Organizational change ‘from within’: exploring the World Bank's early lending practices

The World Bank is delegated the authority to provide long-term stabilization and general purpose balance of payments loans, what the Bank once described as 'program loans'. Yet after a brief period in its early years, the Bank stopped disbursing these loans for an extended period. Why? This paper shows that changes to the Bank's early lending practices can be understood largely as a product of intra-organizational dynamics and change that facilitated the construction of a 'project-oriented culture' that delegitimized the disbursement of program loans. Though providing a number of compelling reasons to expect autonomous behavior from international organizations (IOs), such dynamics present a blind spot for rationalist approaches, which offer little insight into the processes that shape preference formation 'from within' IOs. The paper augments constructivist approaches by going beyond structuralist and static conceptions of IO staff as simply reacting to initiatives 'from above' or 'from below' and offering a more dynamic explanation of organizational change that describes how internal norm entrepreneurs emerge and proactively and strategically reconstruct an IO's culture. Emphasis is placed on the role of personnel and internal institutional configurations.