Edited by Jan Klabbers and Åsa Wallendahl
Chapter 5: Financing International Institutions
Thordis Ingadóttir INTRODUCTION Financing of international institutions is a subject of vast dimensions. And the thrusting issues are not about nickel and dime, and proper house-keeping. What is ultimately at stake is independence and function of international organizations: to what extent do finances control the constitutional mandates of international organizations? The battle is waged on two fronts: firstly, between member states, often with different interests and agendas; and secondly, between member states and organizations, the latter being independent entities in the international arena, while not enjoying financial autonomy. While international organizations have transformed into active international actors, benefiting from a generous functional approach, cheered by own institutions such as the International Court of Justice (ICJ) and European Court of Justice (ECJ), member states have used financing channels to hold tight control. No agenda, whether relating to core mandate or not, whether enjoying overwhelming support or not, can be implemented without proper funding. Member states are still bestowed with the power of the purse, both as organizations’ ultimate budget authority, and as their principal providers. In an environment of majority voting and few avenues of challenge and accountability, financing has served as a major control mechanism by member states. Indeed, the history of international organizations is marked by debate on financing. During their early days, the debate on the budget was marked by arguments whether international organizations should be mere conference machines and consulting places or whether they should be active actors engaged in various activities (Stoessinger, 1964: 5–7)...
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