On March 5, 2007, donor nations began to discuss a fifteenth replenishment of funds for the World Bank's (the Bank) concessional lending facility, the International Development Association (IDA). This is the first replenishment since the 2005 G8 summit at the Gleneagles Resort in Scotland, where world leaders proposed the creation of the Multilateral Debt Relief Initiative (MDRI). The MDRI cancels the remaining debt of the world's poorest countries, and pledges to double the amount of aid to sub-Saharan Africa between 2004 and 2010, primarily in the form of grant-based assistance. It is also the first replenishment since the 2005 Paris Declaration on Aid Harmonization, in which IDA and over 100 other signatories agreed to increase coordination among donors in an effort to raise aid effectiveness. The declaration was prompted by concerns that aid is ineffective under the current structure. The lack of coordination of donors on the one hand, and the increasing restrictions on projects themselves through donor earmarks and time limits on the other, have raised the cost and difficulty for implementing foreign aid. According to one foreign aid expert, "managing aid flows from many different donors is a huge challenge for recipient countries, since different donors usually insist on using their own unique processes for initiating, implementing, and monitoring projects. Recipients can be overwhelmed by requirements for multiple project audits, environmental assessments, procurement reports, financial statements, and project updates." Thus, the role of IDA in the international aid architecture has emerged as the dominant theme of the IDA-15 negotiations. Higher levels of debt relief will lead to lower levels of IDA assistance unless donors increase their contributions significantly over the next several years, according to Bank economists and outside experts. Some argue that by forgiving the repayment of debt owed to IDA, the Bank has substantially reduced the amount of money it has to fund new operations. The Bank asserts that without additional compensation from donors and an increase in regular contributions, IDA's future commitments would remain flat in nominal terms, and decrease by 2% per year in real terms. A concerted effort toward aid coordination would likely result in higher levels of IDA funding. Analysts in the United States and in other donor countries actively debate the pros and cons of providing foreign assistance through multilateral organizations rather than solely on a bilateral basis. In addition to the aid fragmentation problem discussed earlier, it is believed by many that multilateral aid is more effective since it is likely to be better insulated from political pressure than bilateral assistance. In the World Bank's case, since the Bank's charter disallows its involvement in the domestic politics of any of its member nations, many analysts believe that the Bank has a greater degree of credibility among borrower nations and is thus better able to secure often difficult and economically painful reforms. Furthermore, some analysts argue that a major benefit of the World Bank's multilateral assistance is that the Bank is not directly subject to the often shifting priorities of individual donor nations and is thus able to focus on long-term multi-sectoral development assistance. For example, some point out that the current international focus on combating HIV/AIDS and other infectious diseases may have implications for cost of service of other health-care programs, drugs, and availability of resources, in addition to a possible brain-drain as doctors and medical professionals switch focus to work for programs with a higher profile and greater availability of funding. In these cases, the World Bank often plays an important role by focusing on a country's overall development needs, through their Country Assistance Strategies, and continuing to provide assistance to all sectors of a country's economy. On the other hand, some analysts raise concerns that the United States loses too much control over the provision of its aid with a multilateral approach. First, they argue, it is very difficult for donors to earmark funds when they are contributed multilaterally. If other donors are not in broad support of the U.S. aid agenda, the United States might be able to achieve its foreign policy objectives more directly by providing bilateral aid through the U.S. Agency for International Development (USAID) or another U.S. agency. Second, since the United States does not have veto power on World Bank lending, the Bank sometimes provides assistance to countries despite strong U.S. opposition. For example, the World Bank has several loan projects in Iran, a country that the United States has designated as a state-sponsor of international terrorism. Although Congress requires the United States to oppose any World Bank loan to Iran (or any other country so-designated by the State Department), since the United States does not have a veto, several projects to Iran have gone through over the past few years. Most recently, the World Bank approved a $224 million water supply and