2.1 Institutional Output: What Is It They Do?

International institutions produce different kinds of output, such as legally binding agreements, expert reports and the provision of venues for informal networking and learning. Importantly, I focus on all kinds of actions that an institution undertakes that are directed at its external environment (i.e. not those concerning its internal dynamics such as changed procedures; see Reference Knill and BauerKnill and Bauer, 2016). Before turning to cognitive, normative and incentive-oriented aspects of institutional output, I discuss the different types of formal and informal output.

I divide the formal output targeting the external environment into four categories. The first is the regulatory output that promotes or prohibits specific actions, including the setting of commitments (both legally binding and soft law), recommendations and criticisms of specific actions (Reference Tallberg, Sommerer, Squatrito and LundgrenTallberg et al., 2016). The second is the declarative output that asserts a joint position of the institution, for example common goals (Reference Tallberg, Sommerer, Squatrito and LundgrenTallberg et al., 2016). It may de facto be difficult to distinguish between regulatory and declarative output, as declarative statements may also limit member states’ possibilities of undertaking specific actions. The third is the knowledge output that consists of the creation and distribution of knowledge through publications, including data and analyses (Reference Barnett and FinnemoreBarnett and Finnemore, 2004), for example of the landscape of climate finance. The fourth is distributive output that reallocates resources, in the shape of financial and technical resources (e.g. for capacity-building), sanctions or punishments, and conditionalities for enjoying particular benefits, for example IMF conditionalities for receiving IMF loans (Reference Tallberg, Sommerer, Squatrito and LundgrenTallberg et al., 2016). The informal output includes informal consultations (e.g. between representatives of the institutions and a country government), low-key support for policymaking (e.g. advice) and workshops and seminars providing a venue for the dissemination of knowledge and interaction between actors. In this way, the workshops and seminars allow for learning and socialisation.

It makes sense to focus on three aspects of their output, namely the cognitive, normative and incentive-based dimensions.Footnote ² These three dimensions can be found in most of the aforementioned outputs, for instance do all of them involve some kind of cognitive aspect in terms of defining what is important. While the classification of the output according to the typology outlined earlier is important for understanding their respective roles and comparing them, focusing on these three dimensions is crucial for understanding economisation. Specifically, the cognitive and normative dimensions concern (inter alia) how and to which degree an issue is framed as an economic issue (the second aspect of economisation), but can also involve other kinds of framings, for instance in terms of equity. Incentives do not concern economisation as directly as the other two dimensions but understanding the output and outcome of the institutions requires studying the incentive-based dimension of this output as well as the cognitive and normative dimensions.

The distinction between cognitive and normative aspects draws on the distinction between cognitive ideas regarding what something is or how to understand a given issue and normative ideas regarding ‘what is good or bad’ about ‘what is’, good and bad understood in terms of ‘what one ought to do’ (Reference SchmidtSchmidt, 2008). In terms of economisation, this may play out in terms of framing climate change as an externality or a market failure, a framing that includes the cognitive idea that climate change constitutes a market failure and the normative idea that this market failure should be corrected to create a long-term optimal outcome (see Reference JacobsJacobs, 1997; Reference Katz-Rosene and PatersonKatz-Rosene and Paterson, 2018; Reference SkovgaardSkovgaard, 2012). In practice, normative and cognitive ideas are often closely intertwined, for example framing a stream of revenue as climate finance leads to the conclusion that providing such revenue is appropriate. Yet, I argue that it makes sense to distinguish between them for heuristic reasons: comparing the output between the three institutions and the two areas in question provides more analytically useful results if you are able to identify to what degree the output differs regarding normative and cognitive ideas. Importantly, mainstream economics rarely determines exactly how ideas firmly established in the discipline should be applied, and hence diverging applications of ideas rooted in this discipline (even within the same paradigm such as neoclassical environmental economics) are possible.

