO participation, the probability of cooperation

success, E A E B , can be influenced by each state. This is the only difference to
the payoff without NGO participation.
3.2 Equilibrium
This is a model of complete information, so our solution concept is the

subgame-perfect equilibrium. An equilibrium of the game comprises cooper-
ation efforts E∗A , E∗B with and without NGO participation. Additionally, we
assume that each state will vote sincerely on NGO participation. For each state
i = A, B, the value Ei∗ must maximize expression 1 without NGO participation
and expression 2 with NGO participation.
Without NGO participation To solve the subgame without NGO participa-

tion, we have to solve for the optimal cooperation efforts E∗A , E∗B given that
the legitimacy of international cooperation cannot be influenced, ρ 0 = E∗A E∗B .
As shown in the Appendix, the best responses are
E∗j + 1
Ei = . (3)
2c
Intuitively, state i increases cooperation when state j selects a high cooperation
level. But the size of the effect decreases as the cooperation cost c increases.
The equilibrium cooperation levels are the following:
1
E∗A = E∗B = . (4)
2c − 1
Clearly, cooperation effort is strictly decreasing in the effort cost c. Given

legitimacy ρ 0 = (2c−1)
1
2 , each state i obtains the following total payoff:

c 1
+L . (5)
(2c − 1)2 (2c − 1)2
This payoff also decreases with effort cost c, for legitimacy is a strictly increas-
ing function of ρ 0 .
How are these equilibrium conditions to be interpreted? Most importantly,
states must deal with the following problem: even though legitimacy in the
eyes of domestic publics influences the cooperation payoff, states cannot
influence that legitimacy without NGO participation. The legitimacy of the
cooperation effort depends on the prior beliefs of the domestic publics, and so
belief updating is possible. Even if the states were to suddenly choose much
higher cooperation efforts than expected, the domestic publics would never
learn of this change. Thus, the states do not have incentives to increase their
cooperation any further.
With NGO participation Suppose now that the states have allowed NGO
participation. In this case, legitimacy L will be L(1) when cooperation succeeds
and L(0) = 0 otherwise. We obtain the equilibrium levels of cooperation
effort,
1
E∗A = E∗B = , (6)
2c − 1 − L(1)
an interior solution given that we have assumed 2c − 2 < L(1). Clearly, the
equilibrium efforts are higher than in the absence of NGO monitoring. Thus,
the probability of successful cooperation, E∗A E∗B , is also higher than in the
absence of NGO monitoring.
This analysis reveals the multiple benefits of NGO monitoring. First, each
state has a stronger incentive to cooperate, because it expects that the NGO
will be able to reveal to the domestic publics information regarding the success
or failure of international cooperation. Second, if state i increases cooperation,
so does state j, because cooperation is a joint effort. Thus, NGO monitoring
not only allows each state to influence the legitimacy of the cooperation effort
(itself a notable benefit) but also mitigate free-rider problems in international
cooperation (another important benefit).
Using these equilibrium efforts, we can also provide an explicit characteri-
zation of the payoff to either state i:
c
. (7)
(2c − 1 − L(1))2
This expression is decreasing in the effort cost c and increasing in the value of
full legitimacy, L(1).
Decision on NGO participation How should states decide on NGO partic-

ipation? Since the model is symmetric, each state i benefits from NGO partici-
pation if and only if the other state j also benefits. Thus, it suffices to compare
payoffs 5 and 7. If the former is higher, both states say ‘no.’ If the latter is
higher, both states say ‘yes.’ In the following sections, we will characterize this
decision in greater detail. The proofs for the following propositions are found
in the Appendix.
3.3 Results: Legitimacy and NGO Participation
We now detail the theoretical and empirical implications of the monitoring-

legitimacy nexus for NGO participation in international cooperation as a
monitor. We demonstrate that while international cooperation unambiguously
increases under NGO monitoring, the total benefits and costs to states depend
also on the logic of legitimacy. In particular, we will show that the critical issue
is how legitimate international cooperation is in the ‘black box’ without NGO
monitoring. If such legitimacy is high, states may decide not to allow NGO
participation. But if such legitimacy is low, they need the NGO to legitimate
the cooperation effort.
Proposition 1 The positive ef fect of NGO participation on equilibrium cooper-

ation levels E∗A , E∗B increases with the full legitimacy value L(1).
NGO participation unambiguously increases cooperation. The difference

increases in the full legitimacy value L(1), as shown in Fig. 1. When the
value of perfect legitimacy, L(1), as reported by the NGO monitor, grows,
each state has an incentive to cooperate more to achieve it. By contrast, the
expected legitimacy without NGO monitoring, ρ 0 , does not influence levels of
cooperation. The reason is that states cannot increase it by cooperation more,
as no independent verification of cooperation efforts is present.
Fig. 1 The positive effect of EA*,

NGO monitoring on
cooperation efforts is strictly EB*
increasing in the full
legitimacy payoff L(1)
L(1)
Based on this effect, one may intuitively expect that the payoffs to the two
states will also increase. The payoff difference between NGO monitoring and
lack thereof is

