World Bank

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Motto Type Legal status Purpose/focus Location Membership

World Bank logo Working for a World Free of Poverty International organization Treaty Crediting Washington, D.C., U.S. 188 countries[1] (IBRD)

172 countries (IDA) Jim Yong Kim President Board of Directors[2] Main organ Parent organization World Bank Group worldbank.org Website The World Bank is an international financial institution that provides loans[3] to developing countries for capital programs. The World Bank's official goal is the reduction of poverty. According to its Articles of Agreement (as amended effective 16 February 1989), all its decisions must be guided by a commitment to the promotion of foreign investment and international trade and to the facilitation of capital investment.[4] The World Bank comprises two institutions: the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA).

The World Bank should not be confused with the World Bank Group, which comprises the World Bank, the International Finance Corporation (IFC), the Multilateral Investment Guarantee Agency (MIGA), and the International Centre for Settlement of Investment Disputes (ICSID).[5]

Contents

1 History o 1.1 19441968 o 1.2 19681980 o 1.3 19801989 o 1.4 1989present 2 Leadership o 2.1 List of Presidents 3 List of chief economists 4 Members o 4.1 Voting power 5 Poverty reduction strategies 6 Global Partnerships and Initiatives o 6.1 Climate change 7 Training wings o 7.1 World Bank Institute o 7.2 Global Development Learning Network o 7.3 The JUSTPAL Network 8 Country assistance strategies 9 Clean Air Initiative 10 United Nations Development Business 11 Open Data initiative 12 Criticisms o 12.1 Structural adjustment o 12.2 Fairness of assistance conditions o 12.3 Sovereign immunity 13 References o 13.1 Notes 14 External links

History

Lord Keynes (right) and Harry Dexter White, the "founding fathers" of both the World Bank and the International Monetary Fund (IMF).[6] The World Bank was created at the 1944 Bretton Woods Conference, along with three other institutions, including the International Monetary Fund (IMF). The World Bank and the IMF are both based in Washington DC, and work closely with each other. Although many countries were represented at the Bretton Woods Conference, the United States and United Kingdom were the most powerful in attendance and dominated the negotiations.[7]:5254

Traditionally, the World Bank has been headed by a citizen of the United States, while the IMF has been led by a European citizen.

19441968
Before 1968, the reconstruction and development loans provided by the World Bank were relatively small. The Bank's staff was aware of the need to instill confidence in the bank. Fiscal conservatism ruled, and loan applications had to meet strict criteria.[7]:56-60 The first country to receive a World Bank loan was France. The Bank's president at the time, John McCloy, chose France over two other applicans, Poland and Chile. The loan was for US$250 million, half the amount requested, and it came with strict conditions. France had to agree to produce a balanced budget and give priority of debt repayment to the World Bank over other governments. World Bank staff closely monitored the use of the funds to ensure that the French government met the conditions. In addition, before the loan was approved, the United States State Department told the French government that its members associated with the Communist Party would first have to be removed. The French government complied with this diktat and removed the Communist coalition government. Within hours, the loan to France was approved.[8]:288, 290-291

When the Marshall Plan went into effect in 1947, many European countries began receiving aid from other sources. Faced with this competition, the World Bank shifted its focus to nonEuropean countries. Until 1968, its loans were earmarked for the construction of incomeproducing infrastructure, such as seaports, highway systems, and power plants, that would generate enough income to enable a borrower country to repay the loan.

19681980
From 1968 to 1980, the bank concentrated on meeting the basic needs of people in the developing world. The size and number of loans to borrowers was greatly increased as loan targets expanded from infrastructure into social services and other sectors.[9] These changes can be attributed to Robert McNamara who was appointed to the presidency in 1968 by Lyndon B. Johnson.[7]:60-63 McNamara imported a technocratic managerial style to the Bank that he had used as United States Secretary of Defense and President of the Ford Motor Company.[7]:62 McNamara shifted bank policy toward measures such as building schools and hospitals, improving literacy and agricultural reform. McNamara created a new system of gathering information from potential borrower nations that enabled the bank to process loan applications much faster. To finance more loans, McNamara told bank treasurer Eugene Rotberg to seek out new sources of capital outside of the northern banks that had been the primary sources of bank funding. Rotberg used the global bond market to increase the capital available to the bank.[10] One consequence of the period of poverty alleviation lending was the rapid rise of third world debt. From 1976 to 1980 developing world debt rose at an average annual rate of 20%.[11][12] In 1980, the World Bank Administrative Tribunal was established to decide on disputes between the World Bank Group and its staff where allegation of non-observance of contracts of employment or terms of appointment had not been honored.[13]

19801989
In 1980, McNamara was succeeded by US President Jimmy Carter's nominee, A.W. Clausen. Clausen replaced many members of McNamara's staff and instituted a new ideological focus. His 1982 decision to replace the bank's Chief Economist, Hollis B. Chenery, with Anne Krueger was an indication of this new focus. Krueger was known for her criticism of development funding and for describing Third World governments as "rent-seeking states." During the 1980s, the bank emphasized lending to service Third-World debt, and structural adjustment policies designed to streamline the economies of developing nations. UNICEF reported in the late 1980s that the structural adjustment programs of the World Bank had been responsible for "reduced health, nutritional and educational levels for tens of millions of children in Asia, Latin America, and Africa".[14]