The cognitive dimension covers the definition of what issues are, in this case climate finance and fossil fuel subsidies. More specifically, the cognitive dimension of the institutional output generally speaking refers to ideas regarding causal relations (e.g. ‘X causes Y’) as well as how empirical phenomena should be defined and what is important about them (Reference Sabatier and WeibleSabatier and Weible, 2014; Reference SchmidtSchmidt, 2008). For instance, cognitive ideas regarding fossil fuel subsidies or climate finance may concern how they should be defined, what their consequences are, how they can be reformed or scaled up and so forth. Regarding causal relations, the cognitive dimension concern ideas regarding the causes of a given policy issue and the consequences of the policies addressing these issues (Reference CampbellCampbell, 1998). Such causal ideas may concern how to best promote fossil fuel subsidy reform or use climate finance. Regarding the definition of the phenomena, both issues have been characterised by intense disputes over their definitions, that is whether a given policy can be characterised as a fossil fuel subsidy (Reference SkovgaardSkovgaard, 2017a; see Chapter 4 for more details) or a financial flow as climate finance (Reference Roberts and WeikmansRoberts and Weikmans, 2017; Reference SkovgaardSkovgaard, 2017b; see Chapter 9 for more details). The definitional aspect is important not only in terms of which policies or financial flows fall under the definition, but also which aspects of the issue (fossil fuel subsidies or climate finance) are important, for example if they are framed as economic issues rather than environmental or development ones. Often, the definition of the problem shapes causal ideas about the solutions that are logical to use (Reference Schön and ReinSchön and Rein, 1994). On a closely related note, the cognitive dimension also concerns the kinds of data that are relevant for understanding the issue, for example whether it is best measured in quantified, monetary terms, specifically in terms of economic costs or benefits (Reference JacobsJacobs, 1997). The production of knowledge is a key type of formal institutional output (as discussed in the beginning of this section), and such knowledge production has a strong cognitive dimension in defining what is important about an issue and how it can be measured, for example the size of fossil fuel subsidies and climate finance flows.

The normative dimension refers to how the institutions define the key normative issues that characterise the politics of fossil fuel subsidy reform and climate finance. Normative ideas refer to normative ideas about ‘what one ought to do’ (Reference SchmidtSchmidt, 2008), including norms understood as intersubjective standards of appropriate behaviour (Reference Finnemore and SikkinkFinnemore and Sikkink, 1998; Reference March and OlsenMarch and Olsen, 1989) as well as more fundamental normative ideas about what is right and desirable. Regarding the former, a relevant example of a norm is the emerging norm of fossil fuel subsidy reform, which defines fossil fuel subsidies as environmentally damaging and as something that should be phased out (Reference Van de Graaf, Blondeel, Skovgaard and van AsseltVan de Graaf and Blondeel, 2018). More specifically, concerning international economic institutions, Reference Park, Vetterlein, Park and VetterleinSusan Park and Antje Vetterlein (2010b) define policy norms as shared expectations for all relevant actors within a given community about what constitutes appropriate behaviour, which is encapsulated in policy output. Regarding the latter, relevant fundamental normative ideas include the idea that (policy) objectives should be defined in terms of optimising economic output (Reference ColeCole, 2008; Reference JacobsJacobs, 1997; Reference SkovgaardSkovgaard, 2017b). The exact meaning and application of normative ideas have been highly contested at the international level, as has been the case with the norm of fossil fuel subsidy reform, which has been characterised by disagreement between international economic institutions regarding to what extent many countries subsidise fossil fuels (Reference Skovgaard, Skovgaard and van AsseltSkovgaard, 2018; Reference Van de Graaf, Blondeel, Skovgaard and van AsseltVan de Graaf and Blondeel, 2018). While all output of the institutions has or may have a normative dimension, the normative dimensions are particularly relevant when they act as norm entrepreneurs (Reference Finnemore and SikkinkFinnemore and Sikkink, 1998).

