Multilateral Development Banks: Overview and Issues for Congress

April 9, 2010 – September 13, 2023 R41170

Multilateral Development Banks:
Overview and Issues for Congress
Updated September 13, 2023
Congressional Research Service
https://crsreports.congress.gov
R41170

Multilateral Development Banks: Overview and Issues for Congress

Summary
Multilateral development banks (MDBs) provide financial assistance to developing countries in
order to promote economic and social development. The United States is a member and donor to
five major MDBs: the World Bank and four regional development banks, including the African
Development Bank (AfDB), the Asian Development Bank (AsDB), the European Bank for
Reconstruction and Development (EBRD), and the Inter-American Development Bank (IDB).
The MDBs fund primarily large infrastructure and other development projects and provide
budgetary support to governments. The MDBs provide non-concessional financial assistance to
governments of middle-income countries, private sector firms in developing countries, and some
governments of low-income countries. The MDBs also provide concessional assistance, including
grants and loans with low interest rates, to the governments of low-income countries
The Role of Congress in Shaping U.S. Policy at the MDBs
Congress plays a critical role in U.S. participation in the MDBs through funding and oversight.
Congressional legislation is required for the United States to make financial contributions to the
banks. Congress also exercises oversight over U.S. participation in the MDBs, managed by the
Department of the Treasury, through confirmations of U.S. representatives at the MDBs and
hearings. Congress also shapes U.S. policy at the MDBs through legislation. Through legislation,
Congress has directed the U.S. Executive Directors to the MDBs to advocate certain policies and
how to vote on various issues at the MDBs, issued reporting requirements for the Department of
the Treasury on issues related to MDB activities, and tied MDB funding to specific institutional
reforms.
Selected Policy Issues
There are a number of MDB policy issues and questions that Members are actively considering or
might consider during the 118th Congress, including the following examples:
• MDB reforms. Should the MDBs focus more on global issues such as climate
change? If so, how should the MDBs incorporate new issues into their
operations?
• China’s role. Should China continue to receive financial assistance from the
World Bank and the Asian Development Bank? What has been the impact of
China joining the EBRD and the IDB as a non-borrowing (donor) member
country?
• Energy policies. Should the MDBs finance nuclear power projects and/or fossil
fuel projects in developing countries?
• Russia’s membership. Given Russia’s war on Ukraine since 2022, should
Russia continue to be a member of the World Bank and the EBRD?
• Procurement policies. How should MDB procurement policies interact with the
sanctions policies of member countries? When bidding on MDB contracts, do
private U.S. firms face a level playing field against Chinese state-owned
enterprises (SOEs)?
• U.S. leadership. Should the head of the World Bank always be a U.S. citizen?
How do vacancies for U.S. representatives to the MDBs affect U.S. leadership?
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Contacts
Author Information ........................................................................................................................ 16
Acknowledgments ......................................................................................................................... 16

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Introduction
Multilateral development banks (MDBs) are international institutions that provide financial
assistance, typically in the form of loans and grants, to developing countries in order to promote
economic and social development. The United States is a member and donor to the World Bank
and four smaller regional development banks: the African Development Bank (AfDB), the Asian
Development Bank (AsDB), the European Bank for Reconstruction and Development (EBRD),
and the Inter-American Development Bank (IDB).1
Congress plays a critical role in shaping U.S. policy at these MDBs through funding and
oversight of U.S. participation in the institutions. This report provides an overview of the MDBs,
the role of Congress in formulating U.S. policy at the MDBs, and current MDB policy debates.
Creation and Evolution of the MDBs
The United States and allies created the World Bank after World War II to help finance the
reconstruction of Europe and Japan. In the 1950s-1990s, governments in key regions created
development banks to specialize in funding development projects in specific geographic regions.
While the World Bank has a near global membership, the regional banks are smaller (Table 1).
Their members include countries in the region, as well as some donor countries from outside the
region.
World Bank
The World Bank is the oldest MDB as well as the largest (by lending volumes and member
countries). The World Bank Group has three lending facilities. The first, the International Bank
for Reconstruction and Development (IBRD), was created in 1944. The IBRD provides primarily
market-based loans (often referred to as non-concessional financial assistance) to the
governments of middle-income countries. The IBRD initially focused on providing financing for
large infrastructure projects and has broadened to also include social projects and policy-based
loans. IBRD membership has grown from 28 countries in 1944 to 189 countries today.
A second lending facility, the International Finance Corporation (IFC), was established in 1955 to
extend loans and equity investments to private firms in developing countries. In 1960, at the
suggestion of U.S. officials, the International Development Association (IDA) was created to
make concessional loans (with low interest rates and long repayment periods) to the poorest
countries. IDA also now provides grants to these countries.
Regional Development Banks
The Inter-American Development Bank (IDB) was created in 1959 in response to interest among
Latin American governments for greater economic development financing and U.S. concerns

