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Linking Policy Networks and Conflict Resolution Capacities of International Governmental Organizations: The Case of the World Bank in the Balkans
Anna Ohanyan
International Studies Association
Introduction
The extent of institutional autonomy that the international organizations possess vis-à-vis the states, is a widely debated issue within the academic community. On the one hand, it has been argued that institutions can facilitate the resolution of coordination and collaboration problems in the world polity if they are properly designed and operated (Keohane, McGinnis and Ostrom, 1993; Haas, Keohane and Levy, 1993). This approach alludes to certain level of institutional independence that the organizations may have, which increases the scope of operations that the policy makers have in the face of power structures. Realists argue that the institutional designs reflect the distribution of power and national interests and that the collaboration within institutions will wither away in the conditions of zero-sum games (Emerson and Ordeshook, 1993).
This research focuses on the conflict management capacities of international financial institutions to posit that the assessment of the scope of institutional autonomy in shaping the international politics is contingent upon the institutional designs external to the international institutions. By using network modeling this research shows the value of institutional changes external to the organization, which inform the institutional identity-state preferences debate. The purpose in this study is not to argue one way or the other. Instead, it aims to expand the policy making context of international policy making, to prepare stronger grounds in exploring issues on how the institutions shape state preferences, if at all; how far does the institutional identity and autonomy of the institution extend. In other words, the research proposes new sets of questions, such as the investigation of linkages between the international organizations; how those linkages are used to generate policy impact? In this regard, policy networks are considered not only new policy implementation avenues, but also multiple layers of decision-making, which makes them less susceptible to state control.
The network governance has been recognized as a modern characteristic of current polity (Marsh, 1998), although the existing literature on network analysis does not provide answers on how the networks shape policy outcomes, which would drastically increase the analytical utility of this framework. Unfortunately, both realist and liberal accounts of network analysis are still in their infancy partly because the network analysis has been carried out by the managerial theories, which are state centric by their nature and are geared toward domestic context. This research is an attempt to examine the network analysis in the international arena, which hopefully will expand the debate on the degree of institutional autonomy of international organizations by incorporating the institutional changes external to the international organization.
The second rationale for examining network governance in conflict region is the recent change in the discourse of conflict management. Specifically, increasing number of analysts and practitioners come to acknowledge the importance of integrated conflict resolution strategies that will concurrently employ economic and political tactics of conflict management (Vayrynen (1997). Aside from proposing economic solutions to the management of conflicts, the current discourse increasingly accentuates the economic causes of ethnic strife (Woodward, 1995a; 1995b; Kaldor, 1998), which further raises the issue of organizational fitness of international economic/financial institutions to engage in conflict regions. Echoing Vayrynen (1997) concerning the role of international financial institutions in the conflict regions Reinicke(1996) suggests that conflict management assessments need to be built into the policies and projects of the World Bank to make sure that funds and loans dispersed in conflict region do not have a negative effect on the conflict dynamics by creating asymmetries in the region. By acknowledging the significance of the economic aspect of the intervention in this paper I support the institutional changes necessary to facilitate the direct engagement of financial institutions in conflict regions. However, while Reinicke (1996) underscores the institutional changes internal to the organization, i.e. the World Bank, my research takes a different route by examining the network governance as an institutional change external to the organization. Specifically, I examine how by network mobilization the international financial institutions, in this case the World Bank, adapt with a formation of a new issue areas without conducting major structural changes within their organization.
The first section of the paper provides a brief literature review of policy networks and situates this study in that framework. This section is followed by a discussion on a rationale of the network analysis as an intellectual enterprise in relation to conflict management strategies of international financial institutions in a rapidly changing external environment characterized by the following factors: changed dynamics of international conflict and its transformation from inter-state to inter state forms of expression (Miall, Ramsbotham and Woodhouse, 1999); patterns of uneven economic integration and political fragmentation resulted from it and their impact on the conflict dynamics; and lastly, the dilemma of international organizations face between their state constituencies and their institutional identity.
The empirical section of the paper is composed of a case study that illuminates World Bank engagement in the Balkans. In this section the network analysis is applied to examine the types of policy networks that the World Bank either mobilizes itself or participates in a less direct format. A discussion on the types of policy networks mobilized for conflict management in the Balkans is conducted with a strong emphasis on the relations between the network structure and the policy outcomes. Based on the different types of networks mobilized and policy outcomes achieved as a result of it, the paper distinguished between micro and macro levels of intervention to elucidate the institutional changes that occur as a result of interventions in conflict regions.
In sum, the paper acknowledges the power arrangements that influence the policy making in the conflict regions. However, it also highlights the predominance of international institutions in creating the implementation structures, which, although being circumscribed by power arrangements, may guide the conflict management processes in ways not accounted by the major powers. It is these implementation structures of policy making in conflict regions that concerns this work.
1. Policy Networks as a Framework of Analysis
The conceptualization of policy networks rests on three major sources of literature: American, British and European (Marsh, 1998). The definitions of networks vary from one source to another. They differ by the focus on network structure versus member relations, frequency of the interactions between the actors, by the degree of institutionalization, patterns of resource dependence, etc. In an effort to categorize the diverse conceptualizations of policy networks Borzel (1998) identifies two major schools of thought: interest mediation school, fostered by the British and American analysts, and governance school, constructed predominantly by German theorists. In the first case the networks are conceived as a model of state/society relations in a given issue area. In the governance school networks are considered as alternative forms of governance to hierarchy and market. As it appears, the first mode of conceptualization is more state centric, and its utility of application in the international relations is limited compare to governance school of thought.
Governance school suggests that the networks operate as governance structures to an extent that they mobilize political resources in situations where these resources are widely dispersed between public and private actors. This research argues that policy networks in conflict region provide policy structures that cut across organizational boundaries and specialized issue domains (political intervention versus economic development), which provide more integrated strategies of conflict management and link political management of the conflict with molding economic opportunity structures. I argue that in the conflict regions the policy networks indeed deploy dispersed resources of various kind and function in a governance capacity, as the state capacities are weakened and the mismatch between the state and national identities is politicized.
