Origins Of The European-Bank-For-Reconstruction-And-Development

In post-cold war Europe, the persistence of old international institutions and the development of new ones provide a testing ground for theoretical debates about the sources and consequences of international institutions. This article examines the origins of the European Bank for Reconstruction and Development (EBRD), which was created in 1990 to foster a transition in Central and Eastern European states toward market economies and democratic political systems. To improve on standard accounts of the origin of international institutions, I draw from organization theory to introduce a distinction between ''technical'' and ''institutional'' environments for organizations and develop expectations about how new institutions could arise and operate differently in each. EBRD looks like an institution developing in an institutional environment; that is, an environment that supports networks of organizations which share elements of legitimacy, even if organizations are not efficient in an economic or productive sense or in relation to the parochial preferences of states. The early history of EBRD provides some support for the argument that an institutional environment has been established in Europe and has survived both the end of the cold war and the passage of a hegemonic distribution of power.