Abstract:

The study of international organizations (IO’s) is plagued with a wide variety of problems. The most

salient include definitional debates and the theoretical divide. This work seeks to merge the IR

scholarship of a rationalist persuasion by selecting a definition, a theory (or three), and apply these to a

particular case; the Arctic Council. As a relatively new IO this case allows for an examination of the

changing relationship between the member states and the IO early in this early developmental stage. By

using this case, this work hopes to contribute evidence to begin the falsification process of at least some

of the white theoretical noise found in the less applied work on IO’s, and to build a better understanding

of how an IO evolves in the earlier stages of its development and beyond.

Introduction

In the international relations literature on International Organizations (IO’s) there exists a

fundamental gap in how scholars from the diverse pool of IR thought investigate the impact of IO’s. To

borrow (and alter slightly) the term coined by John Ruggie, rationalists seek to explain IO’s from a

systemic vantage point. Work from this perspective often deals with large concepts such as globalization

and how they impact all IO’s in the international system (Examples include: Hurrell and Woods 1995;

Cooper et al 2008; Claude 1966; Mitchell and Hensel 2007; and Ness and Brechin 1988; Ruggie 1995).

The other large theoretical perspective, non-rationalists, often seek to answer research questions about

the internal activities of IO’s. These works often deal with topics such as the impact of the IO’s top most

leader (Examples include: Park 2005; Barnett and Finnemore 1999; Haas 1992; Cox 1969; Cox 1980).

While these theories are often seen as asking questions based on their given assumptions about

the world, it is possible for these differences in the types of research questions being asked to be

reconciled. This work argues that rationalist theories can also explain the internal activities of IO’s. By

marrying three strains of rationalist thought from two different subfields of political science, this work

fills the gap between the rationalists and non-rationalists and seeks to explain the internal activities of

IO’s via principal agent theory (PAT) and organizational theory. This allows for a direct comparison

between the results of non-rationalists and rationalists on similar research question to begin the

falsification process of the two large theoretical camps of the IR discipline.

2

Before jumping into the logic behind the melding of the three forms of rationalism, this work

makes a brief survey of the literature on IO’s. Following this literature section, rationalist thought is

linked and expanded via principal agent theory. Next, will be the data and methods section that

discusses the particular qualitative methods and data used to conduct a case study of the Arctic Council.

After this will be the case section, which explores the Arctic Council in more detail. After the case is dealt

with, a results section will showcase the results found during the case study analysis. Lastly will be a

conclusion that explores the implications of the results for future qualitative and quantitative work on

IO’s.

Literature Review

Within the field of international relations (IR), scholars of both dominant theoretical views,

rationalists (Neoliberal’s and Neorealist’s) and non-rationalists [Constructivists and others] (Ruggie

1995) often use the concept of state interest to either explain or criticize arguments about the empirical

world. Non-rationalists might claim that states do not have interests, while a rationalist would respond

that they do. However, this debate between rationalists and non-rationalists does not take into account

reality.

A more accurate description of how states perceive their external environment is to say that

states have indifference curves instead of interests. These indifference curves represent the desired

mixture of both power and plenty for any given state in the international system. The mixture is not

fixed, but varies on the cost of both power and plenty (Gilpin 1981; Viner 1948).

The idea that a state has a single overarching goal of attaining more power at the expense of all

other goals (such as plenty) is a false distinction. States seek both, but the emphasis placed on either

one fluctuates given the situation. The concept of indifference curves is used in place of “state interest”

as it more accurately represents the complexity of states wishes in the international system. While the

3

use of this alternative definition of states expressed goals does reveal this work to be of a rationalist

persuasion, the idea of states having an indifference curve appears to also be compatible with non-

rationalist work as well, which will allow for this work be contrasted with non-rationalist scholarship

more easily (Gilpin 1981; Viner 1948).

By adopting the concept of indifference curves, instead of state interest, it becomes possible for

this work to qualitatively explore International Organizations (IO’s) with the same amount of leverage

that is available to non-rationalists who rely on much less rigid concepts such as norms and ideas. This

will assist in the later adaptation of the three forms of rationalist thought to a qualitative case study of

the Arctic Council.

Given the concept of indifference curves, the next logical question to ask prior to any analysis of

IO’s is how should an empirical work operationalize the term IO. Unfortunately, this is no simple task. If

we look at Duffield’s work, it becomes apparent that both IO’s, and International Institutions (II’s) are

contested concepts in the literature. While such a realization may not be startling to a social scientist,

there is something that should be. In the literature on IO’s and II’s, a plethora of examples can be found

of scholars not having any definition at all. Often they simply fly from the seat of their empirical pants

(See Songying 2008; Mitchell and Paul 2007 for examples). This is not only irresponsible, but also a

serious flaw that mars most work on IO’s.

To avoid such a definitional problem, this work adopts the definition set forth by Duffield. Thus,

an IO is separate from an II. An II is more closely linked to regime theory and informal institutions (Young

1980), while an IO is more closely linked to formal institutions.1 An IO then is both an actor in the

1 This work specifically rejects regime theory and replaces it with the organizational sociology concept of environment (Ness and Bretchin 1988).

4

international system and a formal structure (Duffield 2007). The reasons for this definitional selection

will become more clear in the next section when the theoretical approach is outlined.

