The Future of UN Budgeting: Complexity and Prospect for Reform

Chapter 10 is an outlook to the ongoing reform of United Nations budgeting introduced by the new Secretary General António Guterres, in light of the theoretical and conceptual discussions as well as the empirical findings presented throughout the book. It shows how the theoretical dynamics and main topics identified throughout this book, and in particular in Chapter 5, affect reform discussions and reform dynamics. Whereas some reform is taking place, principal and agency complexity prevent a major overhaul of the system as the fragmentation of the UN system is hard to overcome, and because key member states or groups of member states are bound to lose influence, even if only over a few elements of micromanagement that have become part of the pathological budgeting dynamics in New York—a pathology that is much less driven by IO bureaucracy and much more by states and their complex, historically shaped interests.

Key Findings: Principal–Agent Complexity and Budgeting in the UN System

Chapter 9 combines insights from the datasets presented in Chapter 4 with the case studies in Chapters 5 to 8. A key insight is that present-day budgeting and resource decision-making, with segmented budgets and informal proceduralization, cannot be understood without considering complex interests of states and of other donors, and without paying attention to decentralized or otherwise fragmented IO bureaucracies. Methodologically, the chapter reflects on how insights from a comparative approach to UN and IO budgeting need to be combined within a systemic research perspective that looks at the UN system as a whole. Thus, the complex P–A model developed in this book both answers and raises questions for a better understanding of budgeting dynamics within IOs. In the final section, the chapter returns to foundational disciplines to discuss how the findings of the book contribute to the disciplines of political economy, public policy, international relations, and public administration.

The Historical Origins of UN System Budgeting

Chapter 3 introduces many of the topics of the book by tracing the evolution of UN system budgeting from the mid-nineteenth-century international unions, several of which are predecessor organizations of today’s UN specialized agencies, through the interwar League of Nations to the main geopolitical changes after World War II. This historical perspective demonstrates the continuity in some of the budgeting dynamics throughout more than a century. It shows how principal and agency complexity in the UN are based on early design decisions in the League of Nations. It highlights how voluntary funding of the League of Nation’s Health Organization looked similar to today’s financial support from the Bill & Melinda Gates Foundation, suggesting that principal complexity has always included actors beyond states. And the chapter explores how the complexity of the IO bureaucracy responsible for managing money and discord evolved from small, host-state supervised bureaucratic units to today’s major administrative operations.

Introduction: Budgeting in the UN System

This chapter introduces the main debates that this book contributes to and outlines how various disciplines—Public Administration and International Relations, Public Policy and Political Economy—look at budgeting, and, in particular, how these relate to the changing system of international cooperation and of international organizations. Scholars and practitioners alike question how far states still come together in today’s IOs to prioritize solutions for global challenges and whether states are able to provide sufficient and reliable resources for IOs to address these matters. Nowhere is this as visible as in budgeting dynamics of IOs. This is evidenced in the shifts that United Nations system budgeting has faced for more than seven decades, most notably the change to the increased importance of earmarked voluntary contributions in the financing of present-day UN organizations.

UNESCO: Between Sectoral Fragmentation and Budget Crisis

Chapter 7 examines the case of UNESCO and the effects of the sectoral and vertical fragmentation of the organization. The case is particularly pertinent since the US stopped its contributions after Palestine was admitted as a member in 2011, resulting in a major financial crisis for the organization. Despite the need for rigorous cutback management, budgeting procedures and budgeting administration have remained highly routinized. While this highlights the important procedural role of international bureaucrats and their ability to ensure the continued functioning of IOs, these solutions also show the limits to the substantive influence of international bureaucracies in budgeting. In essence, UNESCO remains an organization that is highly fragmented along policy lines, horizontally and vertically, and both among member states as well as inside its own bureaucracy. This results in budgetary segmentation and increased proceduralization well beyond the core budgeting stages regulated by formal rules.

ILO: Simple Procedures Despite a Tripartite Principal

Chapter 6 underlines the unique principal structure of the ILO, with 50 percent of seats in its Conference and its Governing Body assigned to national social partners, that is, workers’ and employers’ representatives. Against expectations, this complex principal constellation only has limited effects on proceduralization in the ILO; administrative decentralization of the organization and the growing shift to voluntary financing of technical assistance at field level are at least as important. Instead, there are typical instances of complex P–A constellations in the ILO that one also finds in other cases, such as the special role of the main contributing states in the budgeting procedures, a dynamic that is much more pronounced as a driver of principal complexity than the role of regional groups and of social partners.

Budgeting in the UN System: A Comparative Analysis

Chapter 4 constitutes the core comparative data chapter presenting two novel datasets. The first compares budgeting procedures in twenty-two UN organizations, with a focus on the actors involved and the timelines prescribed by formal rules and drawing also on previous analyses on UN budgeting from the 1980s and 2000s. The second dataset reveals, with few exceptions, a high level of routinization of budgeting procedures in the UN system. This finding is based on the analysis of the timing of budget proposals and budget adoptions in twenty of the twenty-two UN organizations included in the first dataset. Both the stability of budgeting procedures and the routinization of budgeting, even in times of a global financial crisis, run against theoretical expectations. Four organizations (UN, ILO, UNESCO, WHO) with highly routinized budgeting procedures are selected (studied individually in Chapters 5–8) to better understand the causal mechanism identified in the theoretical chapter.

WHO: Between Regional Principals and Philanthrolateralism

The case of the WHO reveals the largest discrepancy between key formal rules governing budgeting procedures and the reality of budgeting dynamics and administration. The highly regionalized and fragmented structure of the WHO results in a budget process that is much more complex in practice than formal rules suggest. To accommodate strong regional interests and regionally organized principals, while at the same time managing budget constraints, the WHO budget process combines bottom-up, top-down, and horizontal administrative and political coordination. Due to the increasing importance of earmarked voluntary contributions for the financing of the WHO to approximately 80 percent of its budget, including very substantive financial support from the Bill & Melinda Gates Foundation of around a quarter of its budget, new administrative structures and procedures have been introduced. For example, the Financing Dialogue has become a new element of budgeting in international organizations that attempts to regain control over an ever-more segmented budgetary landscape.

The UN Core: Micromanaging Principals and Segmented Budgets

In this first case study focused on (core) UN budgeting, the authors trace the evolution and setup of the extremely complex budget arrangements in the UN; the multiplication of budget procedures including regular budgeting, peacekeeping budgeting, special political missions’ budgeting, and budgeting in the many Funds and Programmes; and the resulting complex budgeting administration needed to navigate a highly complex principal–agent constellation. The analysis finds an extremely high degree of micro-management by member states as principals in the core UN budget process and an increasing segmentation of UN budgets and funds in recent decades that seem to be the direct result of complex principal constellations, but also, as in the case of peacekeeping budgeting, related to the UN bureaucracy’s interest in achieving a high degree of budgeting routinization.

Theory: Understanding Budgeting in International Organizations

Chapter 2 presents the theoretical contribution of the book as it seeks to go beyond recent discussions that consider either principal complexity or agency complexity as key drivers of organizational dynamics in international organizations. It also introduces the main outcomes of interest with regard to UN budgeting: proceduralization, routinization, and budgetary segmentation. By combining both types of complexity and by studying these outcomes, one can make predictions about the types of budgets to expect in international organizations; one can make assumptions about various dynamics of IO budgeting procedures; and one can understand how conflicts in international bureaucracies relate to disagreements amongst member states. This advances important conceptual and theoretical debates that started, in particular, with Hawkins et al.’s Delegation and Agency in International Organizations. It also enlarges a theoretical understanding of budgeting under complex principal–agent constellations more broadly.