1 1 1
c − −L . (8)
(1 − 2c − L(1))2 (2c − 1)2 (2c − 1)2
This expression is increasing in the full legitimacy
payoff, L(1), but decreasing
1
in the expected legitimacy payoff, L (2c−1)2 , without NGO monitoring.
Under NGO participation, with some probability the two states will achieve
full legitimacy, as the NGO will reveal information on the success or failure of
cooperation. But without NGO participation, the external audiences remain in
the dark, and so only the expected probability of success is relevant for them.
Based on these observations, how can we characterize the decision to allow
NGO monitoring? Two things are noteworthy here. First, note that the first
2 − (2c−1)2 , does not depend at all
1 1
part of the payoff difference, c (1−2c−L(1))
on the expected legitimacy without NGO monitoring. It is an unambiguously
positive expression that decreases with the cooperation cost c, as detailed in
the following section. Second, note that the expected legitimacy without NGO
monitoring is simply subtracted from this expression.
Substantively, the benefits of NGO monitoring depend on two factors. First,
how much does NGO monitoring increase cooperation? The value of this
effect depends on the full legitimacy payoff L(1) and the cost of cooperation
c. As either factor increases, so does the value of NGO monitoring. Second,
how legitimate is cooperation in the absence of NGO monitoring? As L(ρ 0 )
increases, the relative value of allowing NGO monitoring decreases. From this
perspective, it can be said that NGO monitoring is most valuable if legitimacy
features ‘increasing returns to scale,’ so that the low levels of legitimacy with-
out NGO monitoring produce few benefits for states while full legitimacy is
very valuable. By contrast, if the legitimacy value without NGO participation
is already high, the relative value of allowing NGO participation decreases.
Another way to understand this result is to consider state preferences for
publicity. If states are given the benefit of doubt by domestic audiences, they
may prefer not to allow NGO monitoring. After all, they will reap a handsome
legitimacy payoff simply by keeping the domestic audiences in the dark. But if
the public is very suspicious and demands evidence for successful cooperation,
NGO monitoring can be beneficial because it will (i) increase the incentive to
cooperate, thus alleviating free-rider problems, and (ii) possibly yield the full
legitimacy payoff.
These theoretical findings are empirically falsifiable. According to our
formal analysis, the state incentive to allow NGO participation depends on
two central determinants. First, how important is it that domestic publics
obtain credible evidence on successful cooperation? If this value is high,
NGO participation can legitimize monitoring. Second, how harmful is it when
activists ‘name and shame’ failed cooperation (Keck and Sikkink 1998)? Our
qualitative case studies illustrate the empirical relevance of such considerations
in two important instances of cooperation.
3.4 Results: Effort Cost and NGO Participation
In this section, we examine how the cost of cooperation effort conditions NGO
participation. To evaluate the effect of the cooperation effort cost on the merits
of NGO participation is complicated by the fact that the cost c influences
both the cooperation levels and the expected legitimacy ρ 0 . In this section,
we simplify the analysis by assuming that the expected legitimacy ρ 0 is a
locally linear function of legitimacy, such as α · 2c−1
1
, where α > 0 is a multiplier
indicating the sensitivity of legitimacy to beliefs regarding cooperation levels
in the absence of verifiable evidence.
Proposition 2 The positive ef fect of NGO participation on equilibrium cooper-

ation levels E∗A , E∗B decreases with the cooperation cost c.
Figure 2 illustrates this proposition. For low cooperation costs c, the oppor-
tunity to enhance legitimacy through cooperation can greatly increase each
state’s incentives for cooperation. But for high cooperation costs, exactly
the opposite is true, as increased benefits have little effect when high levels
of cooperation are very costly. Interestingly, NGO monitoring is the most
effective in circumstances such that cooperation is relatively easy to begin with.
One might have equally well conjectured that NGO monitoring is the most
valuable in difficult circumstances, but our formal analysis does not provide
analytical support for this competing hypothesis.
Expression 8 shows how NGO participation affects state payoffs. Again,
it is immediate that as the cooperation cost c increases, the benefits of
NGO participation decrease. Thus, the value of NGO participation decreases.
Fig. 2 The positive effect of EA*,

NGO monitoring on
cooperation efforts is strictly EB*
decreasing in the cooperation
cost c.
C
Consequently, NGO participation is most valuable when the cooperation ef-

fort cost is relatively low, so that changes in the value of cooperation will have
a large effect on the level of cooperation.
3.5 Model Variants
We have used a simple symmetric model to characterize the consequences

of NGO participation in the simplest possible fashion. How do our main
results change if we relax some of the key assumptions? In this section, we
explore four particularly important modifications. First, what if we consider an
asymmetric model? Second, what if one of the states can unilaterally decide
on NGO participation? Third, what if the NGO can reveal the identity of the
state that failed to cooperate? Finally, what if third parties can compensate
states for allowing NGO participation? The formal details of these extensions
can be found in the Appendix.
First, state asymmetry does not compromise any of our main results. While
states may now obtain different payoffs from cooperation, the basic insights
remain unchanged: NGO participation (i) induces states to cooperate more
due to reputational concerns and (ii) thus increases the expected probability
of success. This finding shows that our results do not depend on the symmetry
assumption. Of course, asymmetry implies that states may disagree on the
costs and benefits of NGO participation. However, the derivation of state
preferences remains qualitatively unchanged for either state.
Second, even if we allow asymmetry, unilateral participation decisions do
not compromise the theoretical argument. If one of the states, say state A,
can unilaterally decide on NGO participation, the only difference is that NGO
participation depends on the preferences of state A alone. Otherwise, the
theoretical argument holds: state A will allow NGO participation if and only if
the benefits of (i) increased cooperation and (ii) the possibility of maximizing
legitimacy exceed the costs of being exposed for compliance failure. This fact
proves particularly useful for the analysis of cases in which powerful states,
such as the United States, exert considerable influence on the form and nature
of cooperation. We are able to illustrate this finding in the study of the NGO
Early Warning System for the World Bank.
Third, it turns out that our model can incorporate the notion that NGOs
criticize particular states for compliance failure. In this case, state preferences
for NGO participation will depend to a great degree on their individual ability
to cooperate. If a state expects to cooperate, it may even benefit from the fact
that NGOs blame other, less cooperative states for project failure. Again, the
NGO Early Warning System of the World Bank will illustrate this extension.
Finally, introducing a third party that can compensate the states for al-
lowing NGO participation can change their initial decision, yet it does not
compromise the strategic logic of the analysis. If the states are reluctant to
allow NGO participation, an outsider could offer them a side payment such
as a concessionary loan. For example, this extension may shed light on why
developing countries often tolerate monitoring by foreign NGOs of World

