Home turf: Headquarters of international organizations and earmarked funding

Abstract To what extent do states act differently through international organizations based in their own country relative to those located abroad? Building on scholarship on headquarters as ecosystems, city diplomacy, and informal power, I argue that states are more lenient vis-à-vis international organizations with headquarters in their own country. States are likely to opt for loose, rather than stringent, delegation of authority in everyday decision-making—holding the promise of increased informal influence and greater mutual trust and embeddedness over time. In the context of earmarked funding by Western donors—my empirical case—I hypothesize that donors are likely to provide less stringent funding to international organizations with headquarters in their own countries. Examining voluntary contributions from 32 donors to 255 international organizations between 1990 and 2020, I find support for my argument: international organizations receive less stringent earmarked funding from the donor-country in which the organization is headquartered. In additional analyses, I show that these effects are driven by thematic earmarking, and that the magnitude of the effects increases over time. I also discuss the two extreme cases of the United States and Switzerland to illustrate potential mechanisms. Taken together, my findings have important implications for our understanding of the micro-foundations of state action, the geography of international organizations, and earmarked funding.