The third dimension of institutional output consists of incentives, referring to measures that aim to change the incentive structures facing actors. Unlike the ideational dimension, incentives do not alter the ideas and knowledge held by actors or which ideas are considered appropriate or authoritative but aim to change actors’ behaviour by altering the costs and benefits associated with particular actions. While normative ideas may affect actors’ preferences and hence how they react to incentives, the incentive-based dimension of output concerns incentive structures that influence actors without changing their preferences. Thus, while actors may change their preferences, these preferences tend to be constant and determine how the actors respond to incentive structures. More specifically, while the ideational aspects concern the shape economisation takes in terms of how climate finance or fossil fuel subsidies are framed as economic issues (cognitively and normatively), the incentives concern how economisation translates into concrete incentives for and against particular actions. Incentive-based output has been the focus of liberal institutionalist literature, which argues that international institutions are created to provide incentives for cooperation through punishing non-cooperation and rewarding cooperation, for example by providing transparency regarding whether a state cooperates or not, allowing for punishment from other states or an International Organisation (IO) (Reference KeohaneKeohane, 1984, Reference Keohane1989). The incentive-based output of the institutions may take the shape of regulatory agreements among member states or between the institution and a state, or of distributive output such as the provision of support (both being formal types of output). The former agreements include inter alia commitments between states (e.g. to undertake fossil fuel subsidy reform or provide climate finance), the violation of which may result in sanctions or reputational costs that would reduce the state’s credibility when future commitments (in this field or in others) are to be negotiated (Reference Smith and UrpelainenSmith and Urpelainen, 2017). Whereas sanctions are generally explicitly defined as a response of the institution to particular actions, reputational costs operate through states (including but not limited to member states) having less faith in the state violating the commitment. Incentives also include distributional output in the shape of conditionalities (e.g. cessation of IMF loans if countries do not reform fossil fuel subsidies; see also Reference Schimmelfennig, Engert and KnobelSchimmelfennig et al., 2005; Reference VreelandVreeland, 2007) as well as material support (e.g. finance or expertise) for particular actions. Finally, beyond regulatory and distributive output, the incentive-based output also includes output that allows for states to signal the credibility of their offers or commitments, or to gain more information about the offers or commitments of other states, for example through informal discussions or the provision of data (on the role of commitments and information in international negotiations; see Reference UnderdalUnderdal, 1983).

2.2 How Institutions Align

After identifying the institutional output of the different institutions, the next step is to explore how their output is aligned. While the direct effects of one institution’s output on another institution (e.g. one institution placing a commitment on another) will be studied in the section on the consequences of institutional output, in this section, I focus on the extent to which their output is synergistic, co-existing or conflictive (Reference Biermann, Pattberg, van Asselt and ZelliBiermann et al., 2009a; Reference Zelli, Nasiritousi, Bäckstrand, Zelli, Bäckstrand, Nasiritousi, Skovgaard and WiderbergZelli et al., 2020). In other words, the different kinds of output may support or undermine each other, or they may be directed at different issues or governance functions in a non-interacting way that neither supports nor undermines the output of other institutions, for example because they occupy different niches (Reference Abbott, Green and KeohaneAbbott et al., 2016).

First, regarding the cognitive ideas, if the different institutions use different sets of such ideas to describe the same empirical phenomenon, it may constitute a conflictive relationship (Reference March and OlsenMarch and Olsen, 1989; Reference Schön and ReinSchön and Rein, 1994). Such conflict may concern what is important about the issue or causal relationships in the shape of divergence regarding the causes of or solutions to a particular problem. The institutions may also differ regarding the definition of fossil fuel subsidies and climate finance, and hence also whether a given policy constitutes a fossil fuel subsidy or a financial flow of climate finance. Beyond conflict, diverging outputs may also lead to the outputs being of little relevance to each other and creating confusion among audiences (where similar audiences are targeted) regarding what is important as well as information overload (Reference Skovgaard, Canavan, Zelli, Bäckstrand, Nasiritousi, Skovgaard and WiderbergSkovgaard and Canavan, 2020; Reference Zelli, Nasiritousi, Bäckstrand, Zelli, Bäckstrand, Nasiritousi, Skovgaard and WiderbergZelli et al., 2020). As regards knowledge that is based on similar or closely related cognitive ideas, the output from the institutions is more likely to be synergistic, for example the IMF building on OECD data on climate finance streams when producing its own analysis of climate finance.

Second, normative output may be more or less conflictive or synergetic, the former in terms of outright conflicting norms but also in terms of differing interpretations of the same norm. Although conflict between the core norms of the institutions (Reference Biermann, Pattberg, van Asselt and ZelliBiermann et al., 2009a) is unlikely given that these core norms are based on very similar economic paradigms (Reference BernsteinBernstein, 2001; Reference ChwierothChwieroth, 2008; Reference LehtonenLehtonen, 2007; Reference SlaughterSlaughter, 2017), institutions’ interpretations of climate-related norms as well as fundamental normative ideas may differ. The contestation over norms may concern their application to concrete situations (Reference WienerWiener, 2004), as even relatively minor differences in the interpretation may lead to widely different applications of the norm, for example whether a country’s fossil fuel subsidies are inefficient and hence should be reformed or not (Reference Van de Graaf, Blondeel, Skovgaard and van AsseltVan de Graaf and Blondeel, 2018). More fundamentally, contestation over normative ideas may concern their general appropriateness and validity, as well as how they should be prioritised vis-à-vis each other, for example how efficiency (also known as cost-effectiveness) should be prioritised vis-à-vis equity (see Chapter 9).

