Managing the Principal? How UN Development Agencies Push-Back Against Earmarking

It is widely acknowledged that the practice of earmarking voluntary contributions increases individual donors’ direct and indirect control over international organizations and circumvents multilateral governance. While assessed contributions can be understood as a delegation of authority, earmarking reduces organizations’ discretion in allocating and managing resources. In the UN development system, earmarking is particularly prominent. The share of overall resources that has a pre-defined purpose amounts to almost 80%, a majority of which being tightly restricted. The increase and shift in balance towards earmarked funding has been profoundly shaping the internal organization and functioning of most UN development agencies. UN development agencies are not only victims and passive recipients of earmarked funding. They use the discretion derived from delegation by multilateral principles as well as their authority to increase their leeway vis-à-vis bilateral principles. In this paper, we will show how UN agencies attempt to push back against what they perceive as detrimental funding practices and analyze the conditions for success. We will review and systematize push-back strategies across two UN funds and programs (UNDP, and UNICEF) and two specialized agencies (WHO, ILO) and use structural features (such as revenue stream, mandates, delegation, but also reputation and expertise) to explain differences in the success of their undertaking. Building on principal agent approaches as well as constructivist ideas about international bureaucracies’ agency, we will enrich the beginning academic debate about earmarked funding in the multilateral development system by highlighting the role of international bureaucracies / agents themselves.