March and Olsen (1998) argued that the governance structures worldwide are in a process of transformations, which, in the conflict region, is particularly drastic.
Internal (as well as external) processes of differentiation are making the state "centerless" or multicentered. Ethnic, religious, linguistic, regional, functional, and class identities have created solidarities that do not coincide with nation-state boundaries (946).
Thus, the state authority structures create governance vacuum internally, which is the reason of eruption of strife of the first place. The governance crisis expressed externally reflects in the non-sustainable bargaining outcomes, because the state authorities cease to represent the majority of the citizenry. Therefore, network governance deserves a closer examination to design more effective interventions strategies, as it creates an institutional setting that allows to mobilize variety of actors in a particular conflict stage. In sum, in the condition of weakened state capacities the conflict management processes become jeopardized. Therefore, for the bargaining and negotiating processes to sustain alternative outlets need to be sought and network governance needs to be cultivated.
With the risk of simplifying the existing body of literature concerning the policy networks it is possible to distinguish two main categories of policy networks: issue networks (Heclo, 1978; Jordan, 1990) and policy communities (Richardson and Jordan, 1979). The issue networks are defined as an aggregation of "issue skilled policy activists" drawn from conventional interest groups and sections of the government, together with academia and certain professions. Unlike policy communities, issue networks focus primarily on the policy making within a specific issue area, which may not necessarily fit into single organizational boundaries. Policy communities are distinguished with interdependency between the actors from public and private sectors (Reinicke, 1999) that stand out from other communities with their resource dependencies (Keck and Sikkink, 1998). Compare to issue networks policy communities place a significant stress on organizational component of network formation and operation.
As the empirical section of the paper will demonstrate both of these network types are observed in the policy making in conflict region, as they support micro and macro levels of intervention. At this point it suffices to say that the network analysis captures the policy making in conflict regions, which expands a focus of analysis from mere structures of international organizations and national governments. Moreover, the focus on international organizations and governmental agencies limits the possible intervention designs available to the policy makers. I argue that the interactions between the involved actors translate into range of policy outcomes that need a closer examination.
Marsh (1998) claims that the network analysis is a meso level theory and that to enhance the practical and theoretical utility it should be linked to macro level theoretical frameworks. In the context of theorizing on networks in the international relations situating this model in realist and liberal perspectives will be a particularly fruitful enterprise.
The lack of study between policy networks and the policy outcomes generated has been pointed out as a void in this emerging theoretical realm. In contextualizing the networks in the international arena the membership of the network becomes a central factor influencing the policy outcomes. Depending on an issue area and the geographical locality this composition is subject to change, so is the policy outcome. I argue that depending on the membership of the network and the structure of resource dependency two policy outcomes may emerge. First, in case if the networks depend on national government either for financial support or any other type of resource that is critical for network maintenance, the network becomes more susceptible to state preferences in the policy making processes. Thus, in this case the realist approach to conceptualize the networks holds true. Second, in the case if the network (1) is financially sustainable and does not relay on the financial input from national governments and international organizations and (3) is contingent upon non-governmental actors for implementation of policy designs, then the network has more chances of institutional autonomy that it would be in the first case. While the first case, so called "realist networks", will tend to reflect the national interests, the second case is an instance of "liberalist networks", where the international organizations have more flexibility to use the networks as a means to develop their institutional identity. As it appears in linking the network analysis to realism or liberalism the membership and resource-dependency structures of the network serve as intermediating variables. In the literature of network analysis linking network membership to its policy outcomes is known as a model of interest group intermediation (Marsh and Rhodes, 1992), which serves as a basis for this attempt to reconstruct the network analysis in realist and liberalist perspectives.
Thus, the network mobilization, which is an institutional change external to the international organizations, expands the international policy making environment, which should be taken into account in the debate on state preferences and institutional autonomy of international organizations.
2. Policy Network Approach in the Study of the Conflict Management Capacities of International Organizations
To justify the application of network analysis in investigating the conflict management capacities of international governmental organizations, this section touches on some of the recent political and economic changes in the international arena that challenge the hierarchic and state centric design of international governmental organizations.
2.1. Changed Dynamics of International Conflict
Miall, Ramsbotham and Woodhouse (19999) have argued about the localization of international conflict and its transformation form inter-state to intra-state forms of expression. The 70% of international violence after the World War II is civil strife. Interestingly, the international organizations, which are most actively involved in dealing with ethnic strife are the international organizations, have been conceived in a bi-polar structure and were designed to address the inter-state clashes of interests (Archer, 1983). Therefore, it is not surprising that at times the international organization demonstrate inadequacy in dealing with sub-state level violence, as it was the case of UN inaction in Rwanda. Lack of political voice allocated to ethnic groups and absence of legitimate feedback channels between ethnic groups and international community is one of the major factors that challenges the conflict management capacities of international organizations. Moreover, the increase of nationalism and revival of national identity seem to question the assumption inherent in the functional theory of international organization (Mitrany, 1975) according to which the promotion of welfare can become an indirect approach to the prevention of warfare (Claude, 1968). Therefore, linking the network analysis to the functional theories of international organizations allows to look beyond state level analysis of conflict and search for mechanisms of delivery of public goods that go beyond the state level. This is not to say that ethnic units that do not possess statehood are deprived of foreign assistance or international projects designed to alleviate poverty or deal with other issues of socio-economic nature. Those projects indeed are in place, but their delivery is conducted through strong partnerships with non-governmental organizations. These partnerships, which make up policy networks of various density, offer horizontal governance structures characterized with flexibility, openness and responsiveness to the local levels of politics, which makes them appealing policy structures for the international organizations.
2.2. Globalization and ethnic conflicts
Equally important is the argument that the conflict management capacities of international organizations are challenged by the interaction effect between the economic and political factors in causing ethnic violence, which questions the effectiveness of institutional specialization between international organizations.