1 This report focuses on MDBs of which the United States is a member. The United States is not a member of the Asian
Infrastructure Investment Bank (AIIB), the Islamic Development Bank, the New Development Bank (whose members
include the BRICS countries [Brazil, Russia, India, China, and South Africa]), the Caribbean Development Bank, the
International Investment Bank (formed by countries of the former Eastern bloc), or the CAF (Corporacion Andina de
Fomento [CAF], the Development Bank of Latin America). This report also does not discuss the North American
Development Bank (NADBank), of which there are two members (the United States and Mexico). For more on the
AIIB, see CRS In Focus IF10154, Asian Infrastructure Investment Bank, by Martin A. Weiss. For more on the
NADBank, see CRS In Focus IF10480, The North American Development Bank, by Martin A. Weiss.
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about the spread of communism in the region.2 Consequently, the IDB has tended to focus more
on social projects than large infrastructure projects, although it began lending for infrastructure
projects as well in the 1970s.3
The Organisation of African Unity, predecessor of the African Union, created the African
Development Bank (AfDB) in 1964 and was for nearly two decades an African-only institution,
reflecting the goal of African governments to promote stronger unity and cooperation among the
countries of their region. In 1973, the AfDB created a concessional lending window, the African
Development Fund (AfDF), to which nonregional countries could become members and
contribute. The United States joined the AfDF in 1976. In 1982, membership in the AfDB non-
concessional lending window was officially opened to nonregional members.
The Asian Development Bank (AsDB) was created in 1966 to promote regional cooperation.
Similar to the World Bank, and unlike the IDB, the AsDB’s original mandate focused on large
infrastructure projects, rather than social projects or direct poverty alleviation. The AsDB’s
concessional lending facility, the Asian Development Fund (AsDF), was created in 1973. In 2017,
concessional lending was transferred from the AsDF to the AsDB, although the AsDF still
provides grants to low-income countries.
The European Bank for Reconstruction and Development (EBRD) was founded in 1991. The
motivation for creating the EBRD was to ease the transition of the former communist countries of
Central and Eastern Europe (CEE) and the former Soviet Union from planned economies to free-
market economies. Unlike the other MDBs, the EBRD has an explicitly political mandate to
support democracy-building activities. The EBRD’s financial assistance is heavily targeted on the
private sector, although the EBRD does also extend some loans to governments in CEE and the
former Soviet Union. The EBRD does not have a concessional loan window. In 2011, following
the “Arab Spring,” the EBRD expanded its geographical mandate to the southern and eastern
Mediterranean. Several countries have since joined the EBRD.4
Table 1. MDB Fast Facts
Year
President
MDB
Founded
Members
Headquarters
(Nationality)
World Bank
1944
189
Washington, DC
Ajay Banga
(United States)
African Development
1964
81
Abidjan, Ivory Coast
Akinwumi A. Adesina
Bank
(Nigeria)
Asian Development Bank
1966
68
Mandaluyong, Philippines
Masatsugu Asakawa
(Japan)
European Bank for
1991
71
London, United Kingdom
Odile Renaud-Basso
Reconstruction and
(France)
Development

2 Sarah Babb, Behind the Development Banks: Washington Politics, World Poverty, and the Wealth of Nations
(Chicago: University of Chicago Press, 2009), p. 27.
3 The IDB Group also includes the Inter-American Investment Corporation (IIC) and the Multilateral Investment Fund
(MIF), which extend loans to private-sector firms in developing countries, much like the World Bank’s IFC. In 2016,
the assets of its concessional lending window (the Fund for Special Operations) were largely transferred to the IDB’s
main (non-concessional) lending facility.
4 For example, Tunisia (2011), Lebanon (2017), Libya (2019), Algeria (2021), and the United Arab Emirates (2021, as
a non-borrowing member).
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Year
President
MDB
Founded
Members
Headquarters
(Nationality)
Inter-American
1959
48
Washington, DC
Ilan Goldfajn
Development Bank
(Brazil)
Source: CRS analysis of MDB websites and annual reports.
Structure and Organization
The World Bank is a specialized agency of the United Nations. However, it is autonomous in its
decisionmaking procedures and its sources of funds. It also has autonomous control over its
administration and budget. The regional development banks are independent international
agencies and are not affiliated with the United Nations system.
Board of Governors
The MDBs have similar internal organizational structures. Run by their own management and
staffed by international civil servants, each MDB is supervised by a Board of Governors and a
Board of Executive Directors. The Board of Governors is the highest decisionmaking authority,
and each member country has its own governor. Countries are usually represented by their
Secretary of the Treasury, Minister of Finance, or Central Bank Governor. The United States has
always been represented by the Treasury Secretary. The Board of Governors meets annually,
though it may act more frequently through mail-in votes on key decisions.
Board of Directors
While the Boards of Governors in each of the banks retain power over major policy decisions,
such as amending the founding documents of the organization, they have delegated day-to-day
authority over operational policy, lending, and other matters to their institutions’ Board of
Executive Directors. The Board of Executive Directors in each institution is smaller than the
Board of Governors. There are 25 members on the World Bank’s Board of Executive Directors,
and fewer for some of the regional development banks.
Some major donors, including the United States, are represented by their own Executive Director.
Other Executive Directors represent groups of member countries. Each MDB Executive Board
has its own schedule, but they generally meet at least weekly to consider MDB loan and policy
proposals and oversee bank activities.
Weighted Voting
Decisions are reached in the MDBs through voting. Each member country’s voting share is
generally weighted on the basis of its cumulative financial contributions and commitments to the
organization. The voting power of the United States is large enough to veto major policy
decisions at the World Bank and the IDB (Figure 1). However, the United States cannot
unilaterally veto more day-to-day decisions, such the approval of individual loans.
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Figure 1. U.S. Voting Power

