World Health Organization (WHO)

The principal constellation in WHO is dominated by two conflict dimensions: the division between major donor states and the rest, and the heavily regionalized structure with six strong regional offices, including one, the Pan-American Health Organization (PAHO), which is an international organization in its own right and with its own budget (see Hanrieder 2015 on the path dependence of the WHO’s regionalized structure). The administration of WHO budgeting has long been dominated by this regional structure. Only in the early years of WHO, when these offices were not yet fully operational, was the WHO budgeting process clearly centralized and directed top-down by the WHO DG. From the early 1950s, the budget process turned much more bottom-up (Ascher 1952, 38). From the 1950s until the 1970s, WHO budgets also kept continuously rising as the DG could build on a two-thirds majority of states that were recipients of WHO technical assistance and thus favored budget increases. DG Marcolino G. Candau, in office from 1953 to 1973, only had to make sure his administration’s budget proposals did not alienate the major donor states too much (Jacobson 1973, 200). After a period of politicization in the 1970s and fiscal pressures (mainly from the United States) in the 1980s, WHO appeared to be an international organization ‘under stress’, especially as voluntary contributions became a major income source throughout the 1980s (Walt 1993); but both regular budgets and voluntary expenditures kept rising continuously (Hufner 2006, 237, 251).

Thus, on the surface, WHO has not been in a budgetary crisis for many years. Still, two major events in recent years have had a significant impact on funds. First, the global financial crisis resulted in a situation where actual WHO income fell short by 16.2 % compared to the projections in the approved WHO Programme Budget 2008-09 and again by 15.7 % in 2010-11 (WHO 2015b, 2). This sudden drop compared to the projections was the result of the high dependency of WHO on voluntary contributions: about 75 % of the overall budget is based on non-core budget resources. Although a significant share of these voluntary funds is provided by the Bill & Melinda Gates Foundation, a situation that adds to the complexity of the principal, the high share of voluntary contributions from member states made it easier for major donor states to cut down on voluntary support in times of financial crisis, resulting in several underfunded parts of the WHO budget during those two biennia.

Second, the outbreak of Ebola in 2014 severely challenged the operational capacity of WHO. It required rapid and significant resource shifts. With major shares of the organization’s budget being earmarked through voluntary contributions, financing the crisis reaction required a reorientation of core resources to the new emergency at hand. The Ebola situation clearly ‘overwhelmed’ WHO, partly due to budgetary reasons (WHO 2015a, 2). Thus, within a short period of time, WHO experienced both a sudden reduction in income and a sudden task expansion. DG Margaret Chan, who was in office throughout those years, underlined in her first speech at the World Health Assembly in 2006 that she would ‘manage WHO in a way that attracts resources’. In her 2011 mission statement, she did not make any reference to budget cuts or prioritization, but rather to ‘ways of securing new resources’ (Chan 2011): she can be characterized as a budget-maximizing rather than a bureau-shaping IPA leader. Accordingly, the expectation would be that she would have sought to strengthen decentralized budgeting (H2) and centralized resource mobilization and preferred an integrated budget (H3). The first is supported to some degree as the already existing bottom-up component of the budgeting process has recently been strengthened with member state offices being asked early in the process to define their programmatic (and thus budgetary) priorities (WHO 2015c). At the same time (contradicting H2), the institutionalization of the Global Policy Group (GPG), composed of the DG, the Deputy DG and the six regional directors, has introduced more centralized power throughout the budgeting process. The GPG is now involved when confirming the first consolidated draft budget for discussion at the Regional Committees and again before the adoption of the draft budget prior to its submission to the Executive Board (interview with WHO official #1, July 2015; WHO 2015c, Annex). In turn, our expectations for H3 receive clear support. First, since 2014-15, the WHO budget is fully integrated with overall ceilings for each major spending category including core and voluntary funds (WHO 2013). Resource mobilization has also been upgraded to a major organizational and administrative function with top leadership involvement. In a first step, resource mobilization was taken from the unit responsible for budgeting and a new resource mobilization unit was created in the DG’s office (interview WHO official #2, July 2015). Secondly, a Financing Dialogue as a pledging mechanism at relatively high level was introduced at the end of the budgeting process. One of the aims of this Financing Dialogue has been to limit decentralized resource mobilization from individual departments (interview with WHO official #1) and to ensure that under-funded budget parts receive sufficient support. The DG herself has also intervened directly with national ministries to raise funds for specific priorities under the WHO budget (interview with national official, July 2015), again highlighting the central importance of resource mobilization. In conclusion, we find both supporting and contradictory evidence for H2, but strong support for H3. WHO also remains an interesting case to examine how IPAs deal with complex principals, as complexity is particularly high owing to the highly regionalized structure and the heavy dependence on individual donors of voluntary funds, each with their own preferences and interests.