The intertwined nature of economic and political factors that cause ethnic strife are exacerbated by the forces of globalization. Globalization (Rodrick, 1997) intensifies social tensions within the countries, which due to embedded outlets of ethnic violence, transform themselves into ethnic rather than social conflict. Thus, the politics of globalization is by no means monolithic. It is a process that cuts across state actors, mobilizes local beneficiaries and constituencies, which are not always represented through state structures only. Thus, by working with state actors in an attempt to provide counter-measures against North-South economic disparities the international organizations miss number of intervention channels that go beyond formal state structures. The effects of globalization in the local sub-state levels should be addressed to result effective conflict management strategies. Again, the choices of international organizations to access the sub-state level of economic levels are limited. Employing public policy networks is one of the few choices that international organizations possess.
Fortunately, the discourse of conflict management increasingly tends to acknowledge the economic forced in the political dynamics of ethnic conflicts. So called integrated models of conflict management are being discussed (Vayrynen, 1997), which argue about situating the political interventions in a supportive economic context. Unfortunately, a design of institutional structures that would support those proposals has not been addressed sufficiently. This is yet another factor to highlight the role of network analysis in the policy making of conflict regions, as the networks provide discourse forums and allow policy diffusion between political and economic institutions.
Also, globalization coupled with liberalization of economies, advancement of communication technologies and localization of international conflict challenge the concept of sovereignty and governance structures of national scope. Referring to Scharpf (1993) Borzel (1998) argues that as hierarchical co-ordination becomes increasingly impossible in interactions across sectoral organizational and national borders, actors have to rely on horizontal self-coordination within networks, which then can serve as a functional equivalent to hierarchy. Thus, hierarchical designs of international organizations become another obstacle for effective policy designs in conflict management to an extent that their membership is state based. In intra-state conflict scenarios power imbalances between the conflict parties of intra-state wars are perpetuated by unequal access to statehood. In this regard, the horizontal governance and bargaining structures of the networks represent an institutional asset for constructive conflict management processes. The conflict management of the majority of ethnic conflicts occurs in the bargaining structures that are characterized by power imbalances. In other words, the governmental/formal/state centric instruments of bargaining are hierarchic by their design, which is counterproductive for effective conflict management processes. On the contrary, the policy networks are horizontal governance structures, which cam counterbalance power asymmetries by providing additional channels of influence beyond the formal structures (Benz, 1992). Policy networks expand the policy making domain of conflict regions and provide non-governmental routes of intervention. This is an institutional asset for the conflict management practitioners, which begs for a more careful investigation in the face of economic globalization and political fragmentation.
2.3. Institutional Dilemma of International Organizations
Providing a framework to address the institutional dilemma of international organizations is the third contribution of policy network analysis. Sato (1996) notes that constituent interests of the member states on the one hand, and the dynamism inherent in the nature of international organizations on the another hand represent two opposite forces that international organizations finds themselves trapped. Along these lines Archer (1983) identifies three basic roles that international organizations plays: an instrument for the member states to promote their interests, an arena of deliberation and an actor, in this case the international organization is considered as an independent entity and demonstrates its own patterns of institutional change. In this regard, one could argue that Satos (1996) argument about the inherent dilemma of international governmental organizations is based on the conflicting roles of the IGO as an instrument and as an actor. That conflict intensifies in the face of the rapidly changing external environment of international organizations, as the new pressing issues, which do not always fall within the constitutional boundaries of the IGO, signify the IGOs as an actor rather than an instrument. As a result the institutional identity of the organizations at times clashes with their primary mandate charted by the member states. Despite the legal/constitutional rigidity of the core decision making bodies of IGOs (for instance, the Executive Board of the World Bank,), in the "peripheries", (for instances regional offices or lower levels of decision making such as Post-Conflict Unit of the World Bank) they demonstrate flexibility and various degrees of responsiveness to external change (Ascher 1989).
In reference to the World Bank Ascher (1989) argues that despite the lack of decision making power the staff of the World Bank demonstrates high level of institutional autonomy in various stages of policy cycles of the Bank.
Haas (1990) differentiated between adaptation and learning patterns of changing strategies that the international organizations develop. While learning refers to the questioning of the primary organizational mandate, adaptation is framed as incremental institutional change, which does not necessarily lead to dismay of the primary objectives of the organizations. Network mobilization by the international governmental organizations becomes an instrument of adaptation to the changing external environment of the world system, as they do not lead to abolition of the primary mandates of the international organizations. Most of the international organizations (particularly those that do not directly deal with security issues) mediate the aforementioned dilemma (instrument versus actor) by mobilizing organizational and issue policy networks, which allows them to reconcile their evolving institutional identity with the rigid legal underpinnings of their primary design, which is an adaptation strategy. The subsequent sections of this paper will more extensively address the types of policy networks deployed by the international governmental organizations and show the links between the structure of those networks and the outcomes they generate. At this point it suffices to say that policy networks become coping strategies for international organizations in dealing with new problem areas, which in number of cases fall outside of their constitutional mission. Thus, I assert that it is the interaction among the international organizations and other agencies that allows the former to cope with the changed external context without compromising their primary policy objectives.
3. Theories Applied: World Bank Interventions and Policy Networks
The link between network structures and policy outcomes can best be captured by identifying the types of networks that international organizations engage in the conflict regions. Since the World Bank is the subject of this research, I narrowed down my analysis to the content of various projects that the Bank initiated in the Balkans. For analytical purposes these projects and programs are categorized as micro and macro levels of intervention, which are differentiated by the following factors.
3.1. Types of Actors
In its engagement in the Balkans the Bank enters into various interactions with different actors, which vary by their political status, political clout, their financial capabilities, so called institutional distance from the grass roots and the degree of formality of their governance structures. Specifically, the involvement of the Bank is carried out through establishing partnerships with various non-governmental organizations from the West, governmental representatives from the West, other international organizations, diplomats and other political figures of regional and international significance. In this regard, the micro level intervention is characterized with strong grass roots involvement and partnerships with various non-governmental agencies and community groups. The macro level intervention lends itself through partnerships between governmental circles (both from the donor community and from the conflict parties), other financial institutions and international governmental organizations, diplomats and other actors with a significant political clout and financial might.