Source: Figure created by CRS using MDB annual reports and financial statements.
Donor Commitments and Contributions
MDBs are able to extend financial assistance to developing countries due to the financial
commitments of their more prosperous member countries.
Non-Concessional Lending Facilities
To offer non-concessional financial assistance, the MDBs borrow money from international
capital markets and then relend the money to developing countries. MDBs are able to borrow
from international capital markets because they are backed by the guarantees of their member
governments. This backing is provided through the ownership shares that countries subscribe to
as a consequence of their membership in each bank.
Donors typically provide 5%-10% of the value of these capital share as actual payments to the
MDBs, called “paid-in capital.” They provide the rest of these shares in the form of a guarantee
that the donor stands ready to provide to the bank if needed. This is called “callable capital,”
because the money is not actually transferred from the donor to the MDB unless the bank needs
to call on its members’ callable subscriptions. Banks may call upon their members’ callable
subscriptions only if their resources are exhausted and they still need funds to repay bondholders.
To date, no MDB has ever had to draw on its callable capital.
The financial backing of their member country governments enables the MDBs to borrow money
in world capital markets at the lowest available market rates, generally the same rates at which
developed country governments borrow funds inside their own borders. The banks are able to
relend this money to their borrowers at much lower interest rates than the borrowers would
generally have to pay for commercial loans, if, indeed, such loans were available to them. As
such, the MDBs’ non-concessional lending windows are self-financing and even generate net
income.
MDB Capital Increases
Periodical y, when donors agree that future demand for loans from an MDB is likely to expand, they increase their
capital subscriptions to an MDB’s non-concessional lending window in order to allow the MDB to increase its level
of lending. This usually occurs when the economy of the world or the region has grown in size and the needs of
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their borrowing countries have grown accordingly, or in response to a financial crisis. An across-the-board
increase in all members’ shares is called a “general capital increase” (GCI). In comparison, a “selective capital
increase” (SCI) is typically small and is used to alter the voting shares of member countries.
The voting power of member countries in the MDB is determined largely by the amount of capital contributed and
through selective capital increases; some countries subscribe a larger share of the new capital stock than others to
increase their voting power in the institutions.
GCIs happen infrequently. Al the MDBs had GCIs fol owing the global financial crisis of 2008-2009; simultaneous
capital increases for all the MDBs had not occurred since the mid-1970s. In FY2020, Congress authorized U.S.
participation in a GCI for the World Bank (P.L. 116-94).
U.S. Contributions
The United States is the largest donor at the IBRD, IFC, EBRD, and IDB. The United States is
the second-largest donor to the AfDB (after Nigeria) and the AsDB (after Japan). U.S. financial
commitments to the non-concessional lending facilities varies by bank, from less than $5.0 billion
at the IFC and the EBRD to over $50 billion at the World Bank and the IDB (Figure 2).
Figure 2. Non-Concessional Lending Windows: U.S. Financial Commitments
2022

Source: Figure created by CRS using MDB annual reports and financial statements.
Concessional Lending Facilities
Concessional lending windows have generally been funded directly from the financial
contributions of their member countries. Most of the money comes from the more prosperous
countries, while the contributions from borrowing countries are generally more symbolic than
substantive. The MDBs have also transferred some of the net income from their non-concessional
windows to their concessional lending windows in order to help fund concessional loans and
grants. In 2018, IDA started issuing some bonds to finance its programs, similar to the bonds
issued by the non-concessional windows.
As the MDB extends concessional loans and grants to low-income countries, the window’s
resources become depleted. The donor countries meet together periodically, usually every three to
five years, to replenish those resources. These increases in resources are called replenishments. If
these facilities are not replenished on time, they will run out of lendable resources and have to
reduce their levels of aid to poor countries.
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U.S. Contributions
The United States is the largest donor at IDA and the AfDF, and the second-largest donor to the
AsDB (after Japan). The United States has contributed more than $55 billion to IDA since it was
created, $5 billion to the AfDF, and $4.7 billion to the AsDF (Figure 3).
Figure 3. Concessional Lending Windows: Cumulative U.S. Contributions
FY2022 (World Bank) and 2022 (other MDBs)

Source: Figure created by CRS using MDB annual reports and financial statements.
Development Projects and Financing
The MDBs have evolved to provide an array of financial assistance for developing countries.
MDB financing can address a range of development objectives, and can be utilized by a range of
actors in developing countries.
Types of Financing
MDBs provide financial assistance to developing countries, typically in the form of loans and
grants, for investment projects and budget support. Investment project financing includes large
infrastructure projects, such as highways, power plants, port facilities, and dams, as well as social
projects, including health and education initiatives. Development policy financing provides
budget support to developing countries to help borrowers address actual or anticipated
development financing requirements.
Types of Borrowers
Non-concessional and concessional assistance is generally targeted at different types of recipients
(Table 2). Non-concessional assistance, typically in the form of loans but also through equity
investments and loan guarantees, is generally extended to governments of middle-income
countries, although some creditworthy low-income countries may be eligible. Non-concessional
lending facilities are also referred to the bank’s “ordinary capital resources.” Some MDBs also
provide non-concessional financial assistance to private-sector firms in developing countries,
either from ordinary capital resources or a separate lending window. Concessional lending
facilities provide financial assistance in the form of grants or low-cost loans to the governments
of low-income countries.
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Table 2. MDB Lending Windows
Type of

