The roles of the word bank

Poverty is a global concern. Each year, more than three million children die from malnutrition. Approximately 783 million people worldwide don’t have access to clean water. Many of those living in developing countries cannot afford medical care and die without leaving any record. The World Bank aims to end extreme poverty and support development. This international organization has long-standing relationships with 189 countries, offering loans and assistance in both the public and private sectors.

What Is the World Bank Organization?

Founded in 1944, the World Bank Group works with international institutions, regional banks and national governments to reduce poverty. The organization covers a wide range of sectors, from finance and education to climate change. Over the past 70 years, it has helped people in more than 100 developing countries.

The role of the World Bank is to address failures in international markets and end poverty. It offers grants, zero interest credits and low-interest loans or investments as well as advice and training. Currently, it has over 10,000 employees and is comprised of five institutions, including the International Finance Corporation (IFC) and the International Bank for Reconstruction and Development (IBRD).

The organization has been involved in more than 12,000 development projects since its inception. Currently, its primary goal is to reduce the global extreme poverty rate to no more than 3 percent by 2030. Another function of the World Bank is to promote environmental sustainability and green growth. Furthermore, its members sponsor and participate in conferences and other events that tackle the world’s development challenges.

The Role of the IBRD

The World Bank offers loans, grants and other financial products through the International Bank of Reconstruction and Development (IBRD) and the International Development Association. The function of the IBRD is to promote financial growth in middle- and low-income countries. In addition to loans, this institution provides advisory services, risk management products and technical support at each stage of a project.

Middle-income countries, such as Thailand and Indonesia, have a lot of potential for growth and development. They attract foreign investment and receive a large share of exports. Yet, they’re home to more than 70 percent of the world’s poorest people. The role of the World Bank and the IBRD is to invest in these countries and provide them with the best global expertise so they can grow and overcome challenges.

Benefits of the World Bank

Currently, the main function of the World Bank is to offer long-term loans and assistance to developing countries. These funds support a wide range of investments across all sectors, including education, energy, trade and urban development. The organization also facilitates regular interaction among donors and conducts studies on economic issues and social services systems.

Over the past decades, the World Bank has been involved in various projects focused on social development and inclusion, private business development, improved health care and access to education. The number of out-of-school children and teens dropped from 196 million to 124 million between 2000 and 2013, largely due to its efforts.

Other benefits of the World Bank include a better infrastructure in developing countries, more transparent services, tax reductions, free trade and socially sustainable development. The organization shares its knowledge and findings via reports, including social reviews and poverty assessments. Its policies aim to create a stable macroeconomic environment and promote liberal trade.

The World Bank

The World Bank building in Washington, D.C.
Established	December 1944 (78 years ago)
Type	International financial institution
Legal status	Treaty
Headquarters	1818 H Street, NW Washington, D.C., U.S.[1]
Membership	189 countries (IBRD)[2] 174 countries (IDA)[2]
Key people	David Malpass (President)[3] Axel van Trotsenburg (MD) Anshula Kant (MD and CFO) Indermit Gill (Chief Economist,)[4]
Parent organization	World Bank Group
Website	www.worldbank.org

The World Bank is an international financial institution that provides loans and grants to the governments of low- and middle-income countries for the purpose of pursuing capital projects.^[5] The World Bank is the collective name for the International Bank for Reconstruction and Development (IBRD) and International Development Association (IDA), two of five international organizations owned by the World Bank Group. It was established along with the International Monetary Fund at the 1944 Bretton Woods Conference. After a slow start, its first loan was to France in 1947. In the 1970s, it focused on loans to developing world countries, shifting away from that mission in the 1980s. For the last 30 years, it has included NGOs and environmental groups in its loan portfolio. Its loan strategy is influenced by the United Nations’ Sustainable Development Goals, as well as environmental and social safeguards.

As of 2022, the World Bank is run by a president and 25 executive directors, as well as 29 various vice presidents. IBRD and IDA have 189 and 174 member countries, respectively. The U.S., Japan, China, Germany and the U.K. have the most voting power. The bank aims loans at developing countries to help reduce poverty. The bank is engaged in several global partnerships and initiatives, and takes a role in working toward addressing climate change. The World Bank operates a number of training wings and it works with the Clean Air Initiative and the UN Development Business. It works within the Open Data Initiative and hosts an Open Knowledge Repository.

The World Bank has been criticized as promoting inflation and harming economic development, causing protests in 1988 and 2000. There has also been criticism of the bank’s governance and response to the COVID-19 pandemic.

World Bank Group

The World Bank Group is an extended family of five international organizations, and the parent organization of the World Bank, the collective name given to the first two listed organizations, the IBRD and the IDA:

• International Bank for Reconstruction and Development (IBRD)
• International Development Association (IDA)
• International Finance Corporation (IFC)
• Multilateral Investment Guarantee Agency (MIGA)
• International Centre for Settlement of Investment Disputes (ICSID)

History

The World Bank was created at the 1944 Bretton Woods Conference, along with the International Monetary Fund (IMF). The president of the World Bank is traditionally an American.^[7] The World Bank and the IMF are both based in Washington, D.C., 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.^{[8]: 52–54} The intention behind the founding of the World Bank was to provide temporary loans to low-income countries that could not obtain loans commercially.^[9] The Bank may also make loans and demand policy reforms from recipients.^[9]

1944–1974

In its early years, the Bank made a slow start for two reasons: it was underfunded, and there were leadership struggles between the US Executive Director and the president of the organization. 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 non-European allies. Until 1968, its loans were earmarked for the construction of infrastructure works, such as seaports, highway systems, and power plants, that would generate enough income to enable a borrower country to repay the loan. In 1960, the International Development Association was formed (as opposed to a UN fund named SUNFED), providing soft loans to developing countries.