As noted in the beginning of this section, the literature on IO’s is divided into two theoretical

camps. On one side is the rationalists (Finke 2013; Cooper et al 2008; Songying 2008; Mitchel and Hensel

2007; and Hurrell and Woods 1995).2 On the other are the non-rationalist’s, typically Constructivist

scholars (See Park 2005; Haas 1992; Cox 1969; Cox 1980; and Barnett and Finnemore 1999). Each camp,

using their chosen theory, seeks to better understand IO’s and their impact on the international system.3

This work acknowledges the contributions of both camps but has chosen to adopt a rationalist

perspective in order to avoid the aforementioned definitional problem and to extend the reach of

rationalist theory.4

In addition to the contested concepts, lack of definitional rigor, and competing theoretical

camps, the literature on IO’s will be further complicated in this paper by bringing in yet another strain of

rationalist thought from another subfield of political science; American politics (Weingast and Moran

1983; Riker 1982; Zeckhauser and Pratt 1985; Abbot and Snidal 1998). While this may seem

counterproductive, the insights of American scholarship on bureaucracies and institutions has valuable

insights that fill gaps in IR rationalist though that are often used as avenues of attack by non-rationalists.

This new rationalist strain will allow for a fuller understanding of the IO’s as actors, while the IR

literature sheds light on how IO’s function as structures.

2 Not all rationalists have the same starting point, but they do have several overlapping assumptions, some exceptions include: Cooper et al 2008; and Gilpin 1981 3 Again, not all Constructivists are cut from the same cloth, examples include; Haas 1992, Cox 1969 and 1980. 4 It is also important to note that a third theoretical camp does exists, which espouses Classical Liberalism (See Young 1980 and Claude 1966). However, this theoretical perspective is not as wide spread and has been largely subsumed into the rationalist camp by Neoliberals.

5

Theory

When it comes to rationalist thought in IR, most scholars have a systemic focus. These Neo-

Systemic scholars focus on phenomena that effects all IO’s. These factors include: environmental

factors, IO influence on states, states influence on IO’s, and the IR systems impact on states (See Ness

and Bretchin 1988; Mitchell and Hensel 2007; Cooper et al 2008; Claude 1966; Guzman 2013; and

Hurrell and Woods 1995 for examples of each respectively).

However, contrary to some Constructivist scholars, rationalist perspectives can explain IO’s as

agents and structures (Duffield 2007; Barnett and Finnemore 1999). Additionally, rationalist thought can

also explain how this relationship between the IO’s (as agents and structures) and states evolves over

time. Essentially, this work rejects the argument put forth by Michael Barnett and Martha Finnemore

that there is a fundamental ontological problem in rationalism that precludes this theoretical

perspective from explaining the evolution of IO preferences (they do concede that rationalist’s can

explain the starting preferences of IO’s, which are given to them by states). What is most interesting, is

that Barnett and Finnemore acknowledge the particular strain of rationalism that has the ability to

overcome the ontological limit that they impose on systemic rationalism, principal agent theory (PAT)

(Barnett and Finnemore 1999).

The essential question then, is can the two strains of rationalism, system IR rationalism and

principal agent theory be combined to better understand IO’s and how they evolve over time?

Examining the core assumptions of both systemic IR rationalism and PAT, it would appear so. These

assumptions are outlined in Table 1.

6

Table 1: Comparison of Theoretical Assumptions

Systemic Rationalism Principal Agent Theory

Incomplete information Uncertainty Transaction costs Costly Information Free Riders Shirking Asymmetrical information Asymmetrical Information Antagonistic indifference curves Antagonistic indifference curves

Given that the major difference between Systemic Rationalism and PAT is that the assumptions

have different names (incomplete information is equivalent to uncertainty), but are virtually the same, it

seems logical to conclude that the two types of rationalism are intimately related and extensions of each

other (Barnett and Finnemore 1999; and Pratt and Zeckhauser 1985).5

If this logical assumption of near equivalency is true, then the application of PAT would allow

rationalist IR scholars to examine the actions of IO’s after the formulation phase (Barnett and Finnemore

1999). By accepting PAT, scholars of IR can also make use of organizational theories to both detect and

explain how an IO will evolve over time. This gives rationalists nearly the same leverage to study IO’s as

non-rationalists (Baumgartner 2013; Hall 1993; Padgett 1980 and 1981).

The next logical question that needs to be answered is, what exactly is PAT in the IR context?

Traditionally, PAT assumes that an organization’s success (such as an IO), regardless of size, is based on

individual actions. The problem then is how to structure a contract that induces individuals (agents) to

serve the drafter of the contract (principal). For the IR context, the principals are states and the agents

are IO’s. Given the common assumptions outlined in Figure 1, no principal can monitor the agents in a

costless manner.6 Thus, a continuum exists of the level of monitoring that is engaged in by the principal.

5 Systemic IR rationalism and PAT do employ differing levels of analysis, however. While this is a problem, as long as the appropriate theory is applied at the appropriate level of analysis, the main point established here is still important. 6 Monitoring is defined as the principal ensuring that the agent purses the goals of the principal as closely as possible.

7

With perfect monitoring on the far left and total agent discretion on the far right (Pratt and Zackhauser

1985).

