The institutional design of funding rules at international organizations: Explaining the transformation in financing the United Nations

What explains the design and development of funding rules at international organizations? I investigate this question in the context of the United Nations system, which has undergone a dramatic shift in financing. Long associated with mandatory contributions, the United Nations increasingly relies on voluntary resources earmarked by individual donors. Previous studies have investigated the financing puzzle from a behavioral perspective and have found that wealthy donors use voluntary funding to rein in costs and constrain international organization programs. Providing an alternative theoretical approach, I investigate the financing puzzle from an institutional design perspective. I provide original United Nations funding rule data to demonstrate that it is not only funding practices, but also underlying funding rules, that have changed over time. I theorize how states with favorable views of the United Nations that sought to expand its activities rather than those that desired to constrain it had incentives to introduce funding rules that offered more flexibility and control to donors. I test the argument with a longitudinal case study of funding rule design and change at United Nations economic development institutions. The article expands the institutional design literature by integrating funding rules as a consequential design component and provides a novel explanation for changes in United Nations financing.