3.2.The Content of the Intervention Design.
By the content of intervention design the involvement of the Bank can be classified as economic and political. Despite offering an analytical distinction between these factors, I do not downplay their interrelation. In many instances to be discussed later economic incentives are employed for political purposes. The links between the economic and political determinants and possible strategies of conflict management are given, and it is not the purpose of this research to debate it or provide supporting evidence. What is more interesting is the extent of institutional separation of structures that support political and economic strategies of conflict management. Whether or not the formation of those institutions and policy networks is concurrent? How and when should those networks be utilized to have a maximum impact on the conflict dynamics? How does the World Bank, a financial institution, assist with the mobilization of political networks? Lastly, how those networks relate to the economic and political determinants of the conflict?
The micro level of intervention tends to depart from projects that are purely political in nature and focuses on economic projects of reconstruction, infrastructure development, soldier demobilization, etc. This intervention level draws strongly from the economic structures of conflict containment.
It is an undeniable fact that economic component of intervention can also be part of a macro level intervention packages, which have been used as incentives and "carrots" to halt the conflict. Some examples will be provided in the next section. At this point let us turn to the next distinguishing factor of macro- and micro- levels of intervention that increases the precision of this typology of interventions
3.3.The Policy Cycle.
The macro level is more frequently used for policy formulation in the conflict regions, the micro level is utilized for implementation purposes. Both avenues of intervention make up a continuous chain of policy making, because the micro level intervention of the World Bank is linked to intergovernmental negotiations between western states and the Balkans countries, which, due to their formal structures of discourse, represent the macro level intervention. In most of the cases the macro level intervention and policy formulation precedes micro level intervention and implementation of projects, as the political decisions and major loans and other forms of financial aid made to the worrying parties are necessary for the policies to be implemented on the ground. Although the distinction between these two levels of intervention is blurring, their analytical differentiation is important in order to capture the institutional changes that accompany the intervention strategies of the West and financial institutions in particular. More importantly, the analytical distinction between these two levels of intervention is necessary for sound management of the conflict through mobilization of various types of policy networks in different levels of intervention. After presenting some examples of World Bank involvement in the Balkans I will conclude this paper by examining the types of networks mobilized in various intervention levels and will sketch out some of the functions that these policy networks perform. Lastly, these levels of intervention offer different policy structures, which must be used more effectively to have constructive impact on the conflict cycle and prevent escalation of the conflict as a result of the interventions of the West.
Below is a figure that summarizes this section and illustrates ink between the levels of intervention and the network structures. This is a factor essential in examining the policy outcomes.
Figure 1. Levels of intervention and network characteristics.
Types of Actors: Network Membership | Content of Intervention Design: | Functional Use of the Network | |
Micro level | Grass roots, NGOs, community groups, IGOs | Predominantly economic | Predominantly policy formulation |
Macro level | Governmental agencies, IGOs | Predominantly political | Predominantly policy implementation |
4. Policy Networks on the Ground: the Case of the World Bank Engagement in Balkans
This section is primarily descriptive and aims: to investigate the nature of the World Bank interventions in terms of actors targeted, scope of projects (political versus economic) and the patterns of institutionalization. These factors are determinants for examining the types of networks deployed in micro and macro levels of intervention. Therefore, this section will prepare the groundwork for a debate on the role of networks in enhancing the conflict management capacities of international organizations and enriching the policy-making processes in conflict regions.
4.1. Macro-Level Intervention
In this research I have claimed that the macro level intervention of the bank materializes through issue networks, which are defined as "issue skilled policy activists" drawn from the conventional interest groups and sections of the government, academia and certain professions. However, due to the lack of empirical materials pertaining to the decision making processes that occur between the World Bank representatives and the Western powers my analysis of issue networks deployed at this level of intervention can be challenged. It suffices to say that the intervention of the Bank and the rest of the above mentioned actors results from frequent and consistent policy deliberations between their respective "policy activists", which do not translate into any types of institutionalized linkages between these actors, which are characteristics of issue networks.
Employing positive and negative economic incentives in the management of Balkan conflict is not new. However, Vayrynen (1997) argues that those interventions had very little effect on conflict mitigation. The first promises and threats against the parties in conflict in Bosnia-Herzegovina were made in 1991. During the second half of 1991 the international community, specifically, the European Community and the United States exercised a more comprehensive economic sanctions on former Yugoslavia. In April of 1992 the sanctions were lifted except for those against Serbia.
Another instance of deploying economic sanctions in the Balkans are the economic incentives offered to Croatia in April of 1994 with a purpose to gain support from the Washington Agreements, which created the Muslim-Croat federation in Bosnia. This particular negotiation forum was strongly supported by the World Bank and IMF, which approved $128 million and $192 million loans respectively. The funds were allocated to Croatia, which later on was threatened with economic sanctions by the United States in case of disrespect to Bosnias sovereignty.
Vayrynen (1997) suggests that these efforts of conflict management in the Balkans produced political results in Croatia. However, it is critical to highlight that the "political results" and policy success can not be used interchangeably in this context, as defining success in the management of conflict is an issue contingent upon frames of reference to the particular political context. While, for instance, cease-fire after a prolonged violence may be considered as a successful outcome, it by no means is a guarantee of constructive conflict management. In this particular case, I would argue that the efforts of the Western powers did not go further than stopping the violence between the parties, which of course, is a significant political accomplishment. However, the employment of economic incentives for political management purposes did not result the outcomes that it was designed for. I argue that the impact of those interventions would be enhanced if the delivery mechanisms of the funds was designed in a way to diffuse short term political management of the process with the long term economic development, rather than consider the economic mechanisms as means to achieve political goals. Provision of the funds to Bosnia-Herzegovina was conducted with a hope to generate economic integration and break the cycle of violence. While the cycle of violence was stopped temporarily, the economic integration was not achieved. Vayrynen (1997) point out that the Muslim-Croat Federation set up fifteen member Reconstruction Cabinet and a Coordination Board to administer the funds allocated by the Bank. Interestingly, the Serb Republic has established its own Reconstruction Agency for the appliance of the funds. It is important to highlight the fact that one of the objectives in using economic incentives to manage the conflict was to generate economic integration within the region. However, as it appeared from the formation of separate institutions set up by Muslim-Croat Federation and Serb Republic the policy making in the region became more politicized and polarized that it should in case if a different intervention design was applied.