Bank and other projects that could potentially draw negative publicity.
4 Case Studies
Our theoretical model has two primary empirical implications. First, it implies
that states support NGO monitoring when they expect substantial benefits
from an NGO “stamp of approval” on successful cooperation and have few
reasons to worry that they might fail to comply under NGO monitoring.
Second, it implies that states support NGO monitoring when they have a strong
interest in successful international cooperation.
To demonstrate the empirical relevance of our theory, we now apply it
to three cases. First, we examine NGO monitoring in the Kyoto Protocol to
the UN Framework Convention on Climate Change (UNFCCC). Consistent
with our theoretical predictions, states supported NGO monitoring only when
they were relatively interested in climate cooperation and expected to be
able to comply with the Kyoto Protocol. Second, we examine the US Early
Warning System for the World Bank. Given that the United States was a
key driver of environmental reform in the World Bank, and an unlikely
target for ‘naming and shaming,’ our theory implies that it should support
NGO monitoring. Finally, we examine the absence of NGO monitoring in
the Global Environment Facility (GEF). Given the acrimonious distributional
conflict between developed and developing countries, we would expect the
large developing country majority to oppose NGO monitoring. We chose
these three cases in view of two factors. First, they are comparable in several
ways: all are environmental, all occur in the late 1980s or 1990s, all involve
international institutions. Second, they offer variation in the independent
variables (cooperation interest, expected legitimacy benefits) across and within
cases.
4.1 The Kyoto Protocol
In 1992, the UNFCCC was signed at the Earth Summit in Rio de Janeiro.
Although the UNFCCC set targets for emissions reductions, they were non-
binding, and states soon began exploring the development of a more robust
means of combating climate change (Pew Center on Global Climate Change
2010). In 1995, negotiations began on what would become the Kyoto Protocol.
NGOs were involved in the Kyoto process from its beginning, as “formally
accredited observers” (Gulbrandsen and Andresen 2004, 59). NGOs were
also formally allied with specific states: several environmental NGOs “helped
the Alliance of Small Island States (AOSIS) with policy advice and scientific
backup in the climate negotiations” and lawyers from one NGO, FIELD,
“frequently obtained accreditation as members of small islands delegations”
(Gulbrandsen and Andresen 2004, 60). The pre-2000 pilot phase of the treaty
included a provision for the use of third-party auditors, including environmental
NGOs, in establishing the base-line emissions upon which signatories’ future

emissions allowances would be based (Woerdman 2000). As negotiations
entered their final phase in the late 1990s, an increasingly contentious issue
among states was the stringency of the treaty’s emissions targets and the role
of NGOs in monitoring compliance with those targets.
We predict in Proposition 1 that states support NGO monitoring when
they expect substantial benefits from cooperation, and are therefore seeking
to ensure compliance or signal the legitimacy of their efforts to domestic
audiences. At the same time, we note in Proposition 2 that the incentives
towards monitoring are inverse to the costs of cooperation. Thus, the first step
of the analysis is to investigate state preferences regarding the importance
of climate cooperation and the states’ costs of compliance. Due to space
constraints, it is impossible to discuss the preferences of every state involved in
the protocol. Instead, this case will discuss three key actors: the US, EU, and
Russia. These actors’ policy positions helped define the Kyoto negotiations;
moreover these states also represent a sampling of regime types, in that the US
and EU were very democratic, while Russia was significantly less democratic.
The EU was strongly supportive of efforts to reduce climate change and
was generally in favor of strong compliance mechanisms (Gulbrandsen and
Andresen 2004; cf. Depledge 2008). The EU was already working with NGOs
in the context of the European Climate Change Protocol (ECCP), the EU’s
‘in-house’ program to meet its Kyoto targets (Hovi et al. 2003). Given the
EU’s early investment in reducing climate change, it had a strong incentive
to reduce free-ridership, inducing other states to match its level of investment.
At the same time, its early investments meant that the EU faced relatively
low compliance costs. Unsurprisingly, the EU favored NGO involvement in
climate change monitoring.
The United States was also initially a strong supporter of the Kyoto treaty.
During the Clinton administration, the US had favored strong, global action
on climate change. Strong compliance mechanisms would support US envi-
ronmental goals. American democracy also played a role: a successful treaty
would legitimate the US effort in the eyes of American environmentalists, who
had been key Clinton supporters. Thus full legitimacy was very valuable to
the Clinton administration. The US was initially in favor of a legally binding
approach to emissions targets and put pressure on other states to accept them
(Hovi et al. 2003; Gulbrandsen and Andresen 2004). Our model indicates in
Proposition 1 that NGO involvement in monitoring increases the likelihood of
compliance and helps signal success to domestic audiences, and that incentives
for monitoring are especially high when full legitimacy is very valuable. In
keeping with this prediction, we find that during the Clinton administration
the US favored an open, publicly accessible compliance mechanism that would
allow NGOs to participate in monitoring.
Significantly, after the election of George W. Bush to the US presidency
the US position shifted (Nordhaus 2001; O’Neill and Oppenheimer 2002). The
US government adopted a much more skeptical posture towards the treaty,
focusing on the potential economic costs of US compliance, which appealed
to the political base of the party now in power. In essence, with a change in
the dominant domestic party, the US calculation of compliance costs changed.
Proposition 2 indicates that states facing high compliance costs or that are
otherwise likely to defect will resist NGO monitoring. After Bush’s election,
the US became much less supportive of strong compliance mechanisms and
ceased to support a compliance mechanism that would allow third-party
monitoring (Gulbrandsen and Andresen 2004). Later the US defected from
the negotiations, announcing in March 2001 that the treaty was flawed and
that the US would not sign it in its current form (Hovi et al. 2003).
Russia also resisted legally binding consequences for failure to meet agreed
emissions targets (Gulbrandsen and Andresen 2004; cf Depledge 2008). It like-
wise opposed allowing NGO input in compliance monitoring (Gulbrandsen
and Andresen 2004). Russia’s initial resistance to binding targets may be
taken as an indicator of an intention to defect; in keeping with the model’s
predictions, a state intending to defect should oppose NGO involvement.
However, this is somewhat surprising in Russia’s case. The Kyoto emissions
targets were set based on 1990 emissions levels. 1990 represented the height of
Russia’s Soviet-era emissions, which decreased sharply as Russia’s economy
collapsed during the transition to capitalism in the 1990s. Therefore, there was
little likelihood that Russia would have trouble meeting the emissions targets
in either the short or medium term. Instead, it seems that the costs for Russia
were more than purely economic. Compliance itself signals some measure
of submission to an international regime. It seems likely that for Russia,
struggling with the loss of its superpower status, submitting to binding targets
and external monitoring may have had a distinct political cost. In accordance
with Proposition 2, these higher compliance costs decrease the perceived value
of NGO participation. At the same time, during the crucial period of the
compliance negotiations, Vladimir Putin had risen into power in Russia and
enjoyed significant domestic support. Proposition 1 notes that if a state is given
the benefit of the doubt by a domestic audience, they may prefer not to allow
NGO involvement, since the benefits, in terms of domestic signaling, are low.
Moreover, it seems plausible that states that are more autocratic, have less free
media, or weaker democratic structures may have lower interests in legitimacy
or receive lower legitimacy payoff from cooperation. Putin began centralizing
state power in Russia soon after coming to power in late 1999 and Russia
already had weak democratic structures.
The ultimate resolution of the compliance monitoring issue stemmed from
the role of the EU. US refusal to ratify the Kyoto treaty left the EU in
a position of leadership in the treaty negotiations (Hovi et al. 2003). As
noted, the EU faced low compliance costs and had strong incentives to reduce
free riding. Now it also faced significant legitimacy incentives. NGOs were
extremely active in many EU states, and the domestic populations of several
leading EU states were heavily engaged on environmental issues. A successful
treaty would validate EU leadership on global climate issues, whereas an
ineffectual one would threaten the EU’s credibility. Proposition 1 indicates
that such a cirmcumstance creates very strong incentives for monitoring.
Indeed, in spite of opposition from certain other states, including Russia,