Before 1974, the reconstruction and development loans the World Bank made were relatively small. Its staff was aware of the need to instill confidence in the bank. Fiscal conservatism ruled, and loan applications had to meet strict criteria.^{[8]: 56–60}

The first country to receive a World Bank loan was France in 1947. The Bank’s president at the time, John McCloy, chose France over two other applicants, Poland and Chile. The loan was for US$250 million, half the amount requested, and 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 and removed the Communist coalition government—the so-called tripartite. Within hours, the loan to France was approved.^[10]

1974–1980

From 1974 to 1980, the bank concentrated on meeting the basic needs of people in the developing world. The size and number of loans to borrowers greatly increased, as loan targets expanded from infrastructure into social services and other sectors.^[11]

These changes can be attributed to Robert McNamara, who was appointed to the presidency in 1968 by Lyndon B. Johnson.^{[8]: 60–63} McNamara implored bank treasurer Eugene Rotberg to seek out new sources of capital outside of the northern banks that had been the primary sources of funding. Rotberg used the global bond market to increase the capital available to the bank.^[12] 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%.^[13][14]

The World Bank Administrative Tribunal was established in 1980, 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.^[15]

1980–1989

McNamara was succeeded by US President Jimmy Carter’s nominee, Alden W. Clausen, in 1980.^[16][17] Clausen replaced many members of McNamara’s staff and crafted a different mission emphasis. His 1982 decision to replace the bank’s Chief Economist, Hollis B. Chenery, with Anne Krueger was an example 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».^[18]

1989–present

Beginning in 1989, in response to harsh criticism from many groups, the bank began including environmental groups and NGOs in its loans to mitigate the past effects of its development policies that had prompted the criticism.^{[8]: 93–97} It also formed an implementing agency, in accordance with the Montreal Protocols, to stop ozone-depletion damage to the earth’s atmosphere by phasing out the use of 95% of ozone-depleting chemicals, with a target date of 2015. Since then, in accordance with its so-called «Six Strategic Themes», the bank has put various additional policies into effect to preserve the environment while promoting development. For example, in 1991, the bank announced that to protect against deforestation, especially in the Amazon, it would not finance any commercial logging or infrastructure projects that harm the environment.

In order to promote global public goods, the World Bank tries to control communicable diseases such as malaria, delivering vaccines to several parts of the world, and joining combat forces. In 2000 the bank announced a «war on AIDS» and in 2011 the bank joined the Stop Tuberculosis Partnership.^[19]

Traditionally, based on a tacit understanding between the United States and Europe, the president of the World Bank has been selected from candidates nominated by the United States. This is significant because the World Bank tends to lend more readily to countries that are friendly with the United States, not because of direct U.S. influence but because of the employees of the World Bank.^[20] In 2012, for the first time, two non-US citizens were nominated.

On 23 March 2012, U.S. President Barack Obama announced that the United States would nominate Jim Yong Kim as the next president of the bank.^[21] Jim Yong Kim was elected on 27 April 2012 and reelected to a second five-year term in 2017. He announced that he would resign effective 1 February 2019.^[22] He was replaced on an interim basis by now-former World Bank CEO Kristalina Georgieva, then by David Malpass on 9 April 2019.

COVID-19 Pandemic

In September 2020 during the COVID-19 pandemic, the World Bank announced a $12 billion plan to supply «low and middle income countries» with a vaccine once it was approved.^[23] In June of 2022, the bank reported that $10.1 billion had been allocated to supply 78 countries with the vaccine.^[24]

Evolution of criteria

Various developments brought the Millennium Development Goals targets for 2015 within reach in some cases. For the goals to be realized, six criteria must be met: stronger and more inclusive growth in Africa and fragile states, more effort in health and education, integration of the development and environment agendas, more as well as better aid, movement on trade negotiations, and stronger and more focused support from multilateral institutions like the World Bank.^[25]

1. Eradicate Extreme Poverty and Hunger: From 1990 through 2004, the proportion of people living in extreme poverty fell from almost a third to less than a fifth. Although results vary widely within regions and countries, the trend indicates that the world as a whole can meet the goal of halving the percentage of people living in poverty. Africa’s poverty, however, is expected to rise, and most of the 36 countries where 90% of the world’s undernourished children live are in Africa. Less than a quarter of countries are on track for achieving the goal of halving under-nutrition.
2. Achieve Universal Primary Education: The percentage of children in school in developing countries increased from 80% in 1991 to 88% in 2005. Still, about 72 million children of primary school age, 57% of them girls, were not being educated as of 2005.
3. Promote Gender Equality: The tide is turning slowly for women in the labor market, yet far more women than men—worldwide more than 60%—are contributing but unpaid family workers. The World Bank Group Gender Action Plan was created to advance women’s economic empowerment and promote shared growth.
4. Reduce Child Mortality: There is some improvement in survival rates globally; accelerated improvements are needed most urgently in South Asia and Sub-Saharan Africa. An estimated 10 million-plus children under five died in 2005; most of their deaths were from preventable causes.
5. Improve Maternal Health: Almost all of the half-million women who die during pregnancy or childbirth every year live in Sub-Saharan Africa and Asia. There are numerous causes of maternal death that require a variety of health care interventions to be made widely accessible.
6. Combat HIV/AIDS, Malaria, and Other Diseases: Annual numbers of new HIV infections and AIDS deaths have fallen, but the number of people living with HIV continues to grow. In the eight worst-hit southern African countries, prevalence is above 15 percent. Treatment has increased globally, but still meets only 30 percent of needs (with wide variations across countries). AIDS remains the leading cause of death in Sub-Saharan Africa (1.6 million deaths in 2007). There are 300 to 500 million cases of malaria each year, leading to more than 1 million deaths. Nearly all the cases and more than 95 percent of the deaths occur in Sub-Saharan Africa.
7. Ensure Environmental Sustainability: Deforestation remains a critical problem, particularly in regions of biological diversity, which continues to decline. Greenhouse gas emissions are increasing faster than energy technology advancement.
8. Develop a Global Partnership for Development: Donor countries have renewed their commitment. Donors have to fulfill their pledges to match the current rate of core program development. Emphasis is being placed on the Bank Group’s collaboration with multilateral and local partners to quicken progress toward the MDGs’ realization.

