Chapter 16: Rent seeking in international organizations
The chapter analyzes rent seeking by international organizations and through international organizations. Rent seeking by international organizations is more pervasive than rent seeking by national bureaucracies to the extent that the information cost of politicians and voters is higher but less pervasive to the extent that politicians have less to fear from international bureaucrats than from national bureaucrats. The chapter presents evidence that international organizations charge higher input prices, employ too large quantities of input and demand excessive budgets. Agency slippage is shown to increase with the number of member states. Rent seeking through international organizations is typical of private interest groups. Special interest groups are more powerful at the international than at the national level to the extent that the information cost of voters is higher and international bureaucrats are less controlled by politicians who want to be re-elected. The chapter presents evidence of the power of interest groups in international organizations. It concludes with a number of recommendations on how rent seeking by and through international organizations could be reduced.
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