The Review of International Organizations

, Volume 12, Issue 2, pp 255–279 | Cite as

The politics of contract allocation in the World Bank

Article

Abstract

Scholarship on informal politics in multilateral aid organizations investigates all stages of the allocation process - from project identification to aid disbursement and project evaluation. Yet, one area remains almost entirely overlooked in the literature - allocation of aid-financed contracts. This article aims to address the shortcoming of the existing research and develops a theory of contract allocation in a prominent multilateral aid organization – the World Bank. The theoretical argument explores the relationship between formal procurement arrangements and recipients’ control over contract allocation, and the role of this relationship in explaining patterns of contract allocation. My empirical analyses using data on the World Bank’s contracts provide evidence of recipients’ ability to allocate contracts in favor of domestic companies, as well as bilateral aid donors.

Keywords

World Bank Multilateral aid Procurement 

JEL classifications

F35 F53 F55 F59 

Supplementary material

11558_2017_9272_MOESM1_ESM.dta (26.8 mb)
ESM 1(DTA 27425 kb)
11558_2017_9272_MOESM2_ESM.do (2 kb)
ESM 2(DO 2 kb)

References

  1. African Development Bank. (2015). Procurement policy for Bank Group funded operations. Abidjan, Cote d’Ivoire. http://www.afdb.org/fileadmin/uploads/afdb/Documents/Policy-Documents/Procurement_policy_for_bank_group_funded_operations.pdf.Google Scholar
  2. Asian Development Bank. (2015). Procurement Guidelines. Manila, Philippines. https://www.adb.org/sites/default/files/institutional-document/31482/procurement-guidelines-april-2015.pdf.
  3. Alesina, A., & Dollar, D. (2000). Who gives foreign aid to whom and why? Journal of Economic Growth, 5(1), 33–63.CrossRefGoogle Scholar
  4. Bailey, M. A., Strezhnev, A., & Voeten, E. (2017). Estimating Dynamic State Preferences from United Nations Voting Data. Journal of Conflict Resolution, 61(2), 430-456.Google Scholar
  5. Balassa, B. (1965). Trade liberalization and ‘revealed’ comparative advantage. The Manchester School of Economics and Social Studies, 33(2), 99–123.CrossRefGoogle Scholar
  6. Bennett, D. Scott, and Allan Stam. (2000). EUGene: A Conceptual Manual. International Interactions 26:179–204. Website: http://eugenesoftware.org.
  7. Branco, F. (1994). Favoring domestic firms in procurement contracts. Journal of International Economics, 37(1), 65–80.CrossRefGoogle Scholar
  8. Carter, D. B., & Stone, R. W. (2015). Democracy and multilateralism: the case of vote buying in the UN General Assembly. International Organization, 69(1), 1–33.Google Scholar
  9. Copelovitch, M. (2010). Master or servant? Agency slack and the politics of IMF lending. International Studies Quarterly, 54(1), 49–77.CrossRefGoogle Scholar
  10. Dreher, A., Nunnenkamp, P., & Thiele, R. (2008). Does US aid buy UN General Assembly votes? A disaggregated analysis. Public Choice, 136(1), 139–164.Google Scholar
  11. Dreher, A., Nunnenkamp, P., & Thiele, R. (2011). Are ‘new’ donors different? Comparing the allocation of bilateral aid between nonDAC and DAC donor countries. World Development, 39(11), 1950–1968.CrossRefGoogle Scholar
  12. Dreher, A., & Fuchs, A. (2015). Rogue aid? An empirical analysis of China's aid allocation. Canadian Journal of Economics, 48(3), 988–1023.CrossRefGoogle Scholar
  13. Faini, Riccardo and Enzo Grilli. (2004). Who Runs the IFIs? CEPR Working Paper No. 4666.Google Scholar
  14. Kaufmann, D., Kraay, A., & Mastruzzi, M. (2011). The worldwide governance indicators: Methodology and analytical issues. Hague Journal on the Rule of Law, 3(2), 220–246.CrossRefGoogle Scholar
  15. Kilby, C. (2006). Donor influence in multilateral development banks: The case of the Asian Development Bank. Review of International Organizations, 1(2), 173–195.CrossRefGoogle Scholar
  16. Kilby, C. (2011). Informal influence in the Asian Development Bank. Review of International Organizations, 6(3–4), 223–257.CrossRefGoogle Scholar
  17. Kuziemko, I., & Werker, E. (2006). How much is a seat on the security council worth? Foreign aid and bribery at the United Nations. Journal of Political Economy, 114(5), 905–930.CrossRefGoogle Scholar
  18. Lasswell, H. (1936). Politics: Who gets what, when, how. New York: McGraw-Hill.Google Scholar
  19. Martin, S., Hartley, K., & Cox, A. (1999). Public procurement directives in the European Union: A study of local authority purchasing. Public Administration, 77(2), 387–406.CrossRefGoogle Scholar
  20. McLean, E. V. (2012). Donors' preferences and agent choice: Delegation of European development aid. International Studies Quarterly, 56(2), 381-395.Google Scholar
  21. McLean, E. V. (2015). Multilateral aid and domestic economic interests. International Organization, 69(1), 97–130.CrossRefGoogle Scholar
