Export credit agencies (ECAs), private banks and the World Bank are all institutions which facilitate the construction of infrastructure projects in developing countries, which often have significant environmental ramifications. However, although all three types of institutions have also been known to acquiesce to public pressure to consider the extent of the environmental impact of their projects, export credit agencies were able to resist this pressure for 25 years, implementing environmental rules in their operations much later than did the World Bank and private banks, which introduced similar reforms within a much shorter period of time.

This dissertation explains why ECAs as public institutions were less responsive to public demands than an international organization and even private banks. The answer to this puzzle is advanced in two dimensions: one dealing with the rule-making process and the other addressing the harmonization of policies among ECAs.

In a cost-benefit analysis approach covering both dimensions, the political costs and benefits of changes to existing rules as well as the regulatory costs of these changes are considered. Political costs and benefits are considered to result from the effects of these rules on competing groups combined with the power these groups wield in the rule-making process. Regulatory costs result from changes in rules and procedures. They are especially pronounced when adaptations go beyond changes to regulatory targets and include modifications in regulations or even challenge meta-regulatory principles engrained in regulatory cultures.

Diverging speed and scope of reform among these institutions is the consequence of variations in the power of competing demands made on them and variations in the institutional contexts enabling, channeling, and constraining the power of the groups making the demands. Adopted rules reflect these power relationships.

ECA harmonization involves changes to pre-existing regulations and compromises on meta-regulatory principles. This kind of agreement is very difficult to achieve - if achieved at all. Institutional incompatibility between rules proposed by the United States and continental European regulatory cultures was a decisive obstacle to harmonization.