the EU pushed for strong compliance mechanisms and a monitoring role for
NGOs. This position ultimately won out. The Marrakesh Accords, negotiated
in late 2001, gave NGOs a formal role in compliance monitoring. The Accords
specify that the “non-governmental organizations may submit relevant factual
and technical information” to the Compliance Committee; the two branches of
the committee are also permitted to “seek expert advice” in the performance
of their duties.12 When not prevented by confidentiality concerns, information
submitted to the committee will also be made public.13
The full impacts of NGO monitoring are as yet difficult to discern. Aspects
of the Kyoto regime continue to be amended, and difficulties in implementing
climate change agreements go far beyond the presence or absence of effective
monitoring. Nonetheless, NGOs are monitoring compliance with the Kyoto
targets (EurActiv 2007) and there is some evidence that this is improving
states’ adherence to the treaty. In 2006, for instance, NGOs monitored
European nations’ efforts to generate new national allocation plans, essentially
revised targets for carbon dioxide emissions tied to the EU’s Kyoto com-
mitments. NGOs shared their information with the European Commission,
prompting threats by the commission to bring non-compliant countries before
the European Court of Justice (Gulf Times 2006). NGOs have also been
involved in pressuring the British government to develop domestic law that
would facilitate its compliance with its Kyoto commitments (Environmental
News Service 2005). In the case of China, NGOs have publicly affirmed
government efforts to defend compliance mechanisms, increasing government
legitimacy (Xing et al. 2009). In short, NGO monitoring appears to be facil-
itating cooperation among signatory states, and increasing the legitimacy of
states choosing into the treaty. These dynamics accord with our theoretical
predictions.
4.2 World Bank, the United States, and the Early Warning System
In our second case study, we chart the development of the Early Warning
System that NGOs in the United States have used to monitor the World Bank.
In this case, the United States allowed NGO participation because it wanted
to (i) improve the environmental policies of the World Bank and secure
compliance by other states under NGO scrutiny and (ii) use NGO monitoring
to shift the blame for cooperation failure on to the actual defectors. As our
formal analysis indicates, the fact that the United States was willing to comply
with new World Bank environmental policies, while the American domestic
audience ascribed a high value to successful cooperation, prompted the United
States to allow substantial NGO monitoring.
12 UNFCCC 2001, Decision 24/CP.7, Section VIII

13 ibid.
Although the US has been a dominant player in the World Bank since
the institution’s inception, its power began to erode in the 1960s and 70s. As
the Bank expanded its focus to developing countries, more members joined
the Bank, and Bank staff became increasingly focused on maintaining good
relationships with these new members (Kapur et al. 1997, 14, 241, 588). At the
same time, US domestic politics prompted the US to reduce its funding to the
Bank, leading to a decrease in US voting power and influence (Gwin 1994).
As a result of both of these factors, the US had to contend with the potential
for defection by other Bank members, a potential realized in 1984 when other
members rejected US demands for a multilateral reduction in funding for the
Bank’s International Development Association (Kapur et al. 1997; Gwin 1994,
733–4).
Between 1988 and 1990, US pressure persuaded the Bank to create a raft of
new environmental regulations (Wade 1997; Rich 1994; see also Shihata 1991).
Successful implementation of these environmental policies were dependent
on both the Bank and its borrowers. In theory, borrowing nations requesting
new loans agreed that Bank-funded projects would conform to the Bank’s
environmental standards. In practice, the new environmental regulations were
often ignored or only loosely applied. Thus, in regard to our formal model,
US policymakers had good reasons to believe that environmental cooperation
under the auspices of the World Bank might fail in the absence of more
efficacious implementation monitoring. Moreover, lack of compliance was fre-
quently publicized by US NGOs and threatened to undermine the legitimacy
of the US environmental effort.
At the same time, the US had a strong interest in cooperation. In this
instance, successful cooperation would actually entail other actors’ adherence
to standards proposed by the US. Thus international cooperation would be a
means of reasserting US influence at the Bank even in the face of declining
structural leverage. In addition, US policymakers faced substantial domestic
pressure to improve government performance on environmental issues, largely
because of a growing environmental movement that had proved adept at gen-
erating media coverage for its key causes (cf. Wade 1997; Rich 1994). Elected
officials were particularly sensitive to such pressure. Successful international
collaboration, if reported to US domestic audiences, would improve the le-
gitimacy of the government’s environmental agenda. In these circumstances,
according to Proposition 1, states should show great willingness to allow NGO
participation. Moreover, Proposition 2 suggests that low cooperation costs
enhance state incentives for monitoring. Because the US was a Bank donor,
not a borrower, it was unlikely to ever be subject itself to the Bank’s environ-
mental regulations. Those countries that would be subject to the regulations
were developing countries with limited capacity to challenge the US’s position
at the Bank or, in most cases, its geopolitical interests. Therefore the cost of
unilaterally establishing NGO monitoring was, for the US, extremely low.
NGO monitoring of the Bank and its borrowers began in the late 1980s.
Washington-based environmental NGOs began meeting informally members
of the Working Group on Multilateral Institutions (WGMI), a closed-door
government body that gave instructions to the US Executive Director of the