Thus, while the institutions’ economic core norms pull in the direction of synergy on some fundamental issues (e.g. economic growth and stability being key objectives), there is ample scope for synergy and co-existence as well as conflict regarding several normative ideas and the interpretation of norms. Importantly, synergistic relationships may strengthen particular interpretations of norms or normative ideas, for example if several institutions promote the same interpretation of a given norm. Finally, there may be an intentional or unintentional division of labour, in which certain institutions promote specific norms.

Third, in terms of incentives, the key issue is whether these incentives pull in the same or diverging, even opposite, directions. If, for instance, one institution provides support for one kind of action, while another punishes such behaviour, the incentives are conflicting (Reference Gehring and OberthurGehring and Oberthur, 2009). Synergistic relations are equally possible, for example in the shape of one institution providing (material) support for actions that will help a state to meet its obligations under a commitment produced by another institution. Beyond providing incentives pulling in similar or opposite directions, there is also the possibility that the incentives provided by different institutions crowd each other out, for example by providing such a multitude of different incentives that it is not possible for the actors targeted to respond to all of them (Reference Abbott, Green and KeohaneAbbott et al., 2016; Reference Eberlein, Abbott, Black, Meidinger and WoodEberlein et al., 2014).

Fourth, it is worthwhile studying how the institutions align in terms of their types of output or governance functions. It is relevant whether all institutions focus on the same kind of output, for example setting commitments or producing knowledge, or if there is an explicit or implicit division of labour, so that one may focus mainly on knowledge production, a second on defining norms and a third on distributive output providing financial incentives (Reference Gehring and FaudeGehring and Faude, 2014; Reference Zürn and FaudeZürn and Faude, 2013). While each of the institutions generally provide several types of output, they may differ as to which one is the main type.

Fifth, and finally, it may matter which actors are addressed by the output of the institutions. The three institutions differ concerning the states that are their members: the G20’s membership covers twenty of the largest (developed and emerging) economies, the OECD all developed countries and the IMF most countries in the world. Furthermore, the institutions also differ to some degree regarding the government institutions they interact with: while the IMF and the G20 interact mainly with finance ministries and central banks (and in the case of the G20 also the offices of heads of state and government), the OECD interacts with many different ministries (Reference Kirton and KokotsisKirton and Kokotsis, 2015; Reference RuffingRuffing, 2010; Reference VreelandVreeland, 2007). All things considered, there are significant overlaps in terms of the actors they address, but there is also a range of actors that are addressed only by one of the institutions. An overlap may increase the likelihood of conflicting institutional output, as different institutions may promote diverging norms, knowledge or incentives to the same states (Reference Zelli, Nasiritousi, Bäckstrand, Zelli, Bäckstrand, Nasiritousi, Skovgaard and WiderbergZelli et al., 2020). This risk is particularly pertinent if they address different ministries within the same country, for example if the OECD promotes one interpretation of a norm to development or energy ministries and the IMF a different interpretation of the same norm to the finance ministry. Institutions addressing different states with differing output risk creating conflictive relationships among countries as well as institutions.

2.3 Causes of International Economic Institutions’ Output and Alignment

The next step is to identify the factors that shape the output and the alignment of the institutions, both in terms of inducing an institution to address fossil fuel subsidies and climate finance in the first place and of shaping how they address them. Importantly, inducing the institutions to address the issues concerns the first aspect (that economic institutions address the issue) and how they address the issue concerns the second aspect of economisation (that they address the issue as an economic one). Thus, although these two aspects are closely related (as discussed in Chapter 1), one factor may be more relevant for the first aspect than the second and vice versa. The factors that shape the output of the institutions are also important for shaping their alignment; that is, if similar factors shape their output, the alignment will be synergistic. Hence, I first outline how the factors may shape the output of an individual institution, and subsequently discuss their relevance to institutional alignment. I draw on strands of international relations literature that focuses mainly on institutions as actors in their own right, independent of state behaviour (Reference Barnett and FinnemoreBarnett and Finnemore, 2004; Reference Nielson and TierneyNielson and Tierney, 2003; Reference Park and VetterleinPark and Vetterlein, 2010a) as well as literature on international institutions and their interaction (Reference Oberthür and StokkeOberthür and Stokke, 2011; Reference Zelli and van AsseltZelli and Asselt, 2013). Given that two of the institutions (the IMF and the OECD) are IOs, the first strand of literature is highly relevant to them but less so (and in a different way) to the G20.

