The World Bank

The EU is collectively the largest donor to the World Bank, itself the prime multilateral development agency in the world. Yet, only EU MS are shareholders to the World Bank, and have seats at its Board. The Union is not a member and does not even have an observer status. The absence of legal standing may be the most evident reason why very little has been written on the EU’s role at the World Bank. Ambivalence in World Bank staff about the EU’s competence concerning development policies is, justifiably, patent (Baroncelli, 2009). Conversely, within the broader literature on the EU in multilateral institutions (Latikaainen and Smith, 2006; Jørgensen, 2009) a small but growing body of studies has focused on the role of the EU in the International Monetary Fund (IMF), where the EU has an observer status (Bini Smaghi, 2004 and 2009; Truman, 2006), plausibly favoured by the puzzle of a single currency union with multiple external representatives in monetary affairs. While some authors have analyzed the Bank jointly with the IMF (Woods and Lombardi, 2006; Faini and Grilli, 2004, 1), very few contributions have focused exclusively on the role of the EU at the Bank (Baroncelli, fortchoming). This contribution argues that there are in fact several reasons to take a closer look at what the EU does at the World Bank and with the World Bank, why it does it and, especially, how and how well it does it. First, the sheer weight of resources devoted by the EU to promote development and eradicate poverty, both bilaterally and through the World Bank, has grown remarkably since the late 1990s. Second, at around 33 per cent over total voting at the Bank’s Executive Board, the combined votes that EU member states can mobilize through the World Bank’s constituency system far outweighs either the weight of the US quota or the 15 per cent required to form a blocking minority. Third, progress has occurred since 2003, when an informal consultation group (Eurogroup) was set up to coordinate the position of EU EDs at the Board on matters of joint European interest. In spite of the upgraded status of the EU at the UNGA, there does not seem indication of similar developments at the World Bank. What are the main reasons behind such gap between devoted resources and delegated authority? How has informal coordination served as a substitute for an enhanced role of the Union at the World Bank’s Board so far? How has their cooperation proceeded on the ground, in the light of the relevant changes that have occurred in development policymaking since the launching of the MDGs in 2000? This chapter looks at these issues under both theoretical and policy lenses. In line with recent IR studies on organizational change, it is argued that both institutionalist and constructivist literatures have much to contribute to answer such questions, and that their inputs into delegation and role theory, respectively, can provide useful tools to analyze and conceptualize the overall set of relations between the Union and the Bank. Furthermore, based on new empirical evidence, this chapter contends that neither of the two approaches can fully account for the multiple processes that result from the interaction between the EU and World Bank systems, respectively. Inputs from multilevel governance and development literatures are then factored in towards a better understanding of the cooperation between the EU and the World Bank, as a case of interaction between large multilateral organizations with overlapping memberships.