Economic crises and the survival of international organizations

In: The review of international organizations

Abstract

AbstractHow do hard economic times affect countries' foreign policy and, specifically, their international commitments? Although a large body of literature assumes that economic crises lead to the prioritization of domestic politics at the expense of international cooperation, these claims are rarely subjected to systematic empirical tests. This study examines one important aspect of these relationships: the consequences of economic crises for the survival of international organizations (IOs), a question that attracted only scant scholarly attention to date. Theoretically, we argue that even though economic crises can weaken member states' commitment to IOs, they also underscore their ability to tackle the root causes of such crises and mitigate their most pernicious effects. As such, economic crises are actually conducive to IO longevity. We expect this effect to be especially pronounced for currency crises, IOs with an economic mandate, and regional IOs, given their particular relevance for international cooperation during hard economic times. These conjectures are tested with a comprehensive sample of IOs and data on currency, banking and sovereign debt crises from 1970 to 2014. Using event history models and controlling for several alternative explanations of IO survival, we find ample empirical support for the theoretical expectations.