Regarding the IO strand, Reference Biermann, Siebenhüner, Bauer, Biermann and SiebenhünerBiermann et al. (2009b) distinguish among three kinds of influences on IOs: problem structure, extra-organisational (mainly member states) and the organisation itself. The two problem structures of the two policy issues (fossil fuel subsidies and climate finance) are constant between the institutions analysed here, thus allowing for a study of the effect of problem structure only when comparing the institutions’ handling of the two issues (in the concluding Chapter 14). Here, problem structure refers to the position of the issues in policy spheres (in this case economic and environmental), their costs and benefits (here especially fiscal costs), their degree of international contestation (especially North–South contestation) and how entrenched state preferences regarding the issues are (Reference JinnahJinnah, 2015; Reference Weiss and JacobsonWeiss and Jacobson, 1999).

Yet, extra- and intra-organisational factors vary between the institutions, allowing for a comparison of the three institutions’ handling of each issue. Intra-organisational influences explain the role of IOs in terms of their organisational culture and policy entrepreneurs within the bureaucracies (Reference Barnett and FinnemoreBarnett and Finnemore, 2004; Reference Park, Vetterlein, Park and VetterleinPark and Vetterlein, 2010b). Extra-organisational influences mainly explain the role of IOs in terms of their status as agents contracted by principals (the member states) to perform a function that will benefit the principals (Reference Hawkins, Lake and NielsonHawkins et al., 2006; Reference Nielson and TierneyNielson and Tierney, 2003). I argue that although the G20 does not have a bureaucracy as such, it is possible to speak about intra-institutional factors also in its case, namely policy entrepreneurs with an institutionalised role (e.g. G20 presidents and chairs of working groups) and the worldview inherent to the G20 (see also discussion in Chapter 1 of the relationship between IOs and institutions).

I organise the various causal factors from the literature into four categories. These categories are the worldview of the institutionFootnote ³ (intra-institutional), policy entrepreneurs operating within the institution (intra-institutional), relations with member states (extra-institutional) and interaction with other institutions (extra-institutional). While these institutions vary significantly in terms of relations with member states, they vary less in terms of the other factors (see the discussion of case selection in Chapter 1). In Chapter 3, the three institutions’ worldviews, relations with member states and interaction with other institutions are discussed in more detail.

The institutional worldview refers to normative as well as cognitive ideas inherent to the individual institutions and together constitute the worldviews that shape how they perceive and address policy issues (e.g. the IMF’s worldview rooted in neoclassical economics leading it to define the non-pricing of externalities as a subsidy). This worldview may play an important role in shaping how the institutions address fossil fuel subsidies and climate finance, but cannot directly induce them to address it, only constitute a contextual factor for other factors inducing the institutions to address the issues. The sociological institutionalist IO literature focuses on the worldviews of IO bureaucracies (Reference Barnett and FinnemoreBarnett and Finnemore, 2004; Reference Park, Vetterlein, Park and VetterleinPark and Vetterlein, 2010b), and draws on sociological and historical institutionalist (Reference Hall and TaylorHall and Taylor, 1996; Reference March and OlsenMarch and Olsen, 1989) and cognition-oriented bureaucratic politics literature (Reference Allison and ZelikowAllison and Zelikow, 1999; Reference DreznerDrezner, 2000) to argue that such worldviews are inherent to the bureaucratic cultures of the IO bureaucracies. In the words of Reference Allison and ZelikowGraham Allison and Philip Zelikow (1999), ‘where you stand depend on where you sit’. These worldviews are inherent to the institutions and shape how the actors within the institutions perceive policy issues, including what is problematic about them, their causes and how they can and should be addressed (Reference BacchiBacchi, 2009). Thus, the worldview encompasses both cognitive and normative ideas, which, as mentioned previously, are often closely linked, since the framing of the situation defines which norms are salient, which actions are logical and what the consequences of the different actions will be (Reference KratochwilKratochwil, 1989).