Financing
Type of Borrower
Middle-
Low-
Non-
income
income
Private
MDB
concessional Concessional
govts.
govts.
sector
World Bank Group
International Bank for Reconstruction and
Development

International Development Association

International Finance Corporation

African Development Bank
Ordinary capital resources

African Development Fund

Asian Development Bank
Ordinary capital resources

Asian Development Fund

European Bank for Reconstruction and Development
Ordinary capital resources

Inter-American Development Bank
Ordinary capital resources

Source: CRS analysis of MDB websites, annual reports, and financial statements.
Amount of Financing
In 2022, the MDBs provided more than $100 billion in financial assistance to developing
countries (Figure 4). Of the total, about 80% was provided by the World Bank, and about 20% by
the regional development banks. In 2022, about 40% of the assistance were concessional loans
and grants, and about 60% were market-based loans and other types of non-concessional financial
assistance.
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Figure 4. Financial Assistance: New Commitments
FY2022 (World Bank) and 2022 (other MDBs)

Source: Figure created by CRS using MDB annual reports and financial statements.
Effectiveness of MDB Financing
Some observers have raised questions about the effectiveness of foreign aid, including the aid
provided by the MDBs. In the early 2000s, scholars conducted several broad assessments of the
impact of foreign aid on economic growth in developing countries. These studies produced
varying results, making it difficult to reach firm conclusions.5 Over the past two decades, it has
become more common for academic studies to focus on more specific assessments of foreign aid
projects and initiatives and their impact on a range of outcomes. For example, there are studies
assessing the environmental effects of World Bank funded hydropower dams, the impact of cash
transfers of educational impacts in Tanzania, the impact of World Bank policy loans on the
quality of public sector governance, and the impact of foreign aid on maternal mortality, among
numerous other studies.6
Each MDB also has an independent evaluation unit or department focused on evaluating its
development effectiveness.7 These units, which report directly to the Board of Directors, evaluate
the banks’ development projects, strategies, and policies. In 2022, policy experts at the Center for
Global Development called for more rigorous impact evaluation assessments, noting that less

5 For example, William Easterly, “Can Foreign Aid Buy Growth?,” Journal of Economic Perspectives, vol. 17, no. 3
(Summer 2003), pp. 23-48; Carl-Johan Dalgaard and Henrik Hansen, “On Aid, Growth, and Good Policies,” Journal of
Development Studies, vol. 37, no. 6 (August 2001), pp. 17-41; Craig Burnside and David Dollar, “Aid, Policies, and
Growth,” American Economic Review, vol. 90, no. 4 (September 2000), pp. 847-868.
6 Saule Baurzhan, Glenn P. Jenkins, and Godwin O. Olasehinde-Williams, “The Economic Performance of
Hydropower Dams Supported by the World Bank Group, 1975–2015,” Energies, vol. 14, no. 9 (2021); David K.
Evans, Charles Gale, and Katrina Kosec, “The Educational Impacts of Cash Transfers in Tanzania,” Economics of
Education Review, vol. 92 (February 2023); Lodewijk Smets and Stephen Knack, “World Bank Policy Lending and the
Quality of Public Sector Governance,” Economic Development and Cultural Change, vol. 67, no. 1 (October 2018);
Emmanuel Banchani and Liam Swiss, “The Impact of Foreign Aid on Maternal Mortality,” Politics and Governance,
vol. 7, no. 1 (2019).
7 Specifically, the Independent Evaluation Group at the World Bank, the Independent Development Evaluation unit at
the AfDF, the Independent Evaluation Department at the AsDB, the Office of Evaluation and Oversight at the IDB, and
the Independent Evaluation Unit at the EBRD.
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than 5% of World Bank projects have been subject to formal impact evaluation methods since
2010.8
Long-standing criticisms of the MDBs that some have expressed include, among others, that the
MDBs are large international bureaucracies focused on getting money “out the door” to
developing countries, rather than on delivering results in developing countries; that the MDBs
emphasize short-term outputs like reports and frameworks but do not engage in long-term
activities like the evaluation of projects after they are completed; and that they put enormous
administrative demands on developing-country governments.9 Many of the MDBs were also
created when developing countries had little access to private capital markets.
Proponents of the MDBs have argued that, despite some flaws, such aid at its core serves vital
economic and political functions. With 1.8 billion people living on less than $3.65 a day in 2019
(most recent estimate available),10 they argue that not providing assistance is simply not an
option; they argue it is the “right” thing to do and part of “the world’s shared commitments to
human dignity and survival.”11 These proponents typically point to the use of foreign aid to
provide basic necessities, such as food supplements, vaccines, nurses, and access to education, to
the world’s poorest countries, which may not otherwise be financed by private investors.
Proponents also argue that the MDBs provide a key role in generating and disseminating key
economic data and “lessons learned” about development projects at country, regional, and global
levels.12
Is it better to give foreign aid bilaterally or multilaterally?
There has been debate about whether U.S. policymakers should prioritize bilateral or multilateral aid.13 Bilateral
aid gives donors more control over where the money goes and how the money is spent. For example, donor
countries may have more flexibility to allocate funds to countries that are of geopolitical strategic importance, but
not facing the greatest development needs, than they might have in providing aid through a multilateral
organization. By building a clear link between the donor country and the recipient country, bilateral aid may also
garner more goodwil from the recipient country toward the donor than if the funds had been provided through a
multilateral organization.
Providing aid through multilateral organizations offers different benefits for donor countries. By pooling the
resources of several donors, multilateral organizations allow donors to share the cost of development projects
(often called burden-sharing). Additionally, donor countries may find it politically sensitive to attach policy reforms
to loans or to enforce these policy reforms. Multilateral organizations can useful y serve as a scapegoat for
imposing and enforcing conditionality that may be politically sensitive to attach to bilateral loans. Moreover,