sanitation project in May 2005. Currently, the World Bank has ten active projects in Iran worth $1.36 billion. According to some Members of Congress, a purely bilateral approach might ensure that no U.S. funds are used to support aid programs to countries that run counter to U.S. foreign policy. Others argue that for some countries, it may in the interest of the United States for certain types of programs to be funded by the World Bank (humanitarian, environmental, for example), since certain countries might not be willing to accept aid if it were offered by the United States for domestic political reasons. The World Bank is a Multilateral Development Bank (MDB) that makes loans and grants to low and middle-income countries to promote poverty alleviation and economic development. Both the World Bank and the IMF were founded at the Bretton Woods Conference in 1944. Two of the World Bank facilities, the International Bank for Reconstruction and Development (IBRD) and International Development Association (IDA) lend directly to governments to finance projects and programs. The IBRD provides middle-income developing countries with loans at near-market rates using funds raised by the World Bank on the international capital markets. While many of these countries can borrow on the international capital markets, and are increasingly doing so, some seek loans from the World Bank to gain access to World Bank technical assistance and advisory services, as well as the prestige and perceived legitimacy that come with World Bank-backed projects. IDA was established in 1960, 16 years after the creation of the World Bank due to concerns that low-income countries could not afford to borrow at the near-market rate terms offered by the World Bank. Consequently, IDA was established as a revolving fund, providing concessional loans to the poorest countries and subsidized by both donor contributions and transfers from the IBRD. IDA assistance is highly discounted and is increasingly provided as grants. Both IDA and IBRD also make non-project loans to promote economic policy and institutional reform, and share the same staff. Both are headquartered in Washington, DC. Initial IDA funding in 1960 was $1.1 billion: $900 million from donor contributions and $210 million from IBRD net income. According to the Bank, between IDA-1 (1960-1962) and IDA-14 (2006-2008) total resources for IDA have increased on average 9.5% per year (in nominal terms). Over the three-year IDA-14 period, IDA will provide $33 billion in concessional assistance. In real terms, however, since IDA-6 (1981-1984) available resources for IDA have been flat ( Figure 1 ). Donor contributions account for over 70% of all resources available for IDA (providing about $138 billion). The remainder is funded by internal IDA resources (primarily principal repayments from IDA borrowers) and transfers from IBRD net income. Internal resources have accounted for about $46 billion of IDA's funding, while transfers from the IBRD's net income and budget surplus have provided $11.7 billion to IDA. As of the end of the World Bank's FY2006, IDA's total assets were $102.9 billion. This is a $32.1 billion decrease from FY2005's available resources of $130.4 billion due to debt write-off provided by the MDRI. Every three years, IDA donors meet to negotiate the terms of a new round of IDA. Since 1960, there have been 14 such replenishments. Negotiations for the 15 th round began March 5, 2007. At the replenishment, donors revisit the overall amount of IDA financing for the round. In addition, the replenishment is the primary opportunity for donor nations to influence World Bank policy making. For the United States, IDA contributions are typically the largest component of the annual U.S. contributions to the International Financial Institutions (IFIs). IDA replenishments comprise two distinct phases: negotiating the replenishment round and annual contributions. First, the donor nations negotiate the overall amount of a three-year replenishment, individual donor contributions, and general policy considerations for the round. Following this, each member country seeks annual contributions, typically through its legislative process, to meet their IDA commitments. For the United States, participation in any given IDA replenishment requires congressional authorization of the total IDA package. Following this authorization, the President seeks annual appropriations to the U.S. share of each round. This bifurcated process, where the Executive Branch commits to a overall replenishment amount prior to annual contributions are appropriated has led to an arrearage problem since the United States is obligated to contribute the amount agreed to at the replenishment. Congress authorizes U.S. participation in the replenishment agreement—including the terms of that agreement—when it authorizes funding for U.S. contributions to the plan. The Constitution does not require, however, that Congress appropriate the sums necessary to meet the terms of international agreement negotiated by the Executive Branch and authorized by Congress. U.S. arrears to IDA are $377.9 million.