Environmental and Social Safeguards

To ensure that World Bank-financed operations do not compromise these goals but instead add to their realisation, the following environmental, social, and legal safeguards were defined: Environmental Assessment, Indigenous Peoples, Involuntary Resettlement, Physical Cultural Resources, Forests, Natural Habitats, Pest Management, Safety of Dams, Projects in Disputed Areas, Projects on International Waterways, and Performance Standards for Private Sector Activities.^[26]

At the World Bank’s 2012 annual meeting in Tokyo, a review of these safeguards was initiated, which was welcomed by several civil society organisations.^[27] As a result, the World Bank developed a new Environmental and Social Framework, which has been in implementation since 1 October 2018.^[28]

Leadership

The President of the Bank is the president of the entire World Bank Group. The president is responsible for chairing meetings of the boards of directors and for overall management of the Bank. Traditionally, the president of the Bank has always been a U.S. citizen nominated by the United States, the largest shareholder in the bank (the managing director of the International Monetary Fund having always been a European). The nominee is subject to confirmation by the board of executive directors to serve a five-year, renewable term. While most World Bank presidents have had banking experience, some have not.^[29][30]

The vice presidents of the Bank are its principal managers, in charge of regions, sectors, networks and functions. There are two executive vice presidents, three senior vice presidents, and 24 vice presidents.^[31]

The boards of directors consist of the World Bank Group president and 25 executive directors. The president is the presiding officer, and ordinarily has no vote except to break a tie. The executive directors as individuals cannot exercise any power or commit or represent the Bank unless the boards specifically authorized them to do so. With the term beginning 1 November 2010, the number of executive directors increased by one, to 25.^[32]

Presidents

Presidents of the World Bank

Name	Dates	Nationality	Previous work
Eugene Meyer	1946–1946	United States	Newspaper publisher and Chairman of the Federal Reserve
John J. McCloy	1947–1949	United States	Lawyer and US Assistant Secretary of War
Eugene R. Black, Sr.	1949–1963	United States	Bank executive with Chase and executive director with the World Bank
George Woods	1963–1968	United States	Bank executive with First Boston Corporation
Robert McNamara	1968–1981	United States	President of the Ford Motor Company, US Defense Secretary under presidents John F. Kennedy and Lyndon B. Johnson
Alden W. Clausen	1981–1986	United States	Lawyer, bank executive with Bank of America
Barber Conable	1986–1991	United States	New York State Senator and US Congressman
Lewis T. Preston	1991–1995	United States	Bank executive with J.P. Morgan
James Wolfensohn	1995–2005	United States and  Australia	Wolfensohn was a naturalised American citizen before taking office. Corporate lawyer and banker
Paul Wolfowitz	2005–2007	United States	US Ambassador to Indonesia, US Deputy Secretary of Defense, Dean of the School of Advanced International Studies (SAIS) at Johns Hopkins University, a prominent architect of 2003 invasion of Iraq, resigned World Bank post due to ethics scandal[33]
Robert Zoellick	2007–2012	United States	Deputy Secretary of State and US Trade Representative
Jim Yong Kim	2012–2019	United States	Former Chair of the Department of Global Health and Social Medicine at Harvard, president of Dartmouth College, naturalized American citizen[34]
Kristalina Georgieva (acting)	2019	Bulgaria	Former European Commissioner for the Budget and Human Resources and 2010’s «European of the Year»
David Malpass	2019–present	United States	Under Secretary of the Treasury for International Affairs

Chief Economists

World Bank Chief Economists^[35]

Name	Dates	Nationality
Hollis B. Chenery	1972–1982	United States
Anne Osborn Krueger	1982–1986	United States
Stanley Fischer	1988–1990	United States and  Israel
Lawrence Summers	1991–1993	United States
Michael Bruno	1993–1996	Israel
Joseph E. Stiglitz	1997–2000	United States
Nicholas Stern	2000–2003	United Kingdom
François Bourguignon	2003–2007	France
Justin Yifu Lin	2008–2012	China
Kaushik Basu	2012–2016	India
Paul Romer	2016–2018	United States
Shanta Devarajan (Acting)	2018–2018	United States
Penny Goldberg[36][37][38]	2018–2020	United States
Aart Kraay (Acting)[39][40]	2020–2020
Carmen Reinhart	2020–2022	United States
Indermit Gill	2022–present	India

Politician from ex-world bank employee

Some notable politicians who worked for the World Bank include:

• Former Afghanistan president, Ashraf Ghani.^[41]
• Fakhruddin Ahmed was the chief adviser of the interim Government of Bangladesh during the political crisis of 2006–2008.^[42]
• Ngozi Okonjo-Iweala, former World Bank Managing Director who held several posts in the government of Nigeria, including Minister of Finance.
• Sri Mulyani Indrawati, former World Bank Managing Director and current Minister of Finance of Indonesia

Members

The International Bank for Reconstruction and Development (IBRD) has 189 member countries, while the International Development Association (IDA) has 174. Each member state of IBRD should also be a member of the International Monetary Fund (IMF) and only members of IBRD are allowed to join other institutions within the Bank (such as IDA).^[2] The five United Nations member states that are not members of the World Bank are Andorra, Cuba, Liechtenstein, Monaco, and North Korea. Kosovo is not a member of the UN, but is a member of the IMF and the World Bank Group, including the IBRD and IDA.

Voting power

In 2010, voting powers at the World Bank were revised to increase the voice of developing countries, notably China. The countries with most voting power are now the United States (15.85%), Japan (6.84%), China (4.42%), Germany (4.00%), the United Kingdom (3.75%), France (3.75%), India (2.91%),^[43] Russia (2.77%), Saudi Arabia (2.77%) and Italy (2.64%). Under the changes, known as ‘Voice Reform – Phase 2′, countries other than China that saw significant gains included South Korea, Turkey, Mexico, Singapore, Greece, Czech Republic, Hungary, Brazil, India, and Spain. Most developed countries’ voting power was reduced, along with a few developing countries such as Nigeria. The voting powers of the United States, Russia and Saudi Arabia were unchanged.^[44][45]

The changes were brought about with the goal of making voting more universal in regards to standards, rule-based with objective indicators, and transparent among other things. Now, developing countries have an increased voice in the «Pool Model», backed especially by Europe. Additionally, voting power is based on economic size in addition to the International Development Association contributions.^[46]

List of 20 largest countries by voting power in each World Bank institution

The following table shows the subscriptions of the top 20 member countries of the World Bank by voting power in the following World Bank institutions as of December 2014 or March 2015: the International Bank for Reconstruction and Development (IBRD), the International Finance Corporation (IFC), the International Development Association (IDA), and the Multilateral Investment Guarantee Agency (MIGA). Member countries are allocated votes at the time of membership and subsequently for additional subscriptions to capital (one vote for each share of capital stock held by the member).^{[47][48][49][50]}

The 20 Largest Countries by Voting Power (Number of Votes)