8 Nancy Lee, Amanda Glassman, Clemence Landers, and Masood Ahmed, “Our Wish List for the World Bank’s
Evolution Roadmap,” Center for Global Development, November 7, 2022.
9 For example, William Easterly, “The Cartel of Good Intentions,” Foreign Policy, vol. 131 (July-August 2002), pp.
40-49; Eeshani Kandpal, Julia Kaufman, and Janeen Madan Keller, “The World Bank Should Harness Evidence to
Deliver Greater Impact,” Center for Global Development, June 5, 2023; Christopher Ingraham, “The Solutions to All
Our Problems May be Buried in PDFs that Nobody Reads,” Washington Post, May 8, 2014; Martin Ravallion, “The
World Bank: Why It Is Still Needed and Why It Still Disappoints,” Journal of Economic Perspectives, vol. 30, no. 1
(Winter 2016).
10 World Bank, World Development Indicators Database.
11 Jeffrey Sachs, The End of Poverty: Economic Possibilities for Our Time (Penguin Books, 2006), p. xvi.
12 Martin Ravallion, “The World Bank: Why It Is Still Needed and Why It Still Disappoints,” Journal of Economic
Perspectives, vol. 30, no. 1 (Winter 2016).
13 For more on the choice between bilateral and multilateral aid, see Helen Milner and Dustin Tingley, “The Choice for
Multilateralism: Foreign Aid and American Foreign Policy,” Review of International Organizations, vol. 8, no. 3
(2011), pp. 313-341.
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because MDBs can provide aid on a larger scale than many bilateral agencies, they can generate economies of scale
in knowledge and lending.14
According to data from the OECD, about 25% of U.S. foreign aid disbursed to developing countries with the
purpose of promoting economic and social development was provided through multilateral institutions in 2022.15
The Role of Congress
Congress plays an important role in authorizing and appropriating U.S. contributions to the
MDBs and exercising oversight of U.S. participation in these institutions.
Authorizing and Appropriating U.S. Financial Contributions
Authorizing and appropriations legislation is required for U.S. contributions to the MDBs. The
Senate Committee on Foreign Relations and the House Committee on Financial Services are
responsible for managing MDB authorization legislation. During the past several decades,
authorization legislation for the MDBs has not passed as freestanding legislation. Instead, it has
been included through other legislative vehicles, such as the annual foreign operations
appropriations act, a larger omnibus appropriations act, or a budget reconciliation bill.
The Foreign Operations Subcommittees of the House and Senate Committees on Appropriations
manage the relevant appropriations legislation. MDB appropriations are included in the annual
foreign operations appropriations act or a larger omnibus appropriations act.
Since at least the past decade, each Administration’s budget requests for the MDBs has included
three major components: funds to replenish the concessional lending windows, funds to increase
the size of the World Bank’s non-concessional lending windows (a “general capital increase,” or
GCI), and funds for more targeted funds administered by the MDBs, particularly those focused on
climate change and food security. Replenishments of the MDB concessional windows happen
regularly, while capital increases for the MDB non-concessional windows occur more
infrequently.
FY2024 Budget Request for the MDBs
For FY2024, the Biden Administration is requesting $2.29 bil ion for the MDBs, 20% more than the amount
enacted in FY2023. About 80% of the MDB budget request is for non-concessional lending facilities at the World
Bank, the African Development Bank, and the Asian Development Bank. The request also includes annual
installments toward previously negotiated, multiyear capital increases at the World Bank and the African
Development Bank, and new MDB funding initiatives at the Inter-American Development Bank and the Asian
Development Bank.16