  22. Michaelowa, K. (1997). Bestimmungsfaktoren liefergebundener Entwicklungshilfe - eine politökonomische Analyse (Factors Determining Tied Aid - A Public-Choice Approach). Zeitschrift für Wirtschafts- und Sozialwissenschaften, 4, 603–622.Google Scholar
  23. Milner, H. V. (2006). Why multilateralism? Foreign aid and domestic principal-agent problems. In D. G. Hawkins, D. A. Lake, D. L. Nielson, & M. J. Tierney (Eds.), Delegation and agency in international organizations (pp. 107–139). Cambridge: Cambridge University Press.CrossRefGoogle Scholar
  24. Miyagiwa, K. (1991). Oligopoly and discriminatory government procurement policy. The American Economic Review, 81, 1320–1328.Google Scholar
  25. Morrissey, O. (1993). The mixing of aid and trade policies. World Economy, 16(1), 69–84.CrossRefGoogle Scholar
  26. Neumayer, E. (2003a). Do human rights matter in bilateral aid allocation: A quantitative analysis of 21 donor countries. Social Science Quarterly, 84(3), 650–666.CrossRefGoogle Scholar
  27. Neumayer, E. (2003b). The determinants of aid allocation by regional multilateral development banks and United Nations agencies. International Studies Quarterly, 47(1), 101–122.CrossRefGoogle Scholar
  28. Nielson, D. L., & Tierney, M. J. (2003). Delegation to international organizations: Agency theory and World Bank environmental reform. International Organization, 57(2), 241–276.CrossRefGoogle Scholar
  29. Rickard, S. J., & Kono, D. Y. (2013). Think globally, buy locally: international agreements and government procurement. Review of International Organizations: 1–20.Google Scholar
  30. Schneider, C. J., & Tobin, J. L. (2013). Interest coalitions and multilateral aid allocation in the European Union. International Studies Quarterly, 57(1), 103–114.CrossRefGoogle Scholar
  31. Schneider, C. J., & Tobin, J. L. (2016). Portfolio similarity and international development aid. International Studies Quarterly, 60(4), 647-664.Google Scholar
  32. Schoultz, L. (1982). Politics, economics, and US participation in multilateral development banks. International Organization, 36, 537–574.CrossRefGoogle Scholar
  33. Stone, R. W. (2002). Lending credibility. Princeton: Princeton University Press.CrossRefGoogle Scholar
  34. Stone, R. W. (2004). The political economy of IMF lending in Africa. American Political Science Review, 98(4), 577–592.CrossRefGoogle Scholar
  35. Stone, R. W. (2008). The scope of IMF conditionality. International Organization, 62, 589–620.CrossRefGoogle Scholar
  36. Stone, R. W. (2011). Controlling institutions: International organizations and the global economy. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
  37. Strange, A. M., Dreher A., Fuchs, A., Parks, B., & Tierney, M. J. (2015). Tracking under-reported financial flows: China’s development finance and the aid-conflict nexus revisited. Journal of Conflict Resolution. doi:10.1177/0022002715604363
  38. Thacker, S. C. (1999). The high politics of IMF lending. World Politics, 52(1), 38–75.CrossRefGoogle Scholar
  39. Tierney, M. J., Nielson, D. L., Hawkins, D. G., Timmons Roberts, J., Findley, M. G., Powers, R. M., Parks, B., Wilson, S. E., & Hicks, R. L. (2011). More dollars than sense: Refining our knowledge of development finance using AidData. World Development, 39(11), 1891–1906.CrossRefGoogle Scholar
  40. Trionfetti, F. (2000). Discriminatory government procurement and international trade. The World Economy, 23(1), 57–76.CrossRefGoogle Scholar
  41. U.S. House. (2011). The impact of the World Bank and multilateral development banks on U.S. job creation. Subcommittee on International Monetary Policy and Trade of the Committee on Financial Services. 112th Cong., 1st sess., 27 July.Google Scholar
  42. Vagstad, S. (1995). Promoting fair competition in public procurement. Journal of Public Economics, 58(2), 283–307.CrossRefGoogle Scholar
  43. Vreeland, J. R. (2011). Foreign aid and global governance: Buying Bretton woods – The Swiss-bloc case. Review of International Organizations, 6(3), 369–391.Google Scholar
  44. World Bank. (2005). World Bank Group historical chronology. Washington, DC. http://siteresources.worldbank.org/EXTARCHIVES/Resources/WB_Historical_Chronology_1944_2005.pdf
  45. World Bank. (2011). Guidelines: Procurement of goods, works, and non-consulting services under IBRD loans and IDA credits & grants by World Bank borrowers. DC: Washington.Google Scholar
  46. World Bank. (2014). Guidelines: Procurement of goods, works, and non-consulting services under IBRD loans and IDA Credits & Grants by World Bank borrowers. DC: Washington.Google Scholar
  47. Younas, J. (2008). Motivation for bilateral aid allocation: Altruism or trade benefits. European Journal of Political Economy, 24(3), 661–674.CrossRefGoogle Scholar
  48. Zhang, Christine, and Jeffrey Gutman. (2015). Aid procurement and the development of local industry: a question for Africa. Brookings Working Paper 88.Google Scholar

Copyright information

© Springer Science+Business Media New York 2017

Authors and Affiliations

  1. 1.Department of Political ScienceUniversity at Buffalo, SUNYBuffaloUSA

Personalised recommendations