Rank	Country	IBRD	Country	IFC	Country	IDA	Country	MIGA
	World	2,201,754	World	2,653,476	World	24,682,951	World	218,237
1	United States	358,498	United States	570,179	United States	2,546,503	United States	32,790
2	Japan	166,094	Japan	163,334	Japan	2,112,243	Japan	9,205
3	China	107,244	Germany	129,708	United Kingdom	1,510,934	Germany	9,162
4	Germany	97,224	France	121,815	Germany	1,368,001	France	8,791
5	France	87,241	United Kingdom	121,815	France	908,843	United Kingdom	8,791
6	United Kingdom	87,241	India	103,747	Saudi Arabia	810,293	China	5,756
7	India	67,690	Russia	103,653	India	661,909	Russia	5,754
8	Saudi Arabia	67,155	Canada	82,142	Canada	629,658	Saudi Arabia	5,754
9	Canada	59,004	Italy	82,142	Italy	573,858	India	5,597
10	Italy	54,877	China	62,392	China	521,830	Canada	5,451
11	Russia	54,651	Netherlands	56,931	Poland	498,102	Italy	5,196
12	Spain	42,948	Belgium	51,410	Sweden	494,360	Netherlands	4,048
13	Brazil	42,613	Australia	48,129	Netherlands	488,209	Belgium	3,803
14	Netherlands	42,348	Switzerland	44,863	Brazil	412,322	Australia	3,245
15	Korea	36,591	Brazil	40,279	Australia	312,566	Switzerland	2,869
16	Belgium	36,463	Mexico	38,929	Switzerland	275,755	Brazil	2,832
17	Iran	34,718	Spain	37,826	Belgium	275,474	Spain	2,491
18	Switzerland	33,296	Indonesia	32,402	Norway	258,209	Argentina	2,436
19	Australia	30,910	Saudi Arabia	30,862	Denmark	231,685	Indonesia	2,075
20	Turkey	26,293	Korea	28,895	Pakistan	218,506	Sweden	2,075

Poverty reduction strategies

For the poorest developing countries in the world, the bank’s assistance plans are based on poverty reduction strategies; by combining an analysis of local groups with an analysis of the country’s financial and economic situation the World Bank develops a plan pertaining to the country in question. The government then identifies the country’s priorities and targets for the reduction of poverty, and the World Bank instigates its aid efforts correspondingly.

Forty-five countries pledged US$25.1 billion in «aid for the world’s poorest countries», aid that goes to the World Bank International Development Association (IDA), which distributes the loans to eighty poorer countries. Wealthier nations sometimes fund their own aid projects, including those for diseases. Robert B. Zoellick, the former president of the World Bank, said when the loans were announced on 15 December 2007, that IDA money «is the core funding that the poorest developing countries rely on».^[51]

World Bank organizes the Development Marketplace Awards, a grant program that surfaces and funds development projects with potential for development impact that are scalable and/or replicable. The grant beneficiaries are social enterprises with projects that aim to deliver social and public services to groups with the lowest incomes.

Global partnerships and initiatives

The World Bank has been assigned temporary management responsibility of the Clean Technology Fund (CTF), focused on making renewable energy cost-competitive with coal-fired power as quickly as possible, but this may not continue after UN’s Copenhagen climate change conference in December 2009, because of the Bank’s continued investment in coal-fired power plants.^[52] (In December 2017, Kim announced the World Bank would no longer finance fossil fuel development.)

Together with the World Health Organization, the World Bank administers the International Health Partnership (IHP+). IHP+ is a group of partners committed to improving the health of citizens in developing countries. Partners work together to put international principles for aid effectiveness and development cooperation into practice in the health sector. IHP+ mobilizes national governments, development agencies, civil society, and others to support a single, country-led national health strategy in a well-coordinated way.

Climate change

World Bank President Jim Yong Kim said in 2012:

A 4-degree warmer world can, and must be, avoided—we need to hold warming below 2 degrees … Lack of action on climate change threatens to make the world our children inherit a completely different world than we are living in today. Climate change is one of the single biggest challenges facing development, and we need to assume the moral responsibility to take action on behalf of future generations, especially the poorest.^[53]

A World Bank report into climate change in 2012 noted that (p. xiii) «even with the current mitigation commitments and pledges fully implemented, there is roughly a 20 percent likelihood of exceeding 4 °C by 2100.» This is despite the fact that the «global community has committed itself to holding warming below 2 °C to prevent ‘dangerous’ climate change». Furthermore, «a series of recent extreme events worldwide highlight the vulnerability of all countries … No nation will be immune to the impacts of climate change.»^[54]

The World Bank doubled its aid for climate change adaptation from $2.3bn (£1.47bn) in 2011 to $4.6bn in 2012. The planet is now 0.8 °C warmer than in pre-industrial times. It says that 2 °C warming will be reached in 20 to 30 years.^[55][56]

In December 2017, Kim announced the World Bank would no longer finance fossil fuel development,^[57][58] but a 2019 International Consortium of Investigative Journalists article found that the Bank continues «to finance oil and gas exploration, pipelines and refineries,» that «these fossil fuel investments make up a greater share of the bank’s current energy lending portfolio than renewable projects,» and that the Bank «has yet to meaningfully shift away from fossil fuels.»^[59]

EU finance ministers joined civil sector groups, including Extinction Rebellion, in November 2019 in calling for an end to World Bank funding of fossil fuels.^[60][61][62]

In 2021, the World Bank offered support to Kazakhstan to help the country in its mission for decarbonization and carbon neutrality. ^[63]

Food security

1. Global Food Security Program: Launched in April 2010, six countries alongside the Bill and Melinda Gates Foundation have pledged $925 million for food security. To date, the program has helped eight countries, promoting agriculture, research, trade in agriculture, etc.
2. Launched Global Food Crisis Response Program: Given grants to approximately 40 nations for seeds, etc. for improving productivity.
3. In process of increasing its yearly spending for agriculture to $6–8 billion from earlier $4 billion.
4. Runs various nutrition programs across the world, e.g., vitamin A doses for children, school meals, etc.^[64]

Training wings

Global Operations Knowledge Management Unit

The World Bank Institute (WBI) was a «global connector of knowledge, learning and innovation for poverty reduction». It aimed to inspire change agents and prepare them with essential tools that can help achieve development results.
WBI had four major strategies to approach development problems: innovation for development, knowledge exchange, leadership and coalition building, and structured learning. World Bank Institute (WBI) was formerly known as Economic Development Institute (EDI), established on 11 March 1955 with the support of the Rockefeller and Ford Foundations. The purpose of the institute was to provide an open place where senior officials from developing countries could discuss development policies and programs. Over the years, EDI grew significantly and in 2000, the institute was renamed as the World Bank Institute. Sanjay Pradhan is the past Vice President of the World Bank Institute.^[65] As of 2019, World Bank Institute functions have been mostly encapsulated by a new unit Global Operations Knowledge Management Unit (GOKMU), which is now responsible for knowledge management and learning across the Bank.