World Bank. Activists involved with the WGMI soon realized that members of
this group needed additional information to effectively form positions on new
Bank projects and that it needed to get its information early in the project
cycle. In response, Larry Williams of the Sierra Club and David Wirth of
the NRDC proposed the Early Warning System legislation. The legislation
instructed the US Agency for International Development (USAID) to use
its then-extensive network of field staff to track multilateral development
projects and report publicly on their progress. The NGO efforts were initially
opposed by the US Treasury, which introduced competing legislation designed
to accomplish the same end. However, US lawmakers were unwilling to
support the measure without the support of the environmental NGOs, whose
members could be influential in Congressional elections. The Treasury efforts
were unsuccessful and shortly thereafter the NGO-authored EWS legislation
was introduced and passed. It became law in 1987 (Al-Jurf 2007). Per our
formal analysis, the United States chose to allow NGO participation in view
of improving the legitimacy of the World Bank environmental policy.
The EWS legislation helped prompt the formal involvement of NGOs in the
monitoring of Bank and borrower compliance with the Bank’s environmental
standards (Al-Jurf 2007). Beginning in 1990, USAID sponsored a regular
meeting of 20–30 NGOs, along with US government representatives from the
US Treasury, Environmental Protection Agency, State Department, and the
office of the US Executive Director of the World Bank (Bank Information
Center 2003; USAID 2001b). Regular meetings continue to the time of writing.
NGOs are not mere observers of the meeting; the meeting is co-chaired by
USAID and the Bank Information Center (BIC), a DC-based NGO that acts
as a clearing house for information, especially environmental information,
on the World Bank. The meetings facilitate NGO input into US policy; the
group discusses “proposed MDB projects with serious environmental or social
problems, outstanding Inspection Panel claims, proposed MDB organization
or policy changes” and influences the contents of the USAID’s ‘Early Warn-
ing List’ of environmentally problematic projects (Bank Information Center
2003). The system also has international ties: USAID shares its concerns with
other Bank member states, with whom it may act on areas of shared interest.
Both US and foreign NGOs are involved in the process (USAID 2001a, b).
NGO involvement in monitoring has enabled the US to pressure the Bank
and other state actors to comply with established environmental standards.
To name just a few examples, NGOs communicated to USAID problems
with the General Oil Spill Response Plan for the Chad-Cameroon Pipeline,
a major World Bank project in Africa. This enabled the US to successfully
lobby for “more detailed response plans” to be prepared earlier in the project
development process, when they could be subject to more thorough review and
scrutiny (USAID 2001a). NGOs used the Tuesday Group mechanism to make
the US aware of problems with the Bjugali dam in Uganda (Linaweaver 2002).
NGO monitoring also facilitated US opposition to the China Western Poverty
Reduction Project; after discussions with the US, China withdrew its request
for Bank funding of the most controversial portion of the project (Wade 2009).
In line with our theoretical expectations, NGO monitoring has in several cases
improved the environmental impacts of World Bank projects, despite the fact
that the recipients have proven prone to defection.
At the same time, NGO involvement has protected US legitimacy. NGOs
monitoring the implementation of the Bank’s environmental standards are
quick to note from whence failures in compliance arise. As a result, they deflect
blame from the US in those instances in which compliance failure stems from
the actions of other actors. For instance, the decision of the World Bank’s
board to continue funding for the Narmada Dam project in 1992, after the
project had been heavily criticized by a Bank-sponsored independent review,
prompted NGO outrage and full-page newspaper advertisements attacking
the Bank. An account of the decision by a prominent NGO leader, however,
absolved the US from responsibility by noting how the US Executive Director
opposed the Bank management’s motion, supported by India, to continue
the project (Udall 1998). While such blame shifting is not an element of the
baseline model that we presented in the main text, the analysis in the Appendix
shows that it can be readily incorporated into our theoretical argument.
4.3 Donors, NGOs, and the Global Environment Facility
The increasing environmental awareness of the 1980s also prompted the cre-
ation of a new multilateral structure, the Global Environment Facility (GEF),
to fund environmental preservation. Negotiations on the GEF began in late
1990 and were completed in late 1991. Seventeen countries, primarily from
the OECD, participated in the initial negotiations, although they were later
joined by an additional nine states.14 Together, these countries donated over
$1 billion to the fund (Global Environment Facility 2010). The initial agree-
ment called for a three year pilot phase, during which the GEF would focus
on green house gas emissions, ozone depletion, clean water, and biodiversity
(Global Environment Facility 2008).
NGOs sought a formal role in the GEF, with direct access to policymakers
(Reed 1993). Such a role would have enabled NGOs to monitor the compliance
of GEF states with the Facility’s stated mission. Environmental NGOs had
been active in circulating draft proposals for a new multilateral environmen-
tal facility in the late 1980s (Young 1999). DC-based NGOs in particular,
including some involved in the aforementioned Early Warning System, saw
themselves as the leaders in the monitoring and reform of international
institutions.
Initial planning for the GEF was delegated to the World Bank, which con-
sulted heavily with state governments (Streck 2001). As noted in the previous
14 Austria, Australia, Belgium, Brazil, Canada, China, Denmark, Egypt, Finland, France,
Germany, India, Indonesia, Italy, Japan, Mexico, Morocco, the Netherlands, Norway, Pakistan,
Spain, Sweden, Switzerland, Turkey, United Kingdom, and the United States (Reed 1993).
cases, our model predicts that states favor NGO monitoring when seeking to
reduce defection or free-ridership and to signal legitimacy to domestic audi-
ences. Within the GEF case, states were divided into two rough groups sharing
similar incentives and preferences: developing countries and industrialized
countries.
During the early 1990s, developing countries manifested frequent oppo-
sition to Northern efforts to attach environmental conditionalities to devel-
opment lending. Although they welcomed increased aid flows, they viewed
the pro-environmental conditions attached to such flows as barriers to de-
velopment and as highly hypocritical, given the environmental damage in-
dustrialized countries had wrought in the course of their own development
(Robinson 1992). As a result, developing countries had limited interest in
any cooperation that seemed to prioritize the environment over develop-
ment. Popular opinion in many developing countries seemed to favor the
prioritization of economic development. Any legitimacy gains derived from
successful international collaboration would be undermined by the appearance
of having placed international concerns over domestic interests. Moreover, a
number of the developing countries, including Egypt, Indonesia, and Morocco,
had autocratic governments. These domestic considerations had immediate
relevance for NGO monitoring: Proposition 1 indicates that states favor NGO
monitoring when states expect to benefit from positive publicity for their
cooperation efforts. This condition was not met in the case of the GEF.
Previous efforts to balance Northern interests on environmental issues
and Southern interests in development, such as the 1987 Brundtland report
commissioned by the United Nations or the UN’s Agenda 21, stressed that
conservation and development could occur side-by-side in the form of sus-
tainable development (United Nations 1997). In contrast, many environmental
NGOs opposed Western-style industrialization and often demonized develop-
ing country governments (Crossette 1992; Rich 1994). NGO monitoring might
limit developing countries’ capacity to defect from cooperative agreements by
prioritizing development over the environment. In short, the costs of cooper-
ation for developing countries was potentially very high. NGO involvement
would only magnify those costs. First, it would limit countries’ opportunities
to defect by redirecting environmental funds towards other economic devel-
opment projects. Second, it would potentially raise the GEF’s environmental
standards to reflect more extreme NGO positions, further limiting states’
latitude in their use of funds. As noted in Proposition 2, high cooperation costs
significantly decrease incentives for monitoring. Given the limited benefits of
improved legitimacy for most developing countries, as well as the high cost of
cooperation, our model predicts that the developing countries would oppose
NGO monitoring.
The offer of GEF money could itself be viewed as a form of side payment
that could induce developing countries to accept NGO monitoring. For such a
side payment to be effective, however, its benefits would have to sufficiently
outweigh the costs of monitoring. As noted, developing countries had little
endogenous incentive to accept monitoring and faced very high cooperation
costs. Therefore the side payments would have to be particularly high, a