In the case of bureaucracies, the worldviews are more institutionalised than in a forum such as the G20. Regarding such international bureaucracies, their organisational culture is closely tied to the training (particularly educational background) of the officials – in the case of the international economic institutions their training as economists (Reference ChwierothChwieroth, 2010; Reference KanburKanbur, 2001). Training and worldview are hard to disentangle in practice, not only because they tend to pull in the same direction, but also because organisations characterised by a particular worldview tend to recruit staff with an educational background (from specific disciplines such as economics and even particular universities) that corresponds with this worldview, in this way reproducing the worldview (Reference DiMaggio and PowellDiMaggio and Powell, 1983). The worldviews of the institutions are not entirely unitary, but often differ in some respects between different sections and divisions of a bureaucracy (Reference KaarboKaarbo, 1998). Thus, a bureaucracy may be characterised by a shared set of core normative and cognitive ideas, for example that optimising economic value is the main objective and that market logic constitutes an optimal way of achieving it, but may differ among sections regarding secondary beliefs or ideas, for example the relationship between economic value and other objectives (on the relationship between different levels of beliefs or ideas, see Reference Jenkins-Smith, Nohrstedt, Weible, Sabatier, Sabatier and WeibleJenkins-Smith et al., 2014). Importantly, the worldview operates on a much broader scale than the cognitive and normative output, that is, the worldview concerns ideas on a conceptual level potentially applicable across a broad range of cases, whereas cognitive and normative output concerns the ideas applied to a concrete situation.

Regarding the worldviews of the three institutions (see also Chapter 3), the OECD’s approach to environmental issues has often been characterised in terms of the paradigm of ‘liberal environmentalism’ stressing economic instruments and compatibility between economic growth and environmental protection (Reference BernsteinBernstein, 2001). The IMF is arguably more directly influenced by neoclassical economics than the OECD (Reference ChwierothChwieroth, 2008; Reference Howarth and SadehHowarth and Sadeh, 2011). Finally, the G20 does not have a bureaucracy, but relies on the G20 Presidency as secretariat. Even if the worldviews are less institutionalised in a forum such as the G20, the frequent interaction between actors may establish a shared worldview or at least perspective on an issue, especially if the participants come from bureaucracies with similar worldviews (e.g. finance ministries) and share educational background (Reference DiMaggio and PowellDiMaggio and Powell, 1983). A forum for experts within the G20 set-up may develop into an epistemic community sharing normative and causal beliefs as well as a common policy enterprise (Reference HaasHaas, 1992). Even if it does not fully develop into an epistemic community, socialisation processes may be present, in which case the worldviews of the participants start to converge around a set of normative and causal beliefs (Reference JohnstonJohnston, 2001).

The term policy entrepreneurs refers to individuals within the institutions (especially their bureaucracies) as well as to collective actors, who may induce the institutions to address an issue or promote particular ways of addressing it (e.g. treating climate finance as a kind of development aid). Policy entrepreneurs are understood as actors promoting significant policy change (Reference Mintrom and NormanMintrom and Norman, 2009). Their activities include framing policy problems, advocating new ideas and policy proposals, specifying policy alternatives, mobilising public opinion and setting the decision-making agenda (Reference KingdonKingdon, 2003; Reference Roberts and KingRoberts and King, 1991). As regards new issues, policy entrepreneurs promote them by framing them in ways that lead to particular policy responses (Reference ChwierothChwieroth, 2008), and are less constrained in their framings than in the case of established issues. The lesser constraint is due to new issues having a lower degree of precedence (prior action on the issue) and determinacy (agreement on how an issue shall be understood and which ideas apply; see Reference Jordan and HuitemaJordan and Huitema, 2014; Reference RhinardRhinard, 2010; Reference SkovgaardSkovgaard, 2015). They also promote new issues by moving them up the agenda of the institution they operate within as well as other institutions and organisations (Reference BakirBakir, 2009; Reference KingdonKingdon, 2003). The policy entrepreneurs have to operate within the worldviews of the institutions and frame issues in ways that resonate with these worldviews. They also have to operate within the constraints and opportunities constituted by the resources available and their mandates. In the case of entrepreneurs from IO bureaucracies, these constraints and opportunities originate from the bureaucracy and the relationship with the member states (see later in this section). In the case of the G20, the constraints and opportunities stem from the set-up of the G20, with a Presidency chairing meetings and expert groups reporting to ministerial meetings, as well as constraints and opportunities within the state that the policy entrepreneur works for, for example, domestic decision-making procedures. Policy entrepreneurs are distinguished from norm entrepreneurs in that they work to change policy rather than promoting a specific norm (see Reference Finnemore and SikkinkFinnemore and Sikkink, 1998 on norm entrepreneurs), yet de facto several of the policy entrepreneurs studied here may also be defined as norm entrepreneurs.