Global Development Learning Network

The Global Development Learning Network (GDLN) is a partnership of over 120 learning centers (GDLN Affiliates) in nearly 80 countries around the world. GDLN Affiliates collaborate in holding events that connect people across countries and regions for learning and dialogue on development issues.

GDLN clients are typically NGOs, government, private sector, and development agencies who find that they work better together on subregional, regional, or global development issues using the facilities and tools offered by GDLN Affiliates. Clients also benefit from the ability of Affiliates to help them choose and apply these tools effectively and to tap development practitioners and experts worldwide. GDLN Affiliates facilitate around 1000 video conference-based activities a year on behalf of their clients, reaching some 90,000 people worldwide. Most of these activities bring together participants in two or more countries over a series of sessions. A majority of GDLN activities are organized by small government agencies and NGOs.

GDLN Asia Pacific

The GDLN in the East Asia and Pacific region has experienced rapid growth and Distance Learning Centers now operate or are planned in 20 countries: Australia, Mongolia, Cambodia, China, Indonesia, Singapore, Philippines, Sri Lanka, Japan, Papua New Guinea, South Korea, Thailand, Laos, Timor Leste, Fiji, Afghanistan, Bangladesh, India, Nepal, and New Zealand. With over 180 Distance Learning Centers, it is the largest development learning network in the Asia and Pacific region. The Secretariat Office of GDLN Asia Pacific is located in the Center of Academic Resources of Chulalongkorn University, Bangkok, Thailand.

GDLN Asia Pacific was launched at the GDLN’s East Asia and Pacific regional meeting held in Bangkok from 22 to 24 May 2006. Its vision is to become «the premier network exchanging ideas, experience and know-how across the Asia Pacific Region». GDLN Asia Pacific is a separate entity to The World Bank. It has endorsed its own Charter and Business Plan and, in accordance with the Charter, a GDLN Asia Pacific Governing Committee has been appointed.

The committee comprises China (2), Australia (1), Thailand (1), The World Bank (1), and finally, a nominee of the Government of Japan (1). The organization is currently hosted by Chulalongkorn University in Bangkok, Thailand, a founding member of the GDLN Asia Pacific.

The Governing Committee has determined that the most appropriate legal status for the GDLN AP in Thailand is a «Foundation». The World Bank is engaging a solicitor in Thailand to process all documentation in order to obtain this status.

GDLN Asia Pacific is built on the principle of shared resources among partners engaged in a common task, and this is visible in the organizational structures that exist, as the network evolves. Physical space for its headquarters is provided by the host of the GDLN Centre in Thailand – Chulalongkorn University; Technical expertise and some infrastructure is provided by the Tokyo Development Learning Centre (TDLC); Fiduciary services are provided by Australian National University (ANU) Until the GDLN Asia Pacific is established as a legal entity in Thailand, ANU, has offered to assist the governing committee, by providing a means of managing the inflow and outflow of funds and of reporting on them. This admittedly results in some complexity in contracting arrangements, which need to be worked out on a case-by-case basis and depends to some extent on the legal requirements of the countries involved.

JUSTPAL Network

A Justice Sector Peer-Assisted Learning (JUSTPAL) Network was launched in April 2011 by the Poverty Reduction and Economic Management (PREM) Department of the World Bank’s Europe and Central Asia (ECA) Region. JUSTPAL’s objective is to provide an online and offline platform for justice professionals to exchange knowledge, good practices, and peer-driven improvements to justice systems and thereby support countries to improve their justice sector performance, quality of justice, and service delivery to citizens and businesses.

The JUSTPAL Network includes representatives of judiciaries, ministries of justice, prosecutors, anti-corruption agencies, and other justice-related entities from across the globe. It has active members from more than 50 countries.

To facilitate fruitful exchange of reform experiences and sharing of applicable good practices, JUSTPAL has organized its activities under five Communities of Practice (COPs): Budgeting for the Justice Sector; Information Systems for Justice Services; Justice Sector Physical Infrastructure; Court Management and Administration; and Prosecution and Anti-Corruption Agencies.

Country assistance strategies

As a guideline to the World Bank’s operations in any particular country, a Country Assistance Strategy is produced in cooperation with the local government and any interested stakeholders and may rely on analytical work performed by the Bank or other parties.

Multi-Donor Trust Fund

Another programme is the Multi-Donor Trust Fund.^[66]

Clean Air Initiative

Clean Air Initiative (CAI) is a World Bank initiative to advance innovative ways to improve air quality in cities through partnerships in selected regions of the world by sharing knowledge and experiences. It includes electric vehicles.^[67] Initiatives like this help address and tackle pollution-related diseases.

United Nations Development Business

Based on an agreement between the United Nations and the World Bank in 1981, Development Business became the official source for World Bank Procurement Notices, Contract Awards, and Project Approvals.^[68]

In 1998, the agreement was renegotiated, and included in this agreement was a joint venture to create an online version of the publication. Today, Development Business is the primary publication for all major multilateral development banks, U.N. agencies, and several national governments, many of which have made the publication of their tenders and contracts in Development Business a mandatory requirement.^[68]

The World Bank or the World Bank Group is also a sitting observer in the United Nations Development Group.^[69]

Open data initiative

The World Bank collects and processes large amounts of data and generates them on the basis of economic models. These data and models have gradually been made available to the public in a way that encourages reuse,^[70] whereas the recent publications describing them are available as open access under a Creative Commons Attribution License, for which the bank received the SPARC Innovator 2012 award.^[71]

The World Bank also endorses the Principles for Digital Development.^[72]

Grants table

The following table lists the top 15 DAC 5 Digit Sectors^[73] to which the World Bank has committed funding, as recorded in its International Aid Transparency Initiative (IATI) publications. The World Bank states on the IATI Registry website that the amounts «will cover 100% of IBRD and IDA development flows» but will not cover other development flows.^[74]