Specifically, the types of participating actors were not diverse, which blocked any alternative channels of policy making that could create a supportive context. The subsequent discussion of micro level analysis will elucidate this argument in a greater detail. It suffices to say that the diversity of network membership is conducive to creating multiple levels of dependence with the ethnic groups at conflict, as each participating member is linked with a different sub-group in among conflict parties. Subsequently, this factor has the potential to hinder coalition building across ethnic lines, hence, to depolarize the policy-making processes in the region. Deploying finances allocated by the World Bank and the IMF was delivered through weak and not encompassing partnerships and policy networks. The funds were allocated to the governmental circles only, which was the most politicized route available. Establishment of separate institutions by the conflict parties to use the provided finances is a good support for this claim. Moreover, not only the networks created in this macro level intervention in Bosnia-Herzegovina were very narrow by their institutional scope, but also the links between the financial institutions and Western powers as network parties were not well developed. The implementation of the projects was conducted in a policy environment, characterized by high level of inter agency specialization without any inter-agency policy diffusion to take place. In other words, the involvement of international financial institutions by allocations of the funds was not matched with socio-political measures to ensure a maximum impact for their intervention.
Vayrnen (1997) asserts that political conditionality to the funds should be attached, which would create the necessary political context for the economic incentives to be effective. Matching the political and military measures with the economic ones in the implementation process is a necessary element of integration approach, which in this case was missing. However, I would argue that political conditionality alone would not assure an enhanced policy impact on the ground. Diverse and encompassing networks in the implementation process are the ones crucial to the success of intervention. Networks, which are limited by the actors involved, are conducive to top-down sources of social change and underestimate the significance of bottom up sources of social change. Visa versa, networks that are encompassing and diverse in terms of the actors involved, are more conducive to bottom up process of social change as they are closer to the grass roots level and contingent upon participation of variety of groups. Therefore, the number of participating actors is higher, so is their stake in the outcomes of the process. Moreover, more encompassing networks, both at the macro and micro levels of intervention, are conducive to feedback and are more flexible, as the higher number of actors involved presents different implementation structures, which diffuses the implementation process across individual, community and governmental levels of policy making. Lastly, the broader the diversity of organizational representation in the network and the types of linkages between those organizations, the higher the problem solving capacities of the network will be. As it appears from the review of the conflict management processes in the Balkans provided by Vayrynen (1997) the involvement of the World Bank in this region was limited to providing the loans to the conflict parties. In other words, the World Bank by no means was deploying networks or managing them actively. Its participation in this process was reactive, rather than proactive, which I mainly connect with the internal organizational changes of the Bank. Therefore, before discussing the micro level intervention and the institutional structures supporting them it I proceed to examine the internal organizational structure of the Bank and its institutional identity when it comes to interventions in conflict regions.
4.2.The World Bank and Its Policy Making in Conflict Regions
Although initially the World Bank was formed for the purposes to reconstruct the Europe after the WW2, its institutional identity largely departed from reconstruction objectives in war thorn societies. Reconstruction of Europe was followed by a combat of poverty and social development in the developing world. I this realm, the trickle-down effect of economic growth was supported by lending operations that favored infrastructure development, investments in transportation and petroleum production (Merhaeghe, 1985; Haas, 1993). Later on these programs were subordinated to "human needs approach" with McNamaras accepting of the post of the President. These programs were designed to directly reach those strata of population that were not benefiting from infrastructural lending. These programs prioritized agriculture and rural development (Meerhaeghe, 1985), nutrition, land reform, family planning, housing, education and other related issues of social development. Currently the World Bank is in the process of incorporating environmental assessment into lending operations (Haas, 1993; Reinicke, 1996). Considering the Banks conflict region involvement in retrospect it is tempting to conclude that the Banks policies evolve to their primary mandate of post-war reconstruction. However, I would argue that the Bank rediscovers post-conflict reconstruction in a qualitatively new light by linking post-conflict involvement to social development and poverty reduction in those regions. Subsequently, the nature of intervention designs in conflict regions is drastically different from the ones proposed fifty years ago. Currently, more explicit stress on social development, institution and political capacity building is prevalent along with more assertive involvement in the political negotiations among the parties at war. While the Bank recognizes the conflict as a pressing problem, it frames the issue in the frameworks of social development, rather than recognizes as a problem of a separate category. The conflict is framed and treated as an obstacle for social development, which shapes the proposed intervention designs. In other words, the conflict is not recognized as a problem of a separate category, in which case the Bank would have to propose qualitatively new sets of interventions strategies, which may be politically more explicit and contradictory to the apolitical mandate of the Bank.
Conflicts have always been an inherent part of political, social, and economic change. Conflict can also present an opportunity to develop new social, political, and economic systems that can better serve the needs of a changing society. Promoting growth, equity, and inclusion to manage conflict before it erupts into violence is therefore a vital part of the Bank's development paradigm (World Bank, Post-Conflict Unit/Concepts, www.worldbank.org).