Relations with member states is a term that covers which states are members of the institutions, how the member state representatives arrive at decisions (voting or consensus), the ministries that represent the states vis-à-vis the institutions and the degree of autonomy of the institutions’ bureaucracy vis-à-vis the member states. It is relatively straightforward for a member state to induce institutions to address an issue (unless other member states veto such efforts, as Saudi Arabia did in the case of fossil fuel subsidies prior to 2009). Yet their ability to prevent the institution from addressing an issue and shape how the institution addresses it depends on its autonomy (discussed later in this section). Membership in terms of which states are members is relevant, since the aggregate state preferences and power constitute one factor shaping the institutional output (Reference Zürn and FaudeZürn and Faude, 2013). The G20 covers twenty of the world’s largest developed and emerging economies, OECD covers only developed countries and while the IMF covers most countries, its voting rules grant the major developed countries a position close to a combined veto power, with the United States according to some scholars having an influence beyond its share of votes (Reference StoneStone, 2008). This is because the IMF arrives at decisions through voting, with voting rights reflecting a country’s share of the global economy, while the G20 and the OECD member states arrive at decisions through consensus. The question of which ministries represent the member state may also matter (Reference Raustiala and VictorRaustiala and Victor, 2004; Reference SkovgaardSkovgaard, 2012), since different ministries are characterised by different objectives and worldviews (Reference Allison and ZelikowAllison and Zelikow, 1999). For instance, finance ministries promote fiscal balances and growth and see the world through an economic lens (Reference SeabrookeSeabrooke, 2011; Reference SkovgaardSkovgaard, 2017b; Reference WildavskyWildavsky, 1986), and environment ministries promote environmental protection (Reference Weale, Pridham, Williams and PorterWeale et al., 1996).

Regarding autonomy, principal–agent theory (relevant only to IO bureaucracies) focuses on the role of these bureaucracies in terms of their status as agents contracted by the principal (the member states) to perform a function that will benefit the principal, and on the IO’s degree of autonomy from principals (Reference Hawkins, Lake and NielsonHawkins et al., 2006; Reference Nielson and TierneyNielson and Tierney, 2003). The member states constitute one collective principal that delegates the task of addressing an issue to the agent (the IO). The more autonomy the agent has, the more it can act independently of the principal and produce output that differs, even contradicts, the preferences of key member states or even the principal as a whole.

The autonomy of an IO is operationalised in terms of the control over resources, involvement of member states in the decision-making process and specificity of its mandate (Reference Bauer and EgeBauer and Ege, 2016; see also Chapter 3). An IO that has considerable resources and controls how they are raised has more autonomy to take up new issues and address issues in ways deviating from the principal’s preferences than an IO that needs to have its use of resources approved by the principal. Likewise, an IO that may produce output independently of its principal has more autonomy than one in which the principal is closely involved in the production of output and that needs approval by the principal of the output. Often, the IO may produce two kinds of output: one that is produced solely by the IO bureaucracy and another which requires the approval and sometimes the active co-production of member states. The key question is then how important the outputs from the two streams are compared to each other, and how closely involved the member states are in the second stream, for example, whether they just need to approve the output or if they are involved in the decision-making process from an early stage. Furthermore, an IO with considerable degrees of freedom in its mandate, for example, to interpret the issues that fall under its portfolio, has more autonomy than those with a very specific mandate. In conclusion, the degree of IO autonomy acts as a scope condition for the influence of both the institutional worldview and policy entrepreneurs within the institutions’ bureaucracies. The IMF worldview and policy entrepreneurs would be more capable of influencing institutional output than the OECD worldview and policy entrepreneurs, since the IMF controls its own resources and operates more independently of the member states than the OECD (Reference Busch, Biermann and SiebenhünerBusch, 2009; Reference Dreher and VaubelDreher and Vaubel, 2004).