	Committed funding (US$ millions)
Sector	Before 2007	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016	Sum
Road transport	4,654.2	1,993.5	1,501.8	5,550.3	4,032.3	2,603.7	3,852.5	2,883.6	3,081.7	3,922.6	723.7	34,799.8
Social/ welfare services	613.1	208.1	185.5	2,878.4	1,477.4	1,493.2	1,498.5	2,592.6	2,745.4	1,537.7	73.6	15,303.5
Electrical transmission/ distribution	1,292.5	862.1	1,740.2	2,435.4	1,465.1	907.7	1,614.9	395.7	2,457.1	1,632.2	374.8	15,177.8
Public finance management	334.2	223.1	499.7	129.0	455.3	346.6	3,156.8	2,724.0	3,160.5	2,438.9	690.5	14,158.6
Rail transport	279.3	284.4	1,289.0	912.2	892.5	1,487.4	841.8	740.6	1,964.9	1,172.2	−1.6	9,862.5
Rural development	335.4	237.5	382.8	616.7	2,317.4	972.0	944.0	177.8	380.9	1,090.3	−2.5	7,452.4
Urban development and management	261.2	375.9	733.3	739.6	542.1	1,308.1	914.3	258.9	747.3	1,122.1	212.2	7,214.9
Business support services and institutions	113.3	20.8	721.7	181.4	363.3	514.0	310.0	760.1	1,281.9	1,996.0	491.3	6,753.7
Energy policy and administrative management	102.5	243.0	324.9	234.2	762.0	654.9	902.1	480.5	1,594.2	1,001.8	347.9	6,648.0
Agricultural water resources	733.2	749.5	84.6	251.8	780.6	819.5	618.3	1,040.3	1,214.8	824.0	−105.8	7,011.0
Decentralisation and support to subnational government	904.5	107.9	176.1	206.7	331.2	852.8	880.6	466.8	1,417.0	432.5	821.3	6,597.3
Disaster prevention and preparedness	66.9	2.7	260.0	9.0	417.2	609.5	852.9	373.5	1,267.8	1,759.7	114.2	5,733.5
Sanitation — large systems	441.9	679.7	521.6	422.0	613.1	1,209.4	268.0	55.4	890.6	900.8	93.9	6,096.3
Water supply — large systems	646.5	438.1	298.3	486.5	845.1	640.2	469.0	250.5	1,332.4	609.9	224.7	6,241.3
Health policy and administrative management	661.3	54.8	285.8	673.8	1,581.4	799.3	251.5	426.3	154.8	368.1	496.0	5,753.1
Other	13,162.7	6,588.3	8,707.1	11,425.7	17,099.5	11,096.6	16,873.4	13,967.1	20,057.6	21,096.5	3,070.3	140,074.5
Total	24,602.6	13,069.4	17,712.6	27,152.6	33,975.6	26,314.8	34,248.6	27,593.9	43,748.8	41,905.2	7,624.5	297,948.5

Open Knowledge Repository

The World Bank hosts the Open Knowledge Repository (OKR)^[75] as an official open access repository for its research outputs and knowledge products. The World Bank’s repository is listed in the Registry of Research Data Repositories re3data.org.^[76]

Criticisms and controversy

The World Bank has long been criticized by non-governmental organizations, such as the indigenous rights group Survival International, and academics, including Henry Hazlitt, Ludwig Von Mises, and its former Chief Economist Joseph Stiglitz.^[77][78][79] Hazlitt argued that the World Bank along with the monetary system it was designed within would promote world inflation and «a world in which international trade is State-dominated» when they were being advocated.^[80] Stiglitz argued that the free market reform policies that the Bank advocates are often harmful to economic development if implemented badly, too quickly («shock therapy»), in the wrong sequence or in weak, uncompetitive economies.^[78][81]

One of the most common criticisms of the World Bank has been the way it is governed. While the World Bank represents 188 countries, it is run by a small number of economically powerful countries. These countries (which also provide most of the institution’s funding) choose the Bank’s leadership and senior management, and their interests dominate.^[82]: 190 Titus Alexander argues that the unequal voting power of western countries and the World Bank’s role in developing countries makes it similar to the South African Development Bank under apartheid, and therefore a pillar of global apartheid.^{[83]: 133–141}

In the 1990s, the World Bank and the IMF forged the Washington Consensus, policies that included deregulation and liberalization of markets, privatization and the downscaling of government. Though the Washington Consensus was conceived as a policy that would best promote development, it was criticized for ignoring equity, employment, and how reforms like privatization were carried out. Stiglitz argued that the Washington Consensus placed too much emphasis on GDP growth and not enough on the permanence of growth or on whether growth contributed to better living standards.^[79]: 17

The United States Senate Committee on Foreign Relations report criticized the World Bank and other international financial institutions for focusing too much «on issuing loans rather than on achieving concrete development results within a finite period of time» and called on the institution to «strengthen anti-corruption efforts».^[84]

James Ferguson has argued that the main effect of many development projects carried out by the World Bank and similar organizations is not the alleviation of poverty. Instead, the projects often serve to expand the exercise of bureaucratic state power. His case studies of development projects in Thaba-Tseka show that the World Bank’s characterization of the economic conditions in Lesotho was flawed, and the Bank ignored the political and cultural character of the state in crafting its projects. As a result, the projects failed to help the poor but succeeded in expanding the government bureaucracy.^[85]

Criticism of the World Bank and other organizations often takes the form of protesting, such as the World Bank Oslo 2002 Protests,^[86] the 2007 October Rebellion,^[87] and the 1999 Battle of Seattle.^[88] Such demonstrations have occurred all over the world, even among the Brazilian Kayapo people.^[89]

Another source of criticism has been the tradition of having an American head the bank, implemented because the United States provides the majority of World Bank funding. «When economists from the World Bank visit poor countries to dispense cash and advice,» observed The Economist in 2012, «they routinely tell governments to reject cronyism and fill each important job with the best candidate available. It is good advice. The World Bank should take it.»^[90]

In 2021, an independent inquiry of the World Bank’s Doing Business reports by the law firm WilmerHale found that World Bank leaders, including then-Chief Executive Kristalina Georgieva and then-President Jim Yong Kim,^[91] pressured staff members of the bank to alter data to inflate the rankings for China, Saudi Arabia, Azerbaijan and the United Arab Emirates.^[92][93]

Structural adjustment

The effect of structural adjustment policies on poor countries has been one of the most significant criticisms of the World Bank.^[94] The 1979 energy crisis plunged many countries into economic crisis.^[95]: 68 The World Bank responded with structural adjustment loans, which distributed aid to struggling countries while enforcing policy changes in order to reduce inflation and fiscal imbalance. Some of these policies included encouraging production, investment and labour-intensive manufacturing, changing real exchange rates, and altering the distribution of government resources. Structural adjustment policies were most effective in countries with an institutional framework that allowed these policies to be implemented easily. For some countries, particularly in Sub-Saharan Africa, economic growth regressed and inflation worsened.