difficult threshold to meet in the modestly funded pilot phase of the project.
Moreover, NGO monitoring presented something of a Catch-22. NGO in-
volvement could lead to additional pro-environment conditionalities, which
presumably would have applied to all GEF funds, including any additional
funds offered by the GEF to entice developing countries to agree to moni-
toring. Thus NGO monitoring itself would reduce the value of any proposed
side payments.
For industrialized countries, the GEF pilot represented a new venture
with uncertain outcomes. Industrialized countries, all of which were fully
democratic, were responding to domestic pressure by advancing an interna-
tional environmental agenda. In keeping with Proposition 1, this domestic
pressure would create a high value for full legitimacy which would favor NGO
monitoring. However, there was persistent evidence that their interlocutors in
developing countries were resistant to elements of that agenda. Thus there was
a high chance of defection by developing countries. In the event of cooperation
failure, the costs would be borne disproportionately by industrialized countries
because of their democratic institutions and the greater domestic political
interest in the environment in those states. Our model suggests that, in the case
of a failure of cooperation, NGO monitoring increases costs to the participants
because NGOs will signal failure to domestic audiences, damaging their repu-
tation. While NGO monitoring may increase the odds of compliance, if states
anticipate defection, NGO monitoring increases risk. Given the high likelihood
of developing country defection, our model predicts that industrialized states
might strategically avoid monitoring.
In keeping with our model, the member states not only failed to support a
formal role for NGOs; they explicitly excluded nongovernmental organizations
from involvement in key GEF activities (Reed 1993; Streck 2001). As a
result, NGOs were required to engage with the GEF primarily via their state
governments (Reed 1993). Although NGOs became very critical of the GEF,
they had no clearly identifiable impacts on the operation of the GEF during its
pilot phase (Reed 1993; Young 1999; Streck 2001).
5 Conclusion
States cooperate in the shadow of domestic politics, and their cooperation

choices are influenced by domestic political considerations. In this article, we
have argued that the need to legitimize international cooperation efforts in
the eyes of domestic audiences is an essential determinant of whether states
allow NGOs to monitor cooperation. On the one hand, our formal analysis
shows that NGO monitoring produces a double dividend for the concerned
states: not only does it put a stamp of approval on successful cooperation,
but it also allows states to increase cooperation levels by virtue of third
party monitoring. At the same time, we found that NGO monitoring also
carries a cost: should cooperation fail, activists will mobilize to tarnish state
reputations. These findings imply that states should be most likely to allow
NGO monitoring when (i) they have a strong interest in successful cooperation
and (ii) they are confident that they will be able to comply with their treaty
obligations. Somewhat surprisingly, we also found that the positive effect of
NGO monitoring on cooperation decreases with the initial cooperation cost:
while NGO monitors cannot solve very hard cooperation problems, they can
improve cooperation on many others.
These findings have important broader implications for research on NGO
participation in international politics. While we have maintained a sharp focus
on monitoring, there are good reasons to believe that many of the findings
apply to participation more broadly: attending negotiations, influencing do-
mestic preference formation, directly cooperating with states, and so on. Most
importantly, our findings underscore two important truths about NGO partic-
ipation. First, the fact that states can exclude NGOs from participating does
not imply that activists are powerless. As long as states expect to reap some
net benefits from NGO participation, they have incentives to allow it—even
if NGO access also carries a sovereignty cost or reputational risks. Second,
the likelihood and consequences of NGO participation depend on how it
shapes strategic interactions between the cooperating states. Even if the NGOs
themselves are unable to directly engage in policy formation, their presence
shapes states’ incentives. With multiple concerned states, NGO participation
may have different effects on different states, and these effects emerge from
potentially complex strategic adjustments.
The findings also open avenues for future research. In regard to theoretical
research, the model can be extended in several ways. Beyond the democratic-
autocratic dichotomy mentioned in this article, how do domestic political sys-
tems or institutions condition the legitimacy effects of NGO monitoring? What
if some NGOs oppose international cooperation? Can NGO participation also
influence bargaining, a stage that is strategically prior to implementation?
What if NGOs have incentives to disseminate inaccurate information? How
do states decide between NGO monitoring, centralized oversight procedures,
and alternative monitors such as the media? If states do allow NGO moni-
toring, what determines the extent of NGO access? These questions require a
concentrated theory building effort.
For empirical research, the model also provides a firm basis, as our case
studies illustrate. It can be used to investigate the probability of NGO access
in different international institutions, especially as it relates to policy imple-
mentation. The comparative statics imply that state preferences for or against
NGO monitoring should vary systematically depending on cooperation costs
and the expected effects of NGO monitoring on legitimacy. They also imply
that NGO monitoring should ceteris paribus increase cooperation between
states and enhance the legitimacy of such efforts in the eyes of domestic
audiences.
Acknowledgements We thank Mary Anne Borelli, Nora Keller, the anonymous reviewers, and
the editor of the Review of International Organizations for comments and advice.
Appendix
A. Mathematical Appendix: Equilibrium
To find the subgame-perfect equilibrium, consider first the cooperation levels