The intra-state conflict as a new problem area for the Bank is treated in the existing policy structures of the Bank without necessarily translating into internal organizational changes. According to Haas (1990) this pattern of organization change is a mere adaptation technique rather than a learning strategy. Since early 1990s till now the quality of the Bank involvement in conflict regions has been evolving rapidly. While in early 1990s, which was characterized by explosion of ethnic strife in the post Communist world, the involvement of the Bank was limited to macro- level. Specifically, the Bank in its engagement in the conflict regions tended to target the governmental actors only, which was assumed to be the only natural course of action due to its state-centered design. However, by the end of 1990s the Banks involvement in the conflict regions qualitatively changed by placing a stronger focus on the non-governmental actors both in the policy formulation and implementation processes. Currently the Bank acknowledges the importance of changing its intervention strategies in the conflict regions. In assessing the World Bank involvement in conflict regions Task Manager of the Post-Conflict Unit Nat Colletta and Michelle Cullen (1999) assert that the Bank currently is in the process of renegotiating its approaches to development in accord with the intervention designs in conflict regions. They go on to argue that one of the most important challenges to facilitate this process is the internal organizational culture of the Bank as a lending and developmental institution. They specifically highlight the need for re-socialization of the Bank staff, changes in techniques and values. Subsequently, Colletta and Cullen (1999) champion the need for increased communication and cooperation with government and civil society. As it appears these authors acknowledge the lack of institutional/structural fit between the policy objectives of the organization and their newly emerged policy objectives in conflict regions. While the lack of fit between the structure and new policy objectives is recognized within the Bank and among the researchers (Reinicke, 1996), the internal organizational change within the Bank was limited to the formation of Post-Conflict Unit in 1997. The formation of the Post-Conflict Unit was critical in terms of linking the conflict management networks. Moreover, the Bank became more active in its micro level intervention and mobilization of encompassing networks for two reasons. First, the Post-Conflict Unit with its Post-Conflict Fund provides finances for reconstruction projects in conflict region. Availability of seed money mobilizes structures, mainly partnerships with various NGOs. Secondly, the availability of Post-Conflict Unit opens up direct communication channels with the national governments of conflict regions. Post-Conflict Unit engages in knowledge management with other involved parties or provides technical expertise in case if a national government applies to this Unit for assistance in post-conflict reconstruction. To reiterate, with the formation of Post-Conflict Unit the involvement of the Bank transformed into different levels of policy making. The Post-Conflict Unit, as a specialized agency within the Bank, was able to establish and support various policy networks of conflict management and situate the international conflict management efforts in supportive economic structures. In sum, the Post-Conflict Unit facilitated the discourse and policy enactment in the realm of micro level intervention.
4.3. Micro-Level Intervention
The formation of Post-Conflict Unit within the World Bank resulted in two outcomes. First, by developing partnerships of an economic nature and targeting non-governmental actors in its policy formulation and implementation processes the Bank expanded the scope of micro-level intervention of international community in the Balkans, Democratic Republic of Congo, the West Bank and Gaza, Cambodia, Chad, Mozambique, Uganda, Azerbaijan, Liberia, Rwanda, Sierra Leone and other "hot spots" of the globe. The Banks engagement in these regions points out that a development of a qualitatively new pattern of intervention is in effect, which suggests that the organizational objectives of the Bank are transforming. Secondly, it highlights a whole new area of international intervention, which is not directly contingent upon the domestic politics of the donor countries. For instance, as Halverson (1996) suggests the intervention of the United States in the Balkans was highly dependent upon the domestic political culture of the country, the leadership style of the President and ability of the President to "sell" the intervention idea to his larger constituencies as beneficial for the national interests (Putnam, 199x). As a result, American policy in regards to Balkans "was reactive and concessive, following developments on the ground and progressively abandoning states objectives" (Halverson, 1996, 24). The resulted unstable policy context in the Balkans by no means was conducive to the constructive conflict management in the ground. In this regard, the design of a new intervention pattern by the World Bank creates new outlets of involvement which are relatively detached from the domestic contexts of the donor community and less susceptible to them. True, the World Bank involvement in the region is still contingent upon the political dynamics of intervention in the region. However, the formation of the Post-Conflict Unit allows to mobilize networks that are broader by their intervention scope and reach out to implementing actors that do not have the political visibility and clout, which at times becomes a factor that contributes to unstable and inconsistent intervention patterns.
The Post-Conflict Unit was formed to provide technical assistance, policy development and operational support to Bank staff and client governments, engage in knowledge-building and sharing within the Bank and in the wider development community, training and capacity-building within the Bank and developing partnerships within and outside the Bank (The World Bank, 1998). These policy objectives compose the micro-level intervention of the Bank, as for their implementation they target the grass-roots organizations, community groups and NGOs, specialized governmental agencies, banks and other private sector actors, etc. The micro-level intervention shapes a different set of policy structures compare to macro-level intervention, which will be discussed in a greater detail in the next section. The projects of this category include micro-enterprise development, infrastructure development, demobilization of soldiers, etc. The distinction between these two avenues of policy implementation in the conflict regions is central to capture the policy-making domain in conflict regions, which subsequently assists in designing conflict management models in those regions.
Examples of micro-level intervention of the Bank in conflict regions are two grants that the Bank allocated for the Balkans. In 1999 two grants under the Post-Conflict Fund totaling $2 million were approved by the World Bank for Albania. The first grant is implemented through an Italian NGO Communita di SantEgidio. It is designed to expand the schools, provide health centers, improve water supply and sanitation, finance transport, provide food for children, etc. The second grant of $1 million undertakes an extensive refugee support activities and assists in developing local NGOs. Another interesting project that was provided to the Balkans is the fund of $20.6 million, which was allocated to Bosnia Microcredit Bank. The purpose of this funding was to introduce microlending projects in Bosnia and Herzegovina. The project assumed the creation of specialized financial institution to oversee microcredit development in the country. The International Project Consult of Germany, Market Banka or BH Banka (both of Bosnia), European Union and International Finance Corporation are the major technical partners and shareholders of this particular project. Moreover, as a part of the World Banks efforts to support reconstruction, the government of Bosnia and Herzegovina and the Bank established the Local Initiatives Project aimed at promoting self-employment and microentrepreneurship. The project aims to develop microfinance institutions to provide credit and other business related services to low-income entrepreneurs (The World Bank, 1999).