By the late 1980s, some international organizations began to believe that structural adjustment policies were worsening life for the world’s poor, due to a reduction in social spending and an increase in the price of food, as subsidies were lifted. The World Bank changed structural adjustment loans, allowing for social spending to be maintained, and encouraging a slower change to policies such as transfer of subsidies and price rises.^[95]: 70 In 1999, the World Bank and the IMF introduced the Poverty Reduction Strategy Paper approach to replace structural adjustment loans.^[96]: 147

Fairness of assistance conditions

Some critics,^[97] most prominently the author Naomi Klein, are of the opinion that the World Bank Group’s loans and aid have unfair conditions attached to them that reflect the interests, financial power and political doctrines (notably the Washington Consensus) of the Bank and the countries that are most influential within it. Among other allegations, Klein says the Group’s credibility was damaged «when it forced school fees on students in Ghana in exchange for a loan; when it demanded that Tanzania privatise its water system; when it made telecom privatisation a condition of aid for Hurricane Mitch; when it demanded labour ‘flexibility’ in Sri Lanka in the aftermath of the Asian tsunami; when it pushed for eliminating food subsidies in post-invasion Iraq».^[98]

A study of the period 1970-2004 found that a less-developed country would on average receive more World Bank projects during any period when it occupied one of the rotating seats on the UN Security Council.^[99]

Sovereign immunity

The World Bank requires sovereign immunity from countries it deals with.^{[100][101][102]} Sovereign immunity waives a holder from all legal liability for their actions. It is proposed that this immunity from responsibility is a «shield which The World Bank wants to resort to, for escaping accountability and security by the people».^[100] As the United States has veto power, it can prevent the World Bank from taking action against its interests.^[100]

PricewaterhouseCoopers

World Bank favored PricewaterhouseCoopers as a consultant in a bid for privatizing the water distribution in Delhi, India.^[103]

COVID-19

The World Bank has been criticized for the slow response of its Pandemic Emergency Financing Facility (PEF), a fund that was created to provide money to help manage pandemic outbreaks. The terms of the PEF, which is financed by bonds sold to private investors, prevent any money from being released from the fund until 12 weeks after the outbreak was initially detected (23 March). The COVID-19 pandemic met all other requirements for the funding to be released in January 2020.^[104]

Critics have argued that the terms of the PEF are too stringent, and the 12-week delay means that the funding will be much less effective than if it was released to assist governments in initially containing the outbreak. They argue that the fund prioritizes the interests of the private bondholders over public health.^[105]

See also

• Clean Energy for Development Investment Framework
• Democracy Index
• Energy Sector Management Assistance Program (ESMAP)
• International Finance Corporation
• New Development Bank
• The Swiss constituency

References

Further reading

• Ascher, W. «New development approaches and the adaptability of international agencies: the case of the World Bank» International Organization 1983. 37, 415–439.
• Bazbauers, Adrian Robert. The World Bank and Transferring Development (Springer, 2018).
• Bergsen, H., Lunde, L., Dinosaurs or Dynamos? The United Nations and the World Bank at the Turn of the Century. (Earthscan, London, 1999).
• Bilbert, C., and C. Vines, eds. The World Bank: Structures and Policies (Cambridge UP, 2000)
• Brown, Michael Barratt. Africa’s choices: after thirty years of the World Bank (Routledge, 2019).
• Davis, Gloria. A history of the social development network in The World Bank, 1973-2003 (The World Bank, 2004).
• Heldt, Eugénia C., and Henning Schmidtke. «Explaining coherence in international regime complexes: How the World Bank shapes the field of multilateral development finance.» Review of International Political Economy (2019): 1–27. online
• Heyneman, Stephen P. «The history and problems in the making of education policy at the World Bank, 1960–2000.» International Journal of Educational Development 23 (2003) 315–337
• Hurni, Bettina S. The Lending Policy Of The World Bank In The 1970s (1980)
• Mason, Edward S., and Robert E. Asher. The world bank since Bretton Woods (Brookings Institution Press, 2010).
• Pereira, João Márcio Mendes. «The World Bank as a political, intellectual, and financial actor (1944-1994).» Relaciones Internacionales 26.52 (2017): online in English
• Pereira, João Márcio Mendes. «Assaulting Poverty: Politics and Economic Doctrine in the History of the World Bank (1944-2014).» Revista De História 174 (2016): 235–265. online
• Polak, Jacques J., and James M. Boughton. «The World Bank and the International Monetary Fund: A Changing Relationship.» in Economic Theory and Financial Policy (Routledge, 2016) pp. 92–146.
• Salda, Anne C. M., ed. Historical dictionary of the World Bank (1997)
• Weaver, Catherine. 2008. Hypocrisy Trap: The World Bank and the Poverty of Reform. Princeton University Press.
• Woods, Ngaire. The globalizers: the IMF, the World Bank, and their borrowers (Cornell UP, 2014).
• World Bank. A Guide to the World Bank (2nd ed. 2007) online

External links

• Official website
• IBRD main page
• IDA main page

The World Bank: Its Role, Governance and Organizational Culture
April 1994

The 50th anniversary of the founding of the Bretton Woods institutions in 1994
prompted a flood of initiatives aimed at assessing the role played by the World
Bank and the International Monetary Fund and debating their future. Most of
such reassessments begin by stressing how much the world has changed in the
50 years since both organizations were established. From the collapse of communism
to the communications and transportation revolution, and from the radical transformation
of financial markets to the population explosion, the inventory of the new conditions
under which the Bretton Woods institutions have to operate is certainly long.
The implication, of course, is that the institutions should adapt their goals
and policies to the new realities and then reorganize accordingly.

It will not be that easy. Among other reasons, adapting goals and strategies
effectively to new conditions requires a shared view of the fundamental purpose
of the institutions. Even though the purposes of the Fund and the Bank are often
stated in official documents, the expectations and the behavior of the different
groups with influence over their policies frequently tend to reflect very different
assumptions about these fundamental purposes.

There are significant differences among the governments that «own»
the Bank and the Fund. Top managers and the staff of the institutions have different
views about the core purpose of their organizations and, needless to say, public
opinion is also divided. Many of these differences have little to do with the
changes in the environment in which the Fund and the Bank have to operate.