14 Martin Ravallion, “The World Bank: Why It Is Still Needed and Why It Still Disappoints,” Journal of Economic
Perspectives, vol. 30, no. 1 (Winter 2016).
15 Organization for Economic Cooperation and Development (OECD) Development Association Committee (DAC)
Statistics. Data are for gross disbursements at current prices of official development assistance (ODA). ODA is defined
as flows to developing countries and multilateral institutions which are administered with the promotion of economic
development and is concessional in character and conveys a grant element of at least 25%.
16 For more information, see CRS In Focus IF11902, International Financial Institutions: FY2024 Budget Request, by
Rebecca M. Nelson and Martin A. Weiss, and CRS Report R47579, Department of State, Foreign Operations, and
Related Programs: FY2024 Budget and Appropriations, by Emily M. McCabe and Cory R. Gill.
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In August 2023, the Administration requested an additional $2.25 bil ion for the World Bank as part of a larger
supplemental budget request to Congress.17 The request includes $1.25 bil ion for the IBRD to leverage $25
bil ion in lending at below non-concessional rates. The Administration argues that this additional funding for the
IBRD would allow the World Bank to respond more effectively to global challenges and provide a “credible
alternative to PRC [People’s Republic of China] financing.”18 The remaining $1 bil ion would be for IDA to support
low-income countries facing a number of crises, including food insecurity and destabilizing fragility and conflict.
Congressional Oversight of U.S. Participation
Since the MDBs were created, the President has delegated the authority to manage and instruct
U.S. participation in the MDBs to the Secretary of the Treasury. Within the Department of the
Treasury, the Office of International Affairs has the lead role in managing day-to-day U.S.
participation in the MDBs.
Congress exercises oversight over U.S. policy at the MDBs through the confirmation process.
The President appoints the U.S. Governors and Executive Directors, and their alternates, with the
advice and consent of the Senate (Table 3).
Table 3. U.S. Representatives to the MDBs
As of September 11, 2023
Alternate
Alternate
Executive
Executive
MDB
Governor
Governor
Director
Director
World Bank
Confirmation of Treasury
Under Secretary of
Vacanta
L. Felice Gorordo
(IBRD)
Secretary Janet Yellen
State Jose Fernandez
pending before Senate
AfDB
Treasury Secretary
Under Secretary of
Oren Whyche-
Jessica Isaacs
Janet Yellen
State Jose Fernandez
Shaw
AsDB
Treasury Secretary
Under Secretary of
Chantale Wong
Moushumi Khan
Janet Yellen
State Jose Fernandez
EBRD
Confirmation of Treasury
Under Secretary of
Confirmation of
Katherine Allen
Secretary Janet Yellen
State Jose Fernandez
Richard Weiner
pending before Senate
pending before
Senate
IDB
Confirmation of Treasury
Under Secretary of
Confirmation of
Maria Fabiana Jorge
Secretary Janet Yellen
State Jose Fernandez
Leopoldo Martinez
pending before Senate
Nucete pending
before Senate
Source: MDB websites and nomination status from congress.gov.
a. The previous U.S. Executive Director to the World Bank, Adriana Kugler, was sworn in as a member of the
Board of Governors of the Federal Reserve System on September 13, 2022.
Congress also holds hearings on a range of MDB issues. The Treasury Secretary testifies annually
before the appropriations committees on the Treasury Department’s budget request for the

17 Letter from Shalanda D. Young, Director of the United States Office of Management and Budget, to Kevin
McCarthy, Speaker of the House of Representatives, August 10, 2023, https://www.whitehouse.gov/wp-content/
uploads/2023/08/Final-Supplemental-Funding-Request-Letter-and-Technical-Materials.pdf.
18 Ibid., p. 34.
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international financial institutions (IFIs), which includes the MDBs.19 By law, the Treasury
Secretary also testifies before the House Financial Services Committee and the Senate Foreign
Relations Committee on the state of the international financial system, which often includes
discussion of the MDBs. The House Financial Services Committee and the Senate Foreign
Relations Committee also periodically hold hearings on specific MDB topics with Administration
officials and policy experts. For example, in 2023, the House Financial Services Committee held
a hearing on the role of the IFIs in an era of great power competition.20
Congress also shapes U.S. policy at the MDBs through legislation (see the text box below). For
example, Congress has passed legislation that directs U.S. representatives at the MDBs to
advocate for specific policies and vote specific ways at the MDBs.21 Congress has also mandated
reporting requirements, which require the Treasury Secretary to submit reports on various MDB
issues.22 Congress has also attempted to influence policies at the MDBs through the power of the
purse—withholding funding from the MDBs until certain reforms are enacted.23 Members also
meet, consult, and correspond with MDB officials directly.
Selected MDB Legislation in the 118th Congress
Exempt IDA bonds from securities regulations. H.R. 1161 would exempt bonds issued by IDA from U.S.
securities regulations, similar to the exemptions granted to securities issued by other MDBs.
Encourage financing for nuclear energy. H.R. 806 would require the U.S. Executive Directors at the IFIs to
support financial assistance in the development of nuclear energy, per U.S. national security interests.
Oppose co-financing with the Asian Infrastructure Investment Bank (AIIB). H.R. 692 would instruct the
U.S. Executive Directors at the MDBs to vote against projects that include co-financing from the China-led AIIB,
unless the AIIB starts providing grants and concessional financial assistance to low-income countries.
MDB procurement and Ukraine reconstruction. H.R. 4341 would instruct U.S. Executive Directors at the
IFIs to oppose awarding contracts for Ukraine reconstruction to any company located in a country that supported
Russia’s invasion.
Reduce reliance on Russian agriculture. H.R. 4768 would mandate U.S. Executive Directors at the IFIs to
advocate for investment in projects that would decrease reliance on Russia for agricultural commodities.
China’s role at the IDB. H.R. 4865 and S. 2470 would establish reporting requirements about China’s role in
the IDB and direct the U.S. Executive Director at the IDB to limit the influence of the Chinese government and
China’s state-owned enterprises in IDB deliberations, activities, and projects.
China’s eligibility for MDB financing. Several bil s would direct U.S. representatives at the MDBs to push for
“graduation” of the People’s Republic of China from eligibility for financial assistance from the World Bank and the
AsDB (S. 908; S. 308).
Prohibit financing for Venezuela. S. 995 would direct the U.S. Executive Directors at the IFIs, including the
IBRD, IDA, and the IDB, to oppose any measure that would allow Venezuela to receive financial assistance from
these organizations (S. 995).