E∗A , E∗B without NGO monitoring. The cooperation effort of state i, Ei∗ , must
meet the first-order condition for the expected payoff given in expression 1:
E∗j + 1 = 2c · Ei , (9)
where j = i. The left side measures the benefits from increased cooperation
effort (depending on how much the other state cooperates), whereas the right
side measures the marginal cost of additional cooperation effort. Recall that
c > 1 by assumption. This linear system of two equations has two endogenous
variables, so the interior solution is unique. It is provided in expression 4 in the
main text.
Suppose now NGO monitoring is allowed. Each state i selects cooperation
efforts to meet the following first-order condition for expression 2:
E j · (1 + L(1)) + 1 = 2c · Ei . (10)
Most importantly, the payoff from cooperation increases relative to the base-
line case without NGO participation. Again, the linear system of two equations
has two endogenous variables, so the interior solution is unique. It is given in
expression 6 in the main text.
1
Proof of Proposition 1 The equilibrium levels of cooperation are 2c−1
without
1
NGO monitoring and 2c−1−L(1) with it, so the difference is
L(1)
, (11)
(2c − 1 − L(1)) · (2c − 1)
an unambiguously positive expression: realistically, cooperation always in-
creases under NGO scrutiny. Differentiation with respect to L(1) yields a
strictly positive expression.

Proof of Proposition 2 Recall that expression 11 is strictly positive. Differen-

tiating with respect to c yields a strictly negative expression.

B. Mathematical Appendix: Extensions
In this mathematical appendix, we demonstrate that our main results are ro-
bust to plausible variations in model assumptions. We do so by first developing
a general, asymmetric version of the model and showing that our main results
remain unchanged. We then explore variants of this asymmetric model to show
that our main finding regarding the effect of the legitimacy payoff L(1) on
NGO participation is fully robust.
Asymmetric States
A substantively plausible generalization of the model is to allow asymmetric

cooperation costs across states. This can be attained by replacing the common
coefficient c with specific coefficients c A , c B > 1. Note that this model is fully
general, and it subsumes the symmetric model.
The equilibrium solutions 4 and 6 with and with NGO participation, re-
(1+2c )(1+L)
spectively, are now replaced by expressions Ei∗ = 4c1 c2 −1j and Ei∗ = 4c1 cj 2 −1
1+2c
(by choice of parameters that ensure an interior equilibrium). With a strictly

positive value of L(1), equilibrium cooperation is strictly higher under NGO
participation.
Consider next the effect of varying L(1). If L(1) is high enough, we have
E∗A , E∗B → 1, so it follows that each state obtains a higher payoff. Thus, as long
as the legitimacy payoff L(1) is high enough, states allow NGO participation.
It follows that our main result continues to hold in the asymmetric variant of
the model.
Unilateral Participation Allowance
Consider the general asymmetric model but suppose that state A can unilat-
erally decide on NGO participation prior to the cooperation subgame. The
cooperation subgame remains unchanged, and so do the payoffs to state A.
Thus, state A says ‘yes’ to NGO participation if and only if it obtains a higher
payoff under NGO participation than otherwise. As shown in the previous
subsection, this must be the case as long as L(1) is high enough.
Identif iable Defectors
Consider the general asymmetric model but suppose the external publics can
identify whose cooperation failed. Thus, the legitimacy L is only a function of
state i’s own success or failure. Now the legitimacy payoff to state i remains at
ρ 0 without NGO participation. With NGO participation, the probability of the
full legitimacy payoff is exactly Ei while the probability of zero legitimacy is
1 − Ei . Clearly, each state i has a higher best response to any given E∗j , where
j = i, under NGO participation than otherwise. The strictly increasing best
responses imply that both states select higher cooperation levels under NGO
participation.
Regardless of E∗j , state i obtains the maximal legitimacy payoff L(1) with
probability Ei∗ . Thus, as long as Ei∗ is high enough, because the cooperation
cost coefficient ci is low enough and L(1) is high enough, the probability of the
zero legitimacy payoff for state i is negligible. Consequently, even if the other
state j fails to cooperate, state i will not be blamed for the failure.
Endogenous Participation
Consider the general asymmetric model but suppose that if states A, B say
‘yes’ to NGO participation, the NGO must pay a cost P > 0 to participate.
Suppose the payoff for the NGO from participation is some strictly increasing
function V(E A E B ), so that the NGO prefers to maximize cooperation between
the states.
Note first that the cooperation subgame is again, with and without the NGO,
unchanged from the original cooperation subgame. Suppose now both states
have said ‘yes,’ so that the NGO must decide on participation. If it rejects, its
payoff is V(E0A E0B )2 , where E0A , E0B denote the equilibrium cooperation levels
without NGO participation. If it accepts, its payoff is V(E1A E1B ), where E1A , E1B
denote the equilibrium cooperation levels under NGO participation. With
E1A , E1B > E0A , E0B , the cooperation subgame payoff to the NGO is higher
under participation. Thus, the NGO participates if and only if the payoff
difference exceeds the cost P.
Consider now the initial participation decisions by the states. If NGO
participation benefits the states, as low as the cost P is long enough, a Pareto-
efficient subgame-perfect equilibrium exists, whereby states A, B say ‘yes’ and
the NGO accepts. If NGO participation harms the states, in any subgame-
perfect equilibrium of the game at least one state says ‘no.’ When P is high
enough, the NGO never participates, and no equilibrium of the game allows
NGO participation.
General Functional Forms
Consider the general asymmetric model but suppose that the cooperation
payoff to state i is K(E A E B ), where K is an increasing and strictly concave
function such that K (0) → ∞. Suppose the cooperation cost is C(Ei ), where
C (0) = 0 and C (1) → ∞. Without NGO participation, in equilibrium we
must have
K (E∗A K∗B ) = C (Ei ). (12)
Since both states benefit from cooperation, we select the highest equilibrium
E∗A = E∗B that exists.
Under NGO participation, we have instead
K (E∗A K∗B ) + E∗A E∗B · L(1) = C (Ei ). (13)
Given that the best responses have positive slopes everywhere, it is immediate
that the cooperation levels must increase relative to the case without NGO
participation. Thus, as long as L(1) is high enough, the payoffs to both states
must also increase.
Endogenous Revelation Ef fort
Let us now suppose that while states select cooperation efforts E A , E B , the
NGO simultaneously selects a monitoring effort M ∈ [0, 1]. Suppose the cost
of monitoring M is m(M), where M is an increasing and strictly convex
function such that m (0) = 0 and m (1) → ∞. Suppose M is interpreted as the
probability that the NGO obtains hard evidence about the success or failure
of cooperation that can therefore be provided to the domestic publics for
considerations. Suppose the NGO benefits from providing this evidence: if it
obtains hard evidence, it obtains a payoff of 1.
Based on these assumptions, the NGO selects the monitoring M∗ such that
m (M∗ ) = 1. Given this monitoring level, states understand that with probabil-