For domestic applications, limited monitoring of output by agents is a perfectly acceptable

strategy for an organization. However, as there is no external authority to constrain the behavior or

punish an agent who violates the contract, this strategy is of little use to states seeking to monitor an IO.

Given that there is no external authority (i.e. world government), states are less able to deal with

entrepreneurial agents, who seek to alter the goals and processes of an IO. This makes entrepreneurial

agents more powerful in the IR context than in the domestic context. The very existence of these types

of agents also exposes another assumption of PAT, that all forms of monitoring favor the agent (Pratt

and Zackhauser 1985).

If we assume that agents in PAT are entrepreneurs, and therefore innovate, it is important to

have a fundamental understanding of why this occurs. To answer this question, and to fit it to the

unique nature of the IR context, several points from the systemic literature need to be integrated into

PAT. First, is a motive that most Neorealist’s will be immediately familiar with, survival. First, IO’s can

and do die off, so organizational survival is a powerful motivator for agents to innovate (Shanks 1996)7.

Second, is external pressure on the agents of an IO to alter its course. This usually takes the form of

advocacy group pressure (Park 2005) or environmental pressures (Ness and Bretchin 1988). However,

external pressure on an IO can be caused by the very states that created them (Claude 1966 and Hurrell

and Woods 1995). Lastly, agents seek to innovate when the IO’s indifference curves and the founding

states indifference curves are at odds with each other (Pratt and Zeckhauser 1985 and Gilpin 1981).

Turning now to the question of how agents that seek IO innovation actually create change, we

must bring in organizational theory to help us explain the mechanisms of change. According to several

7 This particular motivation is highly important given the case selected.

8

scholars, there are three methods of policy change that can be enacted by individuals (agents) at various

levels of the organization (IO). First is routine policy change. This might include such minor shifts as

altering the structure of a report published by the IO, or other low level change. At the second level, is

instrumental change, where the means used to accomplish the IO’s goals are altered by midlevel and

above managers. An example of this may include altering the data collection methods for certain

reports. At the highest level is goal changes of the IO. These usually involve large scale changes such as

the altering of the fundamental mission of the IO from say economic issues to security ones

(Baumgartner 2013; Hall 1993; Padgett 1980 and 1981). Of the three types of policy change, typically

only routine and instrumental change do not attract the attention of member states. However, in rare

circumstances it is possible for goal shifts to go unnoticed by states, and even be desired by them

(Strand and Tuman 2012).

Given these three levels of policy change, it is intuitive to add an additional layer and say that

each type of policy change occurs at a different level of the internal IO hierarchy. Routine change occurs

at the program level (the lowest level), instrumental change occurs at the cabinet level (middle level)

and goal shifts occur at the director level (highest level).8 However, any form of change at any level is

difficult to accomplish, given that the status quo is very sticky. If the status quo is acceptable to most

actors and agents involved, it will be very difficult to alter, while if the status quo is discredited, it will be

significantly easier to change (Baungartner 2013; Hall 1993; Padgett 1980 and 1981).

Taking this section as a whole, it is this interpretation of PAT that will be used to conduct the

type of case study that will be argued for in the next section. This theoretical approach will provide a

great deal of insight into the operations of the selected case under examination here; the Arctic Council.

8 The terms for each level of the IO hierarchy will vary based on the terms and structure of the IO in question.

9

Data and Methods

When it comes to qualitative work, there are many different methods, some with wider

acceptance in certain academic disciplines than others. Most scholars that find qualitative work

disagreeable, often take issue with a specific type of post-positivist or near post-positivist approach to

this type of research. This work explicitly denies this type of qualitative work and does not seek to

emulate the methods proposed by proponents of highly descriptive and unempirical qualitative work.

This work seeks to be theoretically driven, makes a priori assumption (from theory), and uses analytic

induction in its case study approach. Thus, this work departs heavily from descriptive qualitative

research (Bogden and Taylor 1998).

Other qualitative scholars argue for a method of data analysis that borders on creative

interpretation. This approach involves not taking the data at face value and actually innovating on the

data to reach conclusions about the research question or hypotheses. While to entirely reject this

approach to qualitative research is a mistake, to wholeheartedly embrace it is also inappropriate.

Instead, it is argued here for a heavily limited use of data innovation. For this work, data innovation will

be limited in such a fashion as to allow for replication. An example of this might include a small leap as

to why a section of a report is missing that can be easily traced by the reader or reviewer and does not

require the unique insight of the author to be able to make the logical jump (Hesse-Biber and Nasy

2004). In addition, all forms of data innovation in this work will be guided by theoretical insight. This is

to assist with creating as replicable qualitative work as possible.

Turning now to methods, that will be integrated instead of rejected, first is the concepts

articulated by Yin in his book (2003). Yin argues for the use of triangulation and pattern matching to

provide robust evidence for any claims put forth. Triangulation requires three or more data points to

establish a point. This establishes a standard of proof that will guide this work. Next, is pattern

10

matching, which argues that a theoretically driven case study, such as this one, needs to make use of

two theories. While Yin prefers for scholars to use two distinct theories (such as Neoliberalism and

Constructivism) he also notes that the null hypothesis can also be used as a competing theory when a

scholar employs pattern matching. This work adopts pattern matching of the null variety, as to compare

across an epistemological and ontological divide is ill advised (Yin 2003).