19 The IFIs include the IMF, the World Bank, and the regional development banks.
20 U.S. Congress, House Committee on Financial Services, International Financial Institutions in an Era of Great Power
Competition, 118th Cong., 1st sess., May 25, 2023.
21 Congress has passed many legislative mandates over the past several decades. The Treasury Department publishes its
voting record at the MDBs on its website and notes the legislation that applied, if any (https://home.treasury.gov/
policy-issues/international/multilateral-development-banks/loan-review-votes). Some Members have considered
providing the Administration with more flexibility in setting U.S. policy at the MDBs (e.g., H.R. 557).
22 Some legislative mandates call for one-off reports; other mandates call for reports on a regular basis, typically
annually. For example, current legislation requires the Treasury Secretary to submit an annual report to the appropriate
congressional committees on the actions taken by countries that have borrowed from the MDBs to strengthen
governance and reduce the opportunity for bribery and corruption (22 U.S.C. 262r-6(b)(2).)
23 For example, the FY2010 Consolidated Appropriations Act stipulated that 10% of the funds appropriated to the
AsDF would be withheld until the Treasury Secretary could verify that the AsDB had taken steps to implement specific
reforms aimed at combating corruption (Section 7086 of the Consolidated Appropriations Act, 2010 [P.L. 111-117]).
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Increase collaboration with the IDB. S.Res. 273 would emphasize U.S. support for the IDB, among other
provisions, as part of a broader resolution for stronger relations between the U.S., Canada, Latin America, and the
Caribbean.
Selected Policy Issues
The United States has historically played a strong leadership role at the MDBs, including a key
role in creating the institutions and shaping their policies and lending to developing countries.
There are a number of MDB policy issues that Members are actively considering or might
consider during the 118th Congress, particularly as it considers U.S. funding levels for the MDBs
and confirmations for U.S. representatives at the MDBs. Some of these issues are highlighted
below.
U.S. Leadership
World Bank reform agenda. Treasury Secretary Janet Yellen supports a reform agenda at the
World Bank that would increase funding to combat climate change, among other objectives.
Should the World Bank do more to address global issues like climate change? How in practice
would the reform agenda operate? Would it require additional financing? Would the reform
agenda serve as a model for the regional banks?
Confirmation of U.S. representatives to the MDBs. Several nominations for U.S.
representatives to the MDB are pending before the Senate. How is U.S. leadership at the MDBs
affected when U.S. positions are vacant and/or filled with officials serving on an acting basis?
Selection process for MDB leadership. By convention, the President of the World Bank has
always been a U.S. citizen and the head of the International Monetary Fund (IMF) has always
been European.24 While some criticism of this convention has been growing over the past
decade,25 the U.S. nominee (Ajay Banga) was unopposed in the most recent World Bank
President election in 2023. What are the ideal characteristics for the heads of MDBs, and do
selection processes need reform?
MDB Operations and Structure
Proliferation of MDB trust funds. In addition to their main lending facilities, the MDBs operate
a number of trust funds, whereby one or more donors contribute funds for a specific purpose.
Trust funds at the MDBs have proliferated in recent decades. Currently, the World Bank has more
than 100, the AsDB has more than 60, and the IDB has more than 50.26 To what extent does the

24 For more information, see CRS Report R42463, Selecting the World Bank President, by Martin A. Weiss.
25 For example, see Gordon Bell, “S. Africa, Brazil Urge Open World Bank Appointment,” Reuters, May 26, 2007. In
2012, the World Bank Executive Board considered more than one candidate for the presidency for the first time (Annie
Lowrey, “In a Shift, The World Bank’s Next Likely President Is Facing Two Rivals,” New York Times, March 29,
2012). More recently, in 2019, more than 150 civil society organizations, academics, and other individuals signed a
letter calling for an “open, transparent, and merit-based” selection process for the head of the World Bank (Bretton
Woods Project, “World Bank President Selection: ‘Gentleman’s Agreement’ Alive and Well,” April 4, 2019). Also see
Benn Steil, “Why Washington Should Give Up the World Bank Presidency,” Council on Foreign Relations, July 24,
2023.
26 World Bank, 2022 Trust Fund Annual Report, October 18, 2022; Asian Development Bank, “Funds Administered by
the ADB,” accessed August 18, 2023; Inter-American Development Bank, “The Combined Trust Funds Administered
by the Inter-American Development Bank Combined Annual Financial Statements,” December 31, 2021.
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current structure of trust funds serve the interests of donors and affect the delivery of financial
assistance to developing countries? Could or should they be consolidated?
Alternative sources of financing. The World Bank was created to address shortages of capital
after WWII. In subsequent decades, private international capital markets developed and donor
countries created new multilateral aid organizations, including the China-led Asian Infrastructure
Investment Bank (AIIB) and the New Development Bank (created by the BRICS countries
[Brazil, Russia, India, China, and South America]). How, if at all, has the development of private
capital markets affected MDB operations, and do the MDBs crowd out private investment? What
is the impact of new development banks of which the United States is not a member?
China’s Role in the MDBs
China’s eligibility for financial assistance from the MDBs. The World Bank and the AsDB
have policies on the “graduation” of countries from financial assistance. Although China has
exceeded the threshold for initiating graduation negotiations since 2016 (Figure 5), China
continues to receive financial assistance from these banks. China also has significant resources it
could tap to self-fund development projects and provides significant financing to other
developing countries. What are the conditions under which China should graduate as a recipient
of MDB financial assistance? What are the potential implications of China’s graduation?
Figure 5. China and World Bank Graduation

