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A Critical Analysis of the World Bank Procurement System

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Several international entities such as the World Trade Organization, European Commission, and United Nations Commission for International Trade Law (UNCITRAL) have been concerned with building effective procurement guidelines and working frameworks to be harmonized across both national and international levels by providing an in-depth analysis of several procurement issues such as policy implementation mechanisms, the complaints review mechanism, provisions on electronic procurement or rules governing privately funded projects, and eventually fulfilling sustainable procurement goals whilst achieving best value for money.

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In spite of the perceived importance of the World Bank Procurement Guidelines, and although there are already academic literature and a vast number of documents published by the World Bank as well as by other parties interested in procurement opportunities offering guidance on the procurement procedures followed in World Bank financed projects yet still specific analysis of procurement issues in the context of World Bank-funded procurement has been given almost little to no attention in several systems. Discussing such issues in the context of World Bank procurement involves special consideration because of the status and characteristics of the organization in addition to the special nature of the relationship between the Bank, the borrower, and private parties engaged in the procurement process.

This thesis proposes to offer a critical analysis of the World Bank procurement system in two specific respects, namely binding implementation mechanisms and secondary policies. There are two main objectives in this study. The first one is to examine the current position in respect of those two issues, since there is no literature that offers a significant analysis of these points. Once it is determined what the current position is, this study will offer a critical analysis of those rules, using the methodology elaborated further below.

The critical analysis proposed as the second objective of the research aims at two main things: firstly, to identify shortcomings in the current rules and, secondly, to reflect on the arguments both for and against various probable substitute alternatives that might be implemented. The critical analysis will be based primarily on the academic literature on regulating public procurement. This critical analysis will also refer to existing experiences in national and international systems which can illustrate the problems involved in the issues analyzed in each Chapter. Solutions adopted in different procurement systems, and the reasons behind them, will be also considered when these could be regarded as embodying solutions that might provide a useful approach. The value of those possible solutions will be considered, taking into account the particular context of the World Bank rules and the justification behind the Bank’s regulation.

The method that will be adopted for achieving the proposed objectives will be primarily a comprehensive library-based study involving the analysis of primary and secondary literature. In order to complete the first objective, namely, the examination of the current rules, the researcher will look at the procurement regulations and other internal rules of the Bank relevant to each of the issues examined. This will include the World Bank’s operational policies and procedures, and also other literature drafted by the Bank or by other organizations on business opportunities in World Bank funded projects.

In order to clarify the legal framework in which the procurement rules apply, the research will also take into account international law rules. This would involve the examination of primary and secondary material applicable to international organizations and to their relationship with states and private parties. Some of the literature that will be examined are treaties that define the scope and powers of the Bank, the agreement between the borrower and the Bank and the rights and duties of third parties that are involved in the procurement process.

The methodological approach that is proposed to conduct the critical analysis will not use a predefined set of standards, since it is not the aim of the critical analysis to define a framework and assess the World Bank procurement rules against it. Instead, the research targets to examine several models found in the procurement literature which could provide for different solutions. In this context concepts adopted in national and international systems will be used as examples rather than accepted standards.

Three main procurement regulations will be used as examples of the literature in regulating public procurement: The United Nations Commission for International Trade Law Model Law on Procurement of Goods, Construction and Services; the World Trade Organization – Government Procurement Agreement, and the Procurement Directives of the European Commission.

Once it is determined what the current position is, this study will offer a critical analysis of the guidelines and suggestions for reform, based on the explicit characteristics of the World Bank procurement system.

In terms of the first subject, numerous options for establishing a complaints mechanism are considered. This study will try to offer a suggestion whereby the current system of suppliers’ grievances would be strengthened by review mechanism that is geared towards proper resolution that is binding and satisfactory to all parties involved.  

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