The points discussed so far are simply tools that can be used by any qualitative scholar, almost

regardless of approach, with Bogdan and Taylor disagreeing on this (1998). In terms of a specific

approach to qualitative work, which might be considered similar to model selection in quantitative

work, this work adopts Silverman’s Structured Approach. The Structured Approach argues for 1)

measures of variables taken from prior work, 2) explicitly defined borders of scope, 3) an explicit unit of

analysis, and 4) limited and testable hypotheses (Silverman 2005).9

In addition to using the Structured Approach to qualitative work set forth by Silverman, this

work also adopts a specific type of case study, the instrumental case study. The instrumental case study

applies theory to evidence to either provide further insight and/or to revise generalizations from prior

work.10 This fits perfectly with how this work plans to examine its own case. In addition, Silverman

argues that an N of one for a case study is perfectly acceptable based on the positivist assumption that it

will still uncover an underlying general structure (Silverman 2005).11

Given the Structured Approach to the Instrumental Case Study Method articulated by Silverman

(2005), this work also integrates the two standards of proof for qualitative evidence (triangulation and

9 The unit of analysis selected here is an individual IO, the data is limited in that only primary sources published by the Arctic Council are used as data points, and all measures of PAT are taken from prior work. 10 This type of case study was selected because it is so closely related to what quantitative work seeks to do. 11 With certain constraints based on the unique nature of the case. These will be noted when they arise in the data.

11

pattern matching). By doing so, this work hopes to contribute new evidence to the understanding of IO’s

from a rationalist perspective, and of the Arctic Council in particular (Yin 2003).

When it comes to the case selection process, however, rationalists and non-rationalists face

harsh criticism for biased selection of cases. Both are accused of selecting cases that fit the a priori

assumptions of their theory. These typically involve cases without cooperation on security issues

(Neorealist’s), cases with cooperation on economic issues (Neoliberal’s), and cases with cooperation

that cannot be accounted for under strict rationalist interpretations (Constructivist’s). This, as one might

expect, leads to very different conclusions about the impact of IO’s for each theory. Mearsheimer, for

instance, concludes they have little significance (2001), while high ranking constructivists claim that IO’s

do matter, but that neither strain of rationalism can explain the reasons for cooperation (Barnett and

Finnemore 1999). This point of biased case selection is very important and requires the utmost care.

Given the potential for biased case selection in both forms of rationalism, this work has selected the

Arctic Council as its case, specifically due to the fact that this IO does not fall into the categories of

economic IO’s usually selected by Neoliberal’s and neither does it fall into the category of security IO’s

that Neorealist’s study (Mitchell and Hensel 2007).12

The next question has to do with the data that will be employed to help this case study test its

theoretically derived hypotheses. Looking at the Arctic Council, it becomes apparent that while there is a

large amount of data on the IO, it does not cover a very large time period. As the Arctic Council was only

founded in 1996, it has not had a large amount of time like other older IO’s to publish decades upon

decades of reports on various subjects. This makes the data that is available much more conducive to

qualitative analysis over large N quantitative methods, as the sample size is too small for such work. Also

of note here, is that the data is bifurcated into two time periods. First is the 1996-2012 time-period,

12 The Arctic Council actually explicitly does not deal with matters of military security (Arctic Council 1996).

12

where no permanent secretariat existed, and second, period (2013-2016) where they did have a

permanent secretariat. This natural division in the data allows for a comparison of the two time periods.

The types of reports that the Arctic Council publishes are quite diverse and include declarations

signed by each of the 8 member states13, which are published every two years and annual reports14

among others. It is the primary source documents (declarations and annual reports) that this work will

employ to test its hypotheses (Arctic Council 1996; 1998; 2000; 2002; 2004; 2006; 2009; 2013; 2015;

Arctic Council Secretariat Annual Report 2013; Arctic Council Secretariat Annual Report 2014; Arctic

Council Secretariat Annual Report 2015). These sources are gathered from the Arctic Council’s website

(arctic-council.org).

Given the theory outlined above, and the data just discussed, several hypotheses are

immediately apparent. The first hypothesis deals with the principal-agent relationship as the Arctic

Council has evolved over time:

Hypothesis #1: The Principal-Agent problem has become more apparent since the establishment of the Arctic Council’s permanent Secretariat in 2013.

From this hypothesis, it can be assumed that given organizational theory, there should be a

noticeable difference in three areas 1) rules and regulations being modified by the secretariat, 2) new

means being adopted to solve problems and thus innovate, and 3) new or shifting goals for the IO. These

three changes, and the concept of monitoring lead to the other hypotheses of this work:

Hypothesis #2: In the 1996-2012 period, IO evolution will be state driven and subject to higher levels of monitoring.

Hypothesis #3: In the 2012-2016 period, IO evolution will be internally driven by the secretariat, and subject to lower levels of monitoring.

13 Canada, Denmark, Finland, Iceland, Norway, Russia, Sweden and the United States 14 Post 2012 only.

13

The first hypothesis can be regarded as a test of more general change over the entire lifespan of

the Arctic Council, while the second and third hypotheses can be regarded as assumptions on where the

source of the IO evolution is located and how monitoring should be understood given this source of

evolution.