Interaction with other institutions covers both the interaction among the institutions studied in the book (e.g. the OECD fulfilling secretariat functions for the G20; Reference HajnalHajnal, 2019) and with other institutions, especially the United Nations Framework Convention on Climate Change (UNFCCC) and the World Bank. The literature on the dyadic interaction between institutions (Reference Oberthür and StokkeOberthür and Stokke, 2011; Reference StokkeStokke, 2001, Reference Stokke2012), and on the fragmentation and coupling of institutions into institutional/regime complexes (Reference Biermann, Pattberg, van Asselt and ZelliBiermann et al., 2009a; Reference Keohane and VictorKeohane and Victor, 2011) rests on the assumption that international institutions cannot be understood without including their relationships with other institutions. The same goes for the literature on interaction among IOs (Reference BiermannR. Biermann, 2008; Reference KrankeKranke, 2020; Reference HibbenMomani and Hibben, 2015). Interaction with other international institutions influences when and how an institution addresses climate issues. The mechanisms through which institutions are influenced by other institutions are similar to the mechanisms through which they influence other institutions, as discussed in Section 2.4. Thus, the approach adopted here is similar to the literature on dyadic interaction (Reference Gehring and OberthurGehring and Oberthur, 2009; Reference Oberthür and StokkeOberthür and Stokke, 2011), except that I disaggregate this interaction to distinguish between the influences affecting the institutions studied here and the influences they exert influencing others.

The mechanisms include ideational change, as well as changes to incentive structures and to agenda-setting. Ideational change includes changes to the ideas within the institutions, including both cognitive and normative dimensions. As such, it may alter the ideas held by individuals within the institution (be they IO officials or member state representatives) as well as ideational environments within the institution (whose ideas are considered relevant and appropriate). The ideational environment is more institutionalised within IOs, and an IO may (to a larger degree than a forum such as the G20) be less receptive to new ideas stemming from another IO with a diverging worldview (Reference BiermannBiermann, 2008; Reference HibbenMomani and Hibben, 2015). In the case of cognitive ideas, this includes the provision of new knowledge or learning processes in which cognitive ideas framing fossil fuel subsidies and climate finance are changed or introduced (see also Reference Gehring and OberthurGehring and Oberthur, 2009). Changes to the normative ideas within the institution include inter alia the institution in question accepting new normative ideas or being socialised into a norm promoted by another institution (on socialisation, see Reference CheckelCheckel, 2005). Changes to incentive structures consists of changes to incentives facing the actors within one institution originating from another institution, including the transfer of resources, pressure to address an issue in a particular way or agreements made within one institution influencing the willingness to compromise in another institution (see also Reference Zelli, Nasiritousi, Bäckstrand, Zelli, Bäckstrand, Nasiritousi, Skovgaard and WiderbergZelli et al., 2020). For instance, IOs may receive more resources, or a commitment made within one institution inducing the member states of that institution to push for similar commitments within other institutions. Finally, agenda-setting concerns actions from one institution influencing the priority given to climate finance or fossil fuel subsidy reform by another institution, for example, the G20 tasking another institution to provide an analysis of climate finance or fossil fuel subsidies.

Regarding the factors shaping the alignment among the institutions, the same factors are relevant. Generally speaking, the more similar the factors shaping the output of the individual institutions, the more synergistic they will be; for example, if their worldviews are very similar and in all institutions play an important role in shaping their output, it will pull in the direction of more synergistic alignment. Interaction among institutions plays a particularly important role in encouraging the institutions to adopt similar positions. Moreover, interacting with other institutions than the ones studied here (e.g. the World Bank, the International Energy Agency) may lead to similar positions if they interact with the same set of institutions, and to divergent positions if they interact with different sets of institutions.

2.4 Consequences of IEI Output

The output of the institutions may have different consequences for actor behaviour, what is referred to as outcome. These consequences play out differently at the domestic and the international levels.

2.5 Summary

The framework outlined in the preceding text is useful for exploring the institutions’ handling of fossil fuel subsidies and climate finance, including the economisation in the shape of their output, and the alignment, causes and consequences of this output. The framework includes reoccurring themes, most notably cognitive, normative and incentive-based dynamics. For instance, the framework may identify whether output in the shape of commitments with a distinct normative dimension (e.g. promoting a norm) have been driven by particular normative factors and have particular normative consequences. The framework will be important for the study of economisation, since it allows one to study how economisation has taken place (including variation between institutions) and the causes and consequences of economisation in its different shapes.