ity M∗ , their legitimacy payoff is either L(0) or L(1), depending on failure

or success, respectively. With probability 1 − M∗ , their legitimacy payoff is
a constant. Thus, the states maximize a convex combination of payoffs with
and without NGO participation (asymmetric variants of expression 1 and 2),
with weights 1 − M∗ and M∗ , respectively. Thus, as M∗ increases, so does
the incentive to cooperate by the resulting first-order conditions. Given that
the case without NGO participation is equivalent to M∗ = 0, the main results
continue to hold. Similarly, as long as L(1) is high enough, states allow NGO
participation.
Compensation for NGO Participation
Suppose each state i = A, B obtains a bonus B > 0 if NGO participation is

allowed in equilibrium. The model is otherwise unchanged except that the
marginal payoff from allowing NGO participation must be strictly less than
−B for NGO monitoring not to occur in equilibrium.
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Rev Int Organ (2012) 7:1–32

NGO monitoring and the legitimacy of international

Christopher L. Pallas · Johannes Urpelainen

Received: 30 December 2010 / Revised: 8 May 2011 / Accepted: 11 May 2011 /

Abstract States often invite NGOs to monitor international cooperation. Un-

Keywords Non-governmental organizations · International cooperation ·

(ii) how NGO participation influences state behavior in cooperative policy

2 International Cooperation and NGO Monitoring

In this article, we examine the role of NGOs in international cooperation

Our argument can be summarized as follows. If states allow NGO partic-

audiences. If the NGOs are perceived as credible, such information will

In our model, states i = A, B engage in international cooperation. Their

Sequence of moves The game is played as follows:

9 We assume c > 1 to ensure that the equilibrium is interior.

of initially negative costs is unconventional, but it is realistic because many

Expected payof fs The payoff to state i can now be summarized as follows. If

U i1 = E A E B + Ei − c · Ei2 + E A E B · L(1). (2)

Note in particular that with NGO participation, the probability of cooperation

This is a model of complete information, so our solution concept is the

Without NGO participation To solve the subgame without NGO participa-

Clearly, cooperation effort is strictly decreasing in the effort cost c. Given

Decision on NGO participation How should states decide on NGO partic-

3.3 Results: Legitimacy and NGO Participation

We now detail the theoretical and empirical implications of the monitoring-

Proposition 1 The positive ef fect of NGO participation on equilibrium cooper-

NGO participation unambiguously increases cooperation. The difference

Fig. 1 The positive effect of EA*,

3.4 Results: Effort Cost and NGO Participation

Proposition 2 The positive ef fect of NGO participation on equilibrium cooper-

Fig. 2 The positive effect of EA*,

Consequently, NGO participation is most valuable when the cooperation ef-

3.5 Model Variants

We have used a simple symmetric model to characterize the consequences

developing countries often tolerate monitoring by foreign NGOs of World

4.1 The Kyoto Protocol

NGOs, in establishing the base-line emissions upon which signatories’ future

Indeed, in spite of opposition from certain other states, including Russia,

12 UNFCCC 2001, Decision 24/CP.7, Section VIII

government body that gave instructions to the US Executive Director of the

4.3 Donors, NGOs, and the Global Environment Facility

costs. Therefore the side payments would have to be particularly high, a

States cooperate in the shadow of domestic politics, and their cooperation

A. Mathematical Appendix: Equilibrium

To find the subgame-perfect equilibrium, consider first the cooperation levels

Proof of Proposition 2 Recall that expression 11 is strictly positive. Differen-

B. Mathematical Appendix: Extensions

A substantively plausible generalization of the model is to allow asymmetric

(by choice of parameters that ensure an interior equilibrium). With a strictly

Unilateral Participation Allowance

Identif iable Defectors

General Functional Forms

K (E∗A K∗B ) = C (Ei ). (12)

K (E∗A K∗B ) + E∗A E∗B · L(1) = C (Ei ). (13)

Endogenous Revelation Ef fort

ity M∗ , their legitimacy payoff is either L(0) or L(1), depending on failure

Compensation for NGO Participation

Suppose each state i = A, B obtains a bonus B > 0 if NGO participation is

Vous aimerez peut-être aussi

K (E∗A K∗B ) = C (Ei ). (12)

K (E∗A K∗B ) + E∗A E∗B · L(1) = C (Ei ). (13)