Case Study: The Arctic Council

Before diving into the data and examining the points that either support or disprove the

hypotheses outlined in the previous section, it is important to note up front the unique characteristics of

the Arctic Council. When looking at IO’s in general, the Arctic Council has four unique characteristics.

The first of these in that the Arctic council is heavily focused on the issues of the indigenous people of

the Arctic.15 This emphasis can be found in the Arctic Council’s charter document, the Ottowa

Declaration (Arctic Council 1996), where the first substantive issue noted is indigenous issues. Second, is

the emphasis on science that can also be found in the Ottowa Declaration. In several places, this

document notes that scientific practices should influence the IO.16 This potential influence of scientific

methods adds a unique technocratic element to the Arctic Council, and poses possible issues for PAT,

assuming the top state bureaucrats are not trained in the natural or social sciences.

Third, is that the Arctic Council is specifically barred from dealing with issues of military security.

This point is noted in the only footnote present in the Ottowa Declaration, and has been emphasized in

the literature very heavily due to its oddity (See Byers 2010 for an example). This provides for the

removal of a large segment of issues and helps to differentiate the Arctic Council from other IO’s.17

15 While other IO’s may deal with indigenous people, the Arctic indigenous face unique challenges due to the climate, spatial distribution, and cultural traditions. 16 According to Yin (2003), this point cannot be triangulated successfully within the Ottowa Declaration, as it is only noted twice. 17 The barring of security issues from the Arctic Council helps to justify its selection as a case, because a rationalist scholar would avoid just such a case according to Mitchell and Hensel (2007).

14

Lastly, the Arctic Council does not allow non-regional states to become members of the council.

Only the so called “Arctic 8” are allowed to be members. While other IO’s have attempted to similarly

restrict membership (most notably the African Development Bank), the Arctic Council has held firm to

this commitment for twenty years (Arctic Council 1996; and Strand 2013). This is likely due to the

structure of the IO, in that it allows for other types of members, such as Permanent Participants,18 and

Observers,19 which allows for other parties and states to be present, but not at the same level as the

Arctic 8 (Arctic Council 1996).

The 1996-2012 Period (Pre-Permanent Secretariat)

Beginning first with the 1996 Ottowa Declaration, the founding document where the Arctic

Council is established, there are two pieces of evidence that support state driven evolution and the

same number that support IO driven evolution. In terms of the state, it is very clear that the Arctic 8 can

choose a division of the temporary secretariat to house on their own soil. This, combined with the fact

that all decisions made by the newly created Arctic Council must be by consensus indicates that states

have a large amount of influence over the Arctic Council at this time (Arctic Council 1996). For IO’s,

looking at the Ottowa declaration, it is only 5 pages long. This seems to indicate that the IO has a

significant amount of ambiguity which could be used to its advantage in the future. Second, the same

declaration calls for the Arctic Council (AC) to absorb the Arctic Environmental Protection Strategy

(AEPS) a predecessor IO. This seems to present a chance for the AC to potentially innovate when

incorporating the guts of this old IO. While these points for the 1996 declaration are fascinating, they do

not number three for either side (state or IO), and thus do not pass the triangulation test as set down by

Yin (2003; and Arctic Council 1996).

18 Usually an indigenous group. 19 Observers can be non-Arctic States, non-governmental organizations, and other IO’s.

15

In the Iqaluit Declaration (1998), however, there are three pieces of evidence in favor of state

power, and thus we can conclude that for at least 1998-2000, the AC was subject to state whims. This

evidence includes that the AC asked for money from the states on two separate occasions, and that the

AC received some of this funding from a non-member state [Greenland] (Arctic Council 1998).

For the 2000- 2002 period covered by the Barrow Declaration, again the evidence does not pass

the triangulation test (for either side). However, there is the creation of the Arctic Council Action Plan to

Eliminate Pollution of the Arctic (ACAP), which was only supposed to exist for two years. It is now in its

16th year of existence (Arctic Council 2000).

The Inari Declaration (2002-2004), however, presents four points of evidence that indicates

states exercised more control over the AC. Thus, the principals were favored in this time period. The AC

asked for funding twice, the states provided targeted funding, and targeted administrative support only

to sections of the AC that they saw as fitting well with their indifference curves (Arctic Council 2002;

Gilpin 1981).

Oddly, in the Reykjavik Declaration (2004-2006), we see a reversal of the state driven evolution

trend in favor of the IO driven equivalent. While the AC does ask for funding in two separate sections, it

also mentions giving out money for the first time. Additionally, the declaration states that permanent

participants can provide funding to work groups, and also calls for these same participants to be more

involved. Most notably, the AC offers its first condemnation of an outside IO, when it criticizes the EU’s

Northern Dimension Action Plan. This evidence seems to conclude that the 2004-2006 period favored

the agents and not the principals, given that four of the above mentioned data points favor the agents

[based on triangulation standards] (Arctic Council 2004; and Yin 2003).