Source: World Bank.
China’s membership in the EBRD and IDB. China joined the IDB in 2009 and the EBRD in
2016 as a non-borrowing (donor) member country. What have been the implications of China’s
membership in these institutions? Has China’s membership increased the financial resources
available for membership projects? What types of policies has China advocated for at these
banks?
MDB Energy Policies
MDB financing for fossil fuels. U.S. policy on MDB financing of fossil fuel projects has shifted
over the past decade. Currently, U.S. policy under the Biden Administration is to advocate for
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MDB investments in clean energy and limit support for MDB fossil fuel projects to exceptional
circumstances.27 Under what conditions should the MDBs support fossil fuel projects? How
affordable are alternative energy sources?
MDB financing for nuclear energy. For decades, the MDBs have not financed the construction
of nuclear power plants, although some MDBs provide financing for safety improvements of
operating plants and radioactive waste management. Some policymakers and analysts have called
for MDBs to finance nuclear projects, particularly to help developing countries reduce their
reliance on Russian energy and expand access to affordable energy.28 Would developing countries
be interested in nuclear power projects? How do the potential benefits of nuclear power compare
with the risks?
Procurement for MDB Projects
MDB procurement contracts and U.S. firms. Billions of contracts are awarded to carry out
investment projects financed by the MDBs each year; in 2021, U.S. firms were awarded about
1%.29 As directed by U.S. law, the Commerce Department assigns procurement officers to each of
the MDBs to assist U.S. companies working with the MDBs, advocate on procurement and
contracting issues to ensure fair and equal treatment, and work to increase the proportion of MDB
projects won by U.S. firms.30 What obstacles do U.S. firms face when bidding on MDB
contracts? Should the U.S. government be doing more to support U.S. firms bidding on these
contracts?
Intersection off MDB procurement policies and U.S. sanctions. The World Bank does not
disqualify businesses that are subject to U.S. sanctions or similar restrictions (such as foreign
businesses subject to export controls) from bidding on and winning procurement contracts.
According to a 2023 U.S. Government Accountability Organization (GAO) report, at least a small
fraction of contracts between 2017 and 2021 appear to have been awarded to businesses on U.S.
sanctions and similar lists of concern.31 How should MDB procurement policies interact with the
sanction policies of member countries? Should the United States seek to block MDB projects
from being awarded to firms that are subject to U.S. sanctions or are on other lists of concern?
State-owned enterprises (SOEs), MDB procurement policies, and China. Chinese firms win
about 40% of World Bank civil works contracts.32 SOEs are common in China and may benefit
from implicit and/or explicit subsidies from the Chinese government. When bidding on MDB
contracts, do private U.S. firms compete on a level playing field against SOEs, including Chinese
SOEs?

27 In 2013, the Obama Administration ended U.S. support for MDB financing of new coal plants, with rare exceptions.
The Trump Administration in 2017 reversed the U.S. position, encouraging MDB projects focused on fossil fuels. For
more on the Biden Administration’s policy, see U.S. Department of the Treasury, “Treasury Announces Fossil Fuel
Energy Guidance for Multilateral Development Banks,” press release, August 16, 2021.
28 DJ Nordquist and Jeffrey S. Merrifield, “The World Needs More Nuclear Power: Why the World Bank Needs to Get
in the Game,” Foreign Affairs, January 12, 2023.
29 U.S. Government Accountability Office, World Bank Borrower Countries’ Contracts to Businesses in the U.S. and to
Entities Potentially on U.S. Sanctions or Other Lists of Concerns, 23-105543, May 2023.
30 Section 2302 of the Omnibus Trade and Competitiveness Act of 1988 (the 1988 Trade Act), P.L. 100-418; 22 U.S.C.
262s-2.
31 U.S. Government Accountability Office, World Bank Borrower Countries’ Contracts to Businesses in the U.S. and to
Entities Potentially on U.S. Sanctions or Other Lists of Concerns, 23-105543, May 2023.
32 Ibid., DJ Nordquist, “China is Using the World Bank as its Piggybank,” The Hill, May 17 2023.
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Author Information

Rebecca M. Nelson

Specialist in International Trade and Finance

Acknowledgments
Alexa Apodaca, CRS Research Assistant, contributed data collection, data analysis, research, and writing to
this report.

Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan
shared staff to congressional committees and Members of Congress. It operates solely at the behest of and
under the direction of Congress. Information in a CRS Report should not be relied upon for purposes other
than public understanding of information that has been provided by CRS to Members of Congress in
connection with CRS’s institutional role. CRS Reports, as a work of the United States Government, are not
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