Last year was momentous for the international procurement arena, as several of the major multilateral development banks (MDBs) -- including the World Bank and the African Development Bank (AfDB) -- adopted significant changes to their procurement processes and procedures in efforts to increase flexibility and achieve value for money with integrity. In July 2015, the World Bank's board of executive directors approved a new procurement policy as part of a larger procurement framework described as “a once-in-a-generation systematic reform and culture change” in how the World Bank approaches procurement. The new procurement framework, which is scheduled to go into effect later this year, will affect more than 1,800 World Bank-financed projects in 172 countries with a total value of $42 billion, although ongoing projects will continue to operate under the existing framework. A few months later, in October 2015, the AfDB joined its global counterpart in adopting similar changes to its own procurement framework. Similar to the World Bank's new framework, The AfDB's reforms focus on “the achievement of value for money by borrowers based on a dynamic and differentiated fit-for-purpose approach to procurement transactions.” According to Vinay Sharma, the director of the AfDB's Procurement and Fiduciary Services Department, the AfDB's new procurement framework is expected to result in faster project completion and “over $200 million in economic benefits annually.” This FEATURE COMMENT highlights several key goals of these procurement reforms, which seek to deliver sustainable development and value for money by, among other things, increasing flexibility in procurement approaches and recognizing the importance of postaward contract management in ensuring successful project implementation.

Introduction -- A historical overview of the MDBs and the history of public procurement regulation in the World Bank -- THe MDBs and International law -- The procurement documents -- The project cycle and the procurement process -- Value for money, competition and selection procedures -- Secondary (Sustainability) concerns in MDB procurement -- Corruption in MDB funded procurement -- The aid effectiveness agenda : harmonisation, tied aid and use of country systems -- Public procurement reform and the development of procurement capacity in developing countries : the role of MDBs -- Remedies under MDB-funded procurement

The unanticipated spike in international food prices in 2007-08 hit many developing countries hard. International prices for food and other agricultural products increased by more than 100 percent between early 2007 and mid-2008. Prices for food cereals more than doubled; and those for rice doubled in the space of just a few months. The food price increases were particularly hard on the poor and near-poor in developing countries, many of whom spend a large share of their income on food and have limited means to cope with price shocks. An estimated 1.29 billion people in 2008 lived on less than $1.25 a day, equivalent to 22.4 percent of the developing world population. In addition, the Food and Agriculture Organization estimated that 923 million people were undernourished in 2007. Simulation models suggested that poverty rose by 100-200 million people and the undernourished increased by 63 million in 2008. The World Bank organized rapidly for short-term support in the crisis, launching a fast-track program of loans and grants, the Global Food Crisis Response Program (GFRP). The GFRP mainly targeted low-income countries, and provided detailed policy advice to governments and its own staff on how to respond to the crisis. The Bank also scaled up lending for agriculture and social protection to support the building of medium-term resilience to future food price shocks. The International Finance Corporation responded by sharply increasing access to liquidity for agribusinesses and agricultural traders in the short and medium term, as well as new programs to improve incentives for agricultural market participants. This evaluation assesses the effectiveness of the World Bank Group response in addressing the short-term impacts of the food price crisis and in enhancing the resilience of countries to future shocks.

Contents: (1) Intro.; (2) Overview of Multilateral Develop. Banks (MDB): Historical Background: World Bank; Regional Develop. Banks; Operations: Financial Assist. to Developing Countries: Financial Assist. Over Time; Recipients of MDB Financial Assist.; Donor Commitments and Contributions: Concessional and Non-Concessional Lending Windows; Structure and Org.: Relation to Other Internat. Institutions; Internal Org.; Effectiveness of the MDBs: Effectiveness of Foreign Aid; Bilateral vs. Multilateral Aid; (3) Authorizing and Appropriating U.S. Contrib. to the MDBs; Frequency and Process; Admin. Request for FY 2011; Congress. Oversight; U.S. Commercial Interests and ¿Country Systems¿; Proposals for Voting Reform at the World Bank. Illustrations.

This paper addresses an apparent lack of economic theory in the analysis of multilateral development bank (MDB) behavior. A simple comparative statics model that is adapted from the credit union literature is used to predict potential areas of conflict, agreement, and indifference between MDB member countries, analyze lending policies against the background of distributional conflicts, and show how various institutional reforms may improve efficiency and overall member country benefits.

This edited collection fills a significant gap in the literature by gathering contributions from the most prominent academics and practitioners of aid and procurement. It explores the economic, political and legal relationship between procurement and aid effectiveness in developing countries, and takes stock of current debates in the field. More specifically, the contributions analyse the failures and successes of current initiatives to foster effectiveness and streamline the aid procurement process, and address current themes emerging in the literature related to development, procurement and aid success. A pivotal and timely publication, Public Procurement and Aid Effectiveness will be of interest to a varied and multicultural international audience and a wide range of actors working on aid effectiveness, development, procurement and good governance initiatives in both donor and beneficiary countries.