This agent friendly trend ceases in the Salekhard Declaration (2006-2009). With the AC asking

for funding a total of three separate times (a record high) and the inclusion of Spain as an observer,

16

supporting principal driven evolution. However, such evidence is off set. This off setting evidence

includes; the AC partnering with two other IO’s (the UN and the Barrents Euro-Arctic Council), calling on

its member states and internal secretariats to engage in further action, and most importantly, the AC

develops and implements new means for internal projects. As both possible interpretations are

supported by triangulated evidence, it seems appropriate to conclude that neither the principals or the

agents held sway in this time period (Arctic Council 2006; Yin 2003).20

Following this tie between the influence of the principal and the agents, the evidence in the

Trosmo Declaration (2009-2011) firmly supports the return of agents as dominant drivers of evolution.

While the AC does ask for funding in two places (evidence that states still have financial control), this

evidence does not pass the triangulation test. The agent evidence, does pass this test however. The AC

creates the Arctic Council Project Support Instrument (PSI) which is a mechanism to help the IO in

gaining necessary funds to operate (allowing it to be less reliant on state funds). Also, the AC also begins

to cooperate with another IO (the International Maritime Organization) and begins to hold Deputy

Minister level meetings between the larger state led Minister meetings held every two years.21 Based on

this evidence, the 2009-2011 time-period favors the agent over the principal (Arctic Council 2009).

The last Declaration by the AC before the establishment of the permanent secretariat in Tromso

Norway in 2013, is the Nuuk Declaration (2011-2013). In this declaration, it can be seen the preparatory

steps leading up to the formation of the permanent secretariat. Looking at the overall stylistic changes

(font, format, etc.) of the Nuuk Declaration shows a large leap in the level of professionalism of the AC.

Prior reports did not have the level of professionalism that is found in this report. Also, this declaration

notes the first binding agreement on member states created by the AC, the Agreement on Cooperation

20 Despite efforts on both sides. 21 This is a rather large shift, as the Minister Meetings all involve high ranking state officials, while the Deputy Minister meetings do not.

17

in Aeronautical and Maritime Search and Rescue in the Arctic (AMSRA). This marks the first time that the

consensus decision rule has ever been altered since its creation in 1996. Thus a slight shift in the goals of

the IO does seem to have occurred in this time period. However, state power does rear its ugly head in

this declaration as well. Again, we see the AC asking states for additional funding. Most importantly

however, the Nuuk declaration is the first time that non-member states sign the declaration. So these

states seem to have bent the AC to their indifference curves.22 Despite all this evidence, neither the

principal or the agent has the three data points necessary for triangulation (Yin 2003). Therefore, this

time period is declared a draw, as neither the principals of the agents can clearly be determined as the

source of evolution (Arctic Council 2011).

Table 2: Summary of Declarations

Declaration Favored (Principal or Agent)

Ottowa Declaration (1996-1998) Unclear*

Iqaluit Declaration (1998-2000)** Principal

Barrow Declaration (2000-2002) Unclear

Inari Declaration (2002-2004) Principal

Reykjavik Declaration (2004-2006) Agent

Salekhard Declaration (2006-2009) Tie

Tromso Declaration (2009-2011) Agent

Nuuk Declaration (2011- 2013) Tie

Arctic Council (1996-2011) *Unclear refers to the inability to triangulate from the data. **The Iqaluit Declaration also refers to a later declaration in 2015

Looking at Table 2 above, it becomes possible to understand the evolution of the principal agent

relationship as it has evolved in the pre-permanent secretariat period. Based on the table, it seems

logical to conclude that until 2004 the principals were fairly successful at monitoring the AC and

22 These states include Greenland and the Faroe Islands. This claim is at best imperfect, as the signature page of the previous declaration, the Tromso Declaration, was not properly scanned and is illegible.

18

curtailing its entrepreneurial agents. From 2004 onward however, it appears that the agents have found

a way to circumvent the authority of the Arctic 8, and begin to alter the course of the AC. The next

section will turn to examine the period after the formation of the permanent secretariat and attempt to

use additional data to delve deeper into the more recent years of the AC (Arctic Council 1996; 1998;

2000; 2002; 2004; 2006; 2009; 2011).

2013- 2016 Period (Post Permanent Secretariat)

While the time period covered in this section is much shorter than in the previous one, the

amount of data related to this period is significantly larger. This section will examine the two

declarations (Kiruna and Iqaluit) that cover this time period, as well as the three annual reports released

by the permanent secretariat [2013, 2014, and 2015] (Arctic Council 2013; Arctic Council 2015; Arctic

Council Secretariat Annual Report 2013; Arctic Council Secretariat Annual Report 2014; Arctic Council

Secretariat Annual Report 2015).

Looking at the Kiruna Declaration (2013-2015), it becomes immediately apparent that the

agents dominated this period of evolution. This declaration notes the passing of the second binding

agreement on the Arctic 8, the Agreement on Cooperation on Marine Oil Pollution Preparedness and

Response (MOPPR). In addition, the Arctic Council Secretariat (ACS) calls on member states to commit to

various types of action on three specific occasions (a record high) and the ACS notes an exception to the

normal rules established for observers to allow for the EU to be an observer, despite that its status has

not been confirmed by the AC. Most importantly, however, is that the Indigenous Peoples Secretariat

(IPS) relocating to Tromso Norway where the ACS is now permanently located. These four points more

than pass the needed evidence for triangulation. Thus, the 2013-2015 period favors the agent according

to this one data source (Arctic Council 2013).