As it was mentioned earlier the uniqueness of World Bank intervention in post-conflict regions is the deployment of economic measures, such as private sector development, which have a political significance. Employing economic policies in the conflict regions triggers economic development and decreases the possibilities of violence eruption. In January 24th, 2000 Micro Enterprise Bank (MEB), established out of the above-mentioned investments, is the first licensed bank in Kosovo. It started its operations in the region to provide account management, money transfers, loans and cashless payment transactions to micro and small enterprises as well as individuals (www.seerecon.org/PressReleases/2000/press0124.htm). Extending access to credit lines not only contributes to job creation, and jump starts the financial markets in the region, but also transforms those markets to cater the needs of the population, which mainly are in economically challenging conditions. The formation of MEB became possible with the partnerships among several international financial institutions, such as the European Bank of Reconstruction and Development, International Finance Corporation, Netherlandse Financierhings-Maatschappij voor Ontwikkelingslanden (FMO) and Internationale Mmicro Investitionen (IMI) and Kreditanstalk fur Wiederaufbau. Dutch and German governments have been critical in providing initial funding for this particular project. Interestingly, while the financial aspect of the project became possible thanks to the Western European governments, European Union and the World Bank, the initial organizational support was provided by the Internationale Projekt Consult (IPC), which has been working since August of 1999 to set up MEB. As it appears the formation of MEB was an outcome of mobilizing various types of resources - both financial, political and technical. The MEB is an example of policy network, since it is linked to the international financial institutions by the nature of its financial transactions. Commersbank, The Foundation for Enterprise Finance and Development, Nederlandse Finanierings-Maatschappij voor Ontwikkelingslandedn (FMO), Internationale Micro Investitionen (IMI), Micro Enterprise Bank of Bosnia (owned by EBRD (28.57%), IFC (28.57%, IMI (19.05%), FMO (14.29%), KfW (9.52%)) are the shareholders of Micro Enterprise Bank in Kosovo with 21.7%, 21.7%, 21.7%, 17.4%, 17.4% shares respectively. Moreover, both the Board of Directions and the Management includes representatives from the shareholder organizations. This particular arrangement allows not only financial support to the newly established bank, but also information sharing, capacity building, access to European markets, and most importantly, political clout that may ensure private sector involvement in investing in MEB of Kosovo. Both the financial arrangements linking MEB with international financial institutions as well as the organizational structure of MEB and the composition of its Board membership qualify this newly established organization as an institutional component of a policy network. All of the partners involved bring different types of resources to the table. Most importantly, the formation of MEB institutionalizes these partnerships and generates number of socio-economic and political outcomes that are conducive for the constructive management of the conflict in this particular region. Moreover, the network has a strong potential to grow and expand geographically, which will improve its outreach possibilities across the region. Specifically, currently the number of branches is 2, including the main branch in Pristina. The estimated number of branches in three years is seven, which not only will contribute to deepening of financial markets in the region, but also will facilitate the institutionalization of the network and expand the economic environment conducive to political management of the conflict.
In sum, the role of the World Bank micro level involvement in conflict regions includes but is not limited to:
As it appears from the project descriptions provided above the interventions in the micro level are fostered through establishment of organizational partnerships or policy networks among the World Bank and other agencies. Possessing significant amount of financial resources the World Bank not only enters into already existing organizational partnerships with other actors, but also facilitates the formation of those partnerships by allocating "seed money". Subsequently, this initial capital ("seed money) grows into larger projects and in certain cases translates into local institution-building as it is the case with microcredit development projects in Bosnia and Herzegovina.
5. Network Structures and Policy Outcomes
This section of the paper summarizes the network characteristics in the micro and macro levels of intervention and examines some of the functions that these networks perform in the conflict regions.
5.1. Macro-Level intervention
The intervention designs at the macro level offer negotiations structures supported by very loose links between the actors involved, which do not tend to institutionalize. This particular intervention level materializes through interactions between "issue-skilled" entrepreneurs (Heclo, 1979), mainly diplomats representing national governments and international organizations. In this regard the international organizations serve as forums and arenas of discourse, which is one of the major functions of the international organizations (Archer, 1983). Interestingly, the forum is not established within one organization, rather is expanded to include variety of actors. Thus, the unit of analysis is not the institutional structure (in this case of an international governmental organization), but rather interactions and links established between the actors. The most explicit policy outcome of these loose and informal partnerships between the international governmental organizations and national governments are the provision of less formal channels of discourse which allows maximum number of parties to join the discourse without having to face with the legal constraints of their primary missions.Another policy outcomes of issue networks that international community tends to deploy in Balkans is the increase of coordination of conflict management efforts of these agencies in the Balkans. The hierarchy characteristic to the international governmental organizations becomes problematic to establish coordination. Moreover, these hierarchical organizations are less prone to learning than horizontal ones. While these organizations do not depart from their hierarchic organizational structures and still cling to their primary operational mandates and political objectives of their constituencies, it does not prevent them to enter into networks and be part of more horizontal institutional interactions. This arrangement is an asset for bypassing coordination problems. Moreover, issue networks and their loose structures also allow these institutions to develop a common institutional/policy voice in regards to conflict parties in the Balkans.
Whether or not the issue networks that dominate the macro level intervention of international organizations in the Balkans are bargaining or problem solving in their nature is critical to understanding their policy impact achieved on the ground. The realist would argue that those networks are driven by the national interests of the intervening parties, which are motivated to bargain optimal solutions beneficial to their national interests. In other words, the issue networks that support the macro level intervention in the Balkans create discourse channels for the national governments to bargain their respective positions in this particular conflict, which further becomes the point of departure for the further policies implemented in the region.
However, one could also argue that the mobilization of these networks creates another layer of policy formulation, operation of which can not be accounted solely by the national interests of the involved actors. The interactions between those actors is the added value of the network in the conflict management processes, which enhances problem-solving capacities of the international organizations and other actors involved in the intervention design. In sum, the issue networks formed in the macro level intervention, compare to the policy communities of micro level intervention to be discussed below, are more politically driven, more formalized, more politically visible and less stable, prone to dissolution and less institutionalized.
