The World Bank is not an institution with a reputation for being a leading light in much outside banking, although it is acknowledged as being well stocked with very bright and highly educated people. One of its economists has just hit the headlines for providing a new proof of Pythagoras’ theorem – the one about isosceles triangles (check Wikipedia if you need to know more).
The proof was first provided some 2,600 years ago of course, by Pythagoras, but not quite in this way apparently. The economist concerned did it just for fun. It’s that sort of organisation, the World Bank, staffed by that sort of person. Now the Bank has turned its attention to procurement as an issue, one that is arguably more pressing in importance, although probably as arcane as mathematical proofs to most people.
The first major changes to the Bank’s procurement regime since the 1970s were approved by the Board in July after a three year consultation. With its US$44bn budget being spent across almost 180 mostly war torn, famine ravaged underdeveloped countries, supporting major infrastructure projects like the Panama Canal expansion, the changes could have major impacts on the lives of millions; so the Bank has to be sure it gets things right. At best it might also be hoped to have produced some pointers for procurement professionals in developed countries like the UK, where procurement is also under the spotlight like never before.
The changes support a desire to move from a one size fits all procurement approach that the Bank parachutes into all countries and projects that it helps fund, into a country and context specific approach. The idea is to work through countries’ own procurement systems, working with them to upgrade their processes as required. Easier said than done though.
A key hope for the new procurement regime is that it will act as a catalyst for improving integrity and accountability of procurement in the countries where the Bank operates.
Bribery legislation has had an impact on the behaviour of western companies, who complain privately that they are not winning contracts in some regions because they don’t pay bribes. The World Bank is aware that attracting a healthily broad range of tenderers for projects can be difficult because some potential bidders are being scared away by the fear that their bid costs will be wasted because of corruption.
The new procurement strategy is not being seen as doing much to change this and there are fears that it could make the situation worse as in the name of cost cutting some projects regarded as low risk will not be scrutinised as carefully as before. Others however will be subjected to a more continuous audit, which is where hopes for improvement are pinned.
Can the World Bank crack the problem of bribery and corruption with this procurement overhaul alone? The problem would tax the wisdom of all the philosophers and mathematicians from the ancient Greeks until the present day. Reducing the opportunities for bribery and corruption in procurement at the same time as cutting the costs of the regime could prove to be an impossible circle to square – but the Bank has the staff who just might find a way to do that.
Nick Barrett
Editor