19

Based on the Arctic Council Annual Report from 2013, there appears to be a tie between agent

and principal driven evolution. Based on this report, both agents and principals both pass the

triangulation test, but by the same margin (4/4). Looking at the evidence that favors the agent, we see

that the AC is both altering reports by subordinate units and monitoring these units for the first time.

This is accomplished via the implementation of a Tracking Tool that allows the ACS to know what the

Work Groups and other smaller secretariats are doing. Thus allowing the ACS to possibly alter the

outputs of these units. Additionally, the two work groups that are not currently housed by one of the

Arctic 8, the Arctic Contaminant Action Program and the Emergency Prevention, Preparedness and

Response (ACAP and EPPR respectively) are integrated into the ACS and fully under its control (Arctic

Council Secretariat Annual Report 2013). Based on this evidence, it appears that the agents are favored

in the 2013 annual report.

The 2014 annual report however, tells a slightly different story. Looking at the evidence, it

appears that neither the principal or the agents can claim supremacy. Given that the states impose tasks

on the ACS, that the ACS must submit estimated costs for any project, that Norway funds the Deputy

Director position, and that the states are dolling out more funds that in 2013, it would appear that the

states (principals) have a solid case. But, looking at the agent evidence, which includes items such as; the

ACS develops the agendas for ACAP and EPPRS, and the ACS also keeps calendars for the other Working

Groups (WG’s). Couple the previous evidence with the rising salary expenses from 2013 (from $299,296

to $470,506 in 2014), which hints at an increased institutionalization, one is also tempted to conclude

that the agents have the upper hand. Based on triangulation, however, both sides have merit.

Therefore, based on the 2014 annual report, it must be concluded that the principals and the agents are

tied in driving the IO’s evolution (Arctic Council Secretariat Annual Report 2014).

20

The Iqualuit Declaration23 (2015- Present), shows a continuation of the favorable environment

to agent driven evolution. This declaration notes the beginning work on a third binding agreement on

scientific cooperation.24 Also the ACS calls for an increase in its own power, which is a very definitive

mark that the agents are experiencing less monitoring. Of note here as well, is that the ACS defers the

normal process of ruling on new or reapproving observer status (who to add, subtract, or what not) until

the year 2017. This marks a change in how an instrumental level policy is applied. Lastly, on the

signature page, which up until this point had only included state representative’s signatures (and two

non-members) now also includes the signature of the ACS Chair. These four points indicate that the

2015- present time period has an agent focus (Arctic Council 2015).

The results from the second Iqualuit Declaration, are not consistent with the data from the 2015

annual report. In the 2015 report several data points indicate that the agents are favored. First, the

Indigenous Peoples Secretariat (IPS) relocates to the ACS headquarters in Norway. Second, the ACS

creates a new type of unit, the Expert Groups (EG’s) who are composed mostly of academics, which

amounts to instrument change. And Lastly, the ACS assists states with drafting agendas for meetings.

The evidence in support of the principals shows enough evidence to also pass the triangulation test.

First, the US calls an unscheduled early meeting of the member states. Second, Norway volunteers to

build the ACS a new office building. And thirdly, state contributions rise to $99,312 per state. All three of

these points indicate that both sides are exercising power on and within the AC (Arctic Council

Secretariat Annual Report 2015; Baumgartner 2013; Hall 1993). The results of this time period are

summarized in Table 3 below.

23 The Iqaluit Declaration has been drafted in two separate years, 1998 and 2015. 24 Data on this particular agreement is currently password protected and very minimal.

21

Table 3: Summary of Declarations and Annual Reports

Declaration/Annual Report Favored (Principal or Agent)

Iqualuit Declaration (2013-2015) Agent

Arctic Council Annual Report (2013) Agent

Arctic Council Annual Report (2014) Tie

Arctic Council Annual Report (2015) Tie

Arctic Council (2013-2015)

Results

Based on the data showcased in the previous section and summarized in Tables 2 and 3, it

appears that the original three hypotheses put forth in the Data and Methods section need to be

revised. The first hypothesis stated that 2013 should be the year that the Principal/Agent problem

shifted to benefit the agent evolution more than principal evolution. However, based on the data, it

appears that this occurred much earlier than expected. After about 9 years of existence, in 2004, the

relationship seems to switch to benefit the agent more than the principal. This is quite fascinating, as

this occurs 9 years before the actual creation of the permanent secretariat in 2013. At around this time

it also appears that there is a distinct dip in monitoring that allows for this relationship between the

Arctic 8 and the AC to evolve. This result indicates that a period of roughly a decade is needed for the

Principal/Agent problem to fully become established in an organization. This merits further testing with

other cases. (Arctic Council 1996; 1998; 2000; 2002; 2004; and Pratt and Zeckhauser 1985).

The second hypothesis stated that the period pre-permanent secretariat (1996-2012) should be

subject to high monitoring and most of the change in the AC would be driven by the Arctic 8. Again, this

hypothesis was mostly correct, except that the end year was not 2012, but 2004. In the period 1996-

2004, there is still a high level of monitoring and mostly state driven evolution. However, after the year

2004, the level of monitoring drops, which allows for internal IO driven evolution to manifest. The third

hypothesis is mostly the same as the second, except that the start year of the lower levels of monitoring

22

begins to occur post 2004, not post 2012 (Arctic Council 2004; 2006; 2009; 2011; 2013; and Arctic

Council Secretariat Annual Report 2013; Arctic Council Secretariat Annual Report 2014; Arctic Council

Secretariat Annual Report 2015).

