Financial crises underline the necessity for more effective global governance. Despite the creation of the Basel II Accord, no agreement has been reached on the reform of the International Monetary Fund (IMF). Why do governments only selectively agree to reform global governance? I argue that convergence and divergence of governmental positions cannot be explained solely by the logic of the international system, institutions or globalization. Instead, they strongly reflect domestic ideas and interests. Furthermore, the ability of governments to compromise internationally is influenced by the different impact of domestic ideas and interests. With regard to their prevalence in domestic preference formation, ideas prevail when governance affects lobby groups diffusely and poses fundamental questions on the role of politics in governing the economy. Interests prevail when lobby groups are affected directly and new governance concerns a specific distribution of costs. These arguments are tested on the preference formation of the United States and German governments on the IMF and Basel II.
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