Figure 2. Functions and Characteristics of Issue Networks in the Macro level of Intervention
Characteristics | Functions |
low level of institutionalization more politicized politically visible bargaining in nature susceptible to state preferences less stable prone to dissolution |
coordinate of conflict management efforts provide of discourse forums develop a common policy voice |
5.2. Micro-Level Intervention.
Compare to issue networks policy communities, defined as "interpenetrating organizations" (Jordan, 1990), tend to dominate the micro level of intervention. These policy communities are mobilized around IGOS, NGOs, national governments, religious organizations, and other actors. Compare to issue networks, policy communities, defined as "interpenetrating organizations", tend to be more formalized and institutionalized, which makes the outcome of their operation more tangible (joint projects, subcontracting, more formalized inter-institutional links). In the earlier presented case, the partnerships among European Union, the World Bank and other agencies translated into a formation of microcredit bank, which institutionalized the interactions between these actors and have placed them in a mutually dependent positions by making them shareholder of the established bank.
Aside from institution building in the local level, policy communities that support the microlevel interventions in the Balkans also create participation channels for the grass roots to take part in the conflict management processes. A new dimension to the identity of the citizens is added: that of entrepreneurs. The thesis of commercial pacifism that was put forth by Adam Smith and Joseph Schumpeter (Doyle, 1997) reinforced with the formation of microcredit projects. In this sense in engaging in microcredit projects the public indirectly participates and contributes to the conflict management in the region. Moreover, providing participation channels to the public these types of intervention designs increase the sense of ownership in the conflict management processes. Therefore, tapping into bottom up sources of social change is a key to constructive conflict management strategies.
The policy communities that support the micro levels of intervention perform in various capacities. First, by joining forces and efforts these policy communities are able to engage in knowledge management and join forces in dealing with ethnic strife. Specifically, by brining together variety of actors policy communities manage to treat political aspects of the issue in accord with the economic ones. These factor generates more comprehensive understanding of the process and increases the likelihood of more creative solutions in dealing with the conflict.
Secondly, the policy communities, problem solving by their nature, are flexible enough to engage in implementation processes, which other types of networks are not able to accomplish. The main support to this argument is grounded on a diverse membership of policy communities which goes beyond formal representation of national governance (as it was the case in issue networks) to include more diverse membership. Due to the institutional links that each member of policy community has with their constituent institution, they contribute with the policy making power of those institutions. Specifically, these networks provide multiple implementation structures because of their diverse membership.
Figure 2. Functions and Characteristics of Policy Communities in the Micro level of Intervention
Characteristics | Functions |
institutionalized clear inter-organizational boundaries economically tangible politically not visible problem solving mobile |
mold participation channels create implementation structures expand the IGO policy scope and develop its institutional identity |
In this section I have argued how resource dependencies within the network (financially sustainable or not), the membership nature (encompassing or not) and the level of institutionalization of the interactions between the actors yield to different policy outcomes. To increase the utility of the network analysis for the conflict management I have examined the specific functions that these networks perform. In terms of it theoretical value, this section adds to the debate pertaining to the state preferences versus institutional autonomy. Policy network analysis informs this debate by showing that the extent of influence that the state exercises on a specific issue area is highly contingent upon the network structure. Therefore, as the analysis of micro and macro levels of intervention suggest, the state has more control over the macro levels of policy making than it does in the micro level. Secondly, the effectiveness of the network in terms of supporting political and economic strategies of intervention is also contingent upon the network structure. As it appeared from this analysis, the policy communities are more potent in that regard due to their ability to draw from the policy making power of their members. However, the internal institutional changes that occur within the international organizations influences on their ability to use the policy networks effectively. While this research was primarily concerned with the institutional changes external to the international organizations, it by no means tried to downplay the significance of those changes internal to the organizations.
Conclusion
Zurn (1995) and Roseanu (1992), among many others argued about changing authority structures resulted from two major political developments in the international arena: globalization and unleashing market forces on the one hand, the end of the bi-polar power structure on the another hand. These factors changes the authority structures, weakened administrative capacities of the state, thus creating a void in the governance domain. By importing the network analysis - predominantly applied in the domestic context into the international relations I aimed to highlight a major political change that occurs concurrently with the weakening state: the network mobilization and their policy impact across various issue areas.
The theoretical implications of using network analysis to study international organizations is the argument that networks mediate the inherent dilemma of international organizations between following state preferences and developing their institutional identity. I have identified two scenarios contingent upon the network structures. First, state preferences take over in the networks and use those networks as yet another mechanism to advance their interests. Second, diversity and financial sustainability of the networks makes them less susceptible to state preferences, thus becoming an instrument for the international governmental organizations to cope with the changed context of world politics by expanding their intervention scope to new issue areas. In this regard, I concurred with Lachman and Wolfe (1997), who assess the organizational effectiveness by looking at the interactions between the organization and its external social environment. I pointed out that there is a gap between the changed patterns of international conflict and the state centric design of the international governmental organizations. This factor was the main reasoning for me to assert that network mobilization in conflict regions serves as a mechanism to complement the state-centric design of international organizations in dealing with intra-state patterns of international conflict.
The policy implications of the network analysis used in this research relate to emerging opportunities of facilitating network governance in order to political and economic strategies of conflict management within one framework. I have argued that despite the invigorated interest among the analysts and practitioners in using political tactics concurrently with economic measures, the institutional changes supporting those proposals have not been investigated. In this regard, I have examined the policy networks in the micro level to model a political intervention in a supportive economic context. Moreover, I highlighted the network formation in the policy making processes in conflict regions as an alternative governance muscle for the international community in managing ethnic conflicts.
The subsequent research agenda of this work is to accumulate more empirical material in the field of conflict management and contrast it with network mobilization in a different issue area. Comparative case studies of network governance will allow to capture more patterns and hence, will expand the theoretical and practical utility of the network analysis in the international arena.
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