What is most fascinating, is that any time the monitoring becomes low enough for the agents to

begin to alter the course of the AC, the next time period is followed by a rise in monitoring by the states

(principals) or at least a moderate reaction by the states.25 The only exception here is the most recent

years of 2014 and 2015, which display contrary evidence on whether or not this two-year period favored

agent evolution or is a resurgence of monitoring. This finding presents an interesting piece that helps to

further explain PAT. It is likely that findings such as this are not uncommon in both domestic and

international organizations. Thus, the general patterns in this AC data could hold large implications for

the study of IO’s and the study of firms/organizations in general. It falls to other scholars to begin testing

this relationship further (Arctic Council 2013; 2015; Arctic Council Secretariat Annual Report 2014; Arctic

Council Secretariat Annual Report 2015).

Conclusion

Taking a step back from the minutia of the case study section, it is important to return briefly to

the larger argument outlined in the theory section. Looking at the discipline of IR through the concepts

developed by Ruggie (1995), the discipline can be divided into two theoretical camps; systemic

rationalists and non-systemic focused constructivists (See Park 2005; Barnett and Finnemore 1999; Haas

1992; Cox 1969; Cox 1980 for Constructivist scholarship; See Hurrell and Woods 1995; Cooper et al

2008; Claude 1966; Mitchell and Hensel 2007; and Ness and Brechin 1988 for systemic rationalism). The

authors of both sides argue that their chosen theory is better for explaining the realities for IO’s. While

25 A moderate reaction is signified by a tie in Table 2 and Table 3.

23

this paper does not conclude that one theory is better than the other, it does argue that rationalism can

be applied at a lower level of analysis.

Taking the rationalist Principal Agent theory from American politics scholarship and modifying it

slightly, presents a unique avenue for rationalists (not necessarily systemic ones) to study IO’s in a

similar manner as constructivists do. This allows for the work of both theories to be better compared

and contrasted, which will hopefully lead to some level of falsification (Pratt and Zeckhauser 1985).

While the application of PAT in the IR context may run against the grain for some IR scholars, given the

definition of IO’s selected here, PAT is the logical choice when attempting to look under the hood of the

AC, or any IO (Duffield 2007). To assist with the data and hypothesis testing, organizational theory was

mixed with PAT to provide a guide as to when the principal or the agent is currently favored due to the

level of monitoring (Baumgartner 2013; Hall 1993; Padgett 1980 and 1981).

Given the chosen theory and the theoretically informed metrics of IO change (via organizational

theory), it became possible to examine data on the AC and to pinpoint when the relationship favored

the principal or the agent. Based on the data, evidence of all three types of organizational change were

found at each level of organizational hierarchy, up to and including two instances of goal change,

signified by the implementation of two binding agreements on the eight member states (Arctic Council

1996; 1998; 2000; 2002; 2004; 2006; 2009; 2011; 2013; 2015; Arctic Council Secretariat Annual Report

2013; Arctic Council Secretariat Annual Report 2014; Arctic Council Secretariat Annual Report 2015;

Padgett 1980 and 1981).

Even given the wide spread and hierarchically diverse amount of change found in the data, it

was still possible to locate a cut point between a period of high levels of monitoring that favored

principal evolution and lower level’s that favored agent evolution. While the originally proposed

hypotheses were essentially incorrect in estimating this cut point at 2013, the spirit of the hypotheses

24

was still found in the data but several years earlier than expected in 2004. This first finding also points to

a more general point about PAT, that it may take approximately a decade for the principal agent

relationship to fully unravel and favor the agent, in the Arctic Council context (Arctic Council 1996; 1998;

2000; 2002; 2004; 2006; 2009; 2011; 2013; 2015; Arctic Council Secretariat Annual Report 2013; Arctic

Council Secretariat Annual Report 2014; Arctic Council Secretariat Annual Report 2015). Future work in

IR or in other subfields of political science will need to verify this finding with more qualitative and

quantitative work on other IO’s.

The most interesting trend found in the data is that most periods of low monitoring that favored

the agent were followed by a period of higher monitoring by the principals. With only one exception,

this general trend holds for the entire existence of both the AC and the ACS. While the ties in the data

do indicate that both the agent and the principal are attempting to either increase or decrease the level

of monitoring, they do at least indicate that the principals are aware of decreases in monitoring levels

and they seek to alter this in the next two-year period (Arctic Council 1996; 1998; 2000; 2002; 2004;

2006; 2009; 2011; 2013; 2015; Arctic Council Secretariat Annual Report 2013; Arctic Council Secretariat

Annual Report 2014; Arctic Council Secretariat Annual Report 2015). This trend hints at a possible battle

over the level of monitoring that the agent receives. This finding merits further testing in other

organizational contexts and with other methodological approaches. Further work on the Arctic Council

may seek to examine the periods where the agents and the principals seem to be renegotiating the level

of monitoring, as these instances may have further implications for PAT, and may need a more nuanced

treatment than given here.

25

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