In the case of the World Bank, the lack of consensus about its basic mission,
limitations in its governance system, and other conditions have led to a proliferation
of goals-which in turn has had important organizational repercussions. Furthermore,
the size, complexity and relative independence of the Bank create a substantial
margin for inconsistencies among its environment, its strategy, and its organization.
Usually, competitive pressures do not leave decision-makers much choice but
to adapt goals and strategies to environmental changes and to make the necessary
internal adjustments to support the new strategy. But, without intense competition,
or other external challenges, organizations like the Bank-large, complex, relatively
autonomous, and with a significant capacity to influence its environment-can
postpone, or even avoid, the difficult decisions required to minimize incongruities
between strategy and internal organization. They can often afford the added
costs and inefficiencies that result from the ineffectiveness of an internal
structure whose objectives and policies do not respond adequately to the new
external threats and opportunities. Furthermore, in large organizations, the
structure, operating procedures and systems, internal culture, inertial behavior,
and other such factor end up shaping the strategy, not vice-versa. Therefore,
while the World Bank will certainly have to adjust its policies and operations
to new challenges, its internal structure will significantly constrain the range
of strategies it can consider seriously or implement effectively.

These are the themes of this paper. Its central message is that while the anniversary
of the Bretton Woods institutions will generate many welcome reappraisals, evaluations
and proposals about new roles, objectives and policies, a major reconsideration
of the way in which they are governed and the internal factors that influence
the Bank’s performance is also in order. The Bank urgently needs a more focused
mission and a smaller number of operational priorities. Designing the process
through which priorities are defined may well be more important-and difficult-than
coming up with a new mission or new goals for the Bank. The new circumstances
faced by the Bank also call for changes in its organizational culture. The «privatization’
of the Bank’s culture means more competition and more emphasis on external results
than on internal priorities Greater attention and proximity to the clients is
also recommended.

While there are many expectations and definitions of the fundamental role of
the Bank, four different models or perspectives are the most common. The first
is the view that the World Bank is a financial intermediary, the Bank-as-a-bank
model. A second perspective or model is the view of the Bank as an evangelical
agent in charge of changing the behavior of governments in developing countries.
The fourth is the view that the World Bank is a mechanism to transfer financial
resources from richer to poorer countries.

From the Bank-as-bank perspective the World Bank’s role is, quite simply, to
be a bank. Therefore, maintaining the institution’s long-term financial integrity
is a crucial purpose on which all other goals depend. The second model views
the Bank as an instrument for the advancement of the national interest of the
countries with more influence on its decisions. Such national interest is expressed
in their policies towards other countries, in procurement goals for their companies
in projects financed by the Bank, or even in expanding employment opportunities
at the Bank for their nationals. The third is the evangelical model. A growing
constituency sees the Bank’s combination of money, access, knowledge, and expertise
as a powerful instrument to convert the souls of governments implementing misguided
public policies. This is, in fact, a more concrete manifestation of the expectation
that the Bank’s main role is to support a liberal (or market-based) economic
system, as expressed in the promotion of liberal trade and investment regimes.

Another version of this approach sees the Bank as an instrument for the promotion
of values not readily accepted by the traditional power structures within developing
countries. Increasing investment in and attention to women, environmental protection
and better governance in terms of respect for human rights or accountability
and transparency in government decisions are the prime examples of the sort
of objectives that flow from this perspective of the Bank’s role.

But for those who assume that the Bank exists to transfer badly needed resources
to poor countries, having its essential purpose defined as that of a financial
intermediary is confusing means and ends. For the resource-transfer model, development
is the objective and finance the instrument. Therefore, it assumes that the
bank is a developmental institution first and a financial intermediary second.
The Bank-as-bank perspective responds that while this may be true, in practice,
if the capacity of the Bank to raise cheaper funds from international financial
markets is impaired, money for all the other developmental objectives will be
less readily available.

I think it perfectly normal that after a period of strong growth, the Bank
has now reached a period of maturity. The bank’s exposure cannot be increased
without significant dangers for the rating of the institution by financial
markets. It would be dangerous to define any net transfer target, since it
would mean that the bank would constantly increase its exposure and, in practice,
refinance its own interest charges. I would insist on strengthening the balance
sheet, both on the asset side, improving the quality of the portfolio, and
on the liability side, building a stronger capital base through larger provisions
for losses and more reserves.

Such widely differing assumptions about the basic role of the World Bank naturally
engender very different visions about its goals and policies. The standards
by which to judge the organization’s performance or the changes needed to respond
to new problems are also very dependent on the assumptions about the Bank’s
role. The quality of the bank’s loan portfolio, for example, should not be the
top priority if the main operational goal is to approve as many loans per year
as possible. This is the resource-transfer model. If, instead, maintaining a
top credit rating for the Bank by financial markets is seen as a condition without
which its other developmental objectives cannot be achieved-the Bank-as-bank
model-then the quality of the loans becomes a central objective. Therefore,
transferring resources to clients should not take precedence over the quality
of the loan portfolio.

Some also argue that these two objectives need not be mutually exclusive and
that the quality of the portfolio can be interpreted simply as an operational
constraint on the goal of maximizing the resources transferred to borrowing
countries. But part of the difficulty in the debate over the Banks role and
objectives is that what for some are objectives for others are means-or policies-to
achieve other, higher order goals. For some, transferring resources is the goal.
For others, poverty reduction is the goal and transferring resources-including
knowledge-is a means to advance towards that objective.

Lending to the countries of Eastern European and the former Soviet Union provides
a very illustrative example of the practical repercussions of the lack of consensus
over the Bank’s role. The World Bank (together with the IMF) has been publicly
criticized by some governments in the G-7 for not reacting quickly enough to
the needs and the emergencies of these new clients. This accusation is valid
for those who think the Bank’s role is to transfer resources to its clients.
It is invalid, however, for those who think the Bank is a bank, as some G-7
governments have stated. This example is also cited by those who hold the view
that the Bank is simply an instrument to advance the interests of its more influential
shareholders. From this viewpoint, even the adoption of the different perspectives
about the fundamental role of the Bank by the more powerful shareholders responds
to their circumstantial interests and, therefore, changes through time. Proponents
of this perspective cite as an example the fact that the same countries that
had urged caution and restraint in the Bank’s actions during the debt crisis-citing
the need to imperil the Bank’s financial integrity-had no qualms in checking
these sound financial principles at the door when pressing the Bank to take
immediate and massive actions to aid the former Soviet Union.

The consequences of the lack of consensus among its owners about the fundamental
role of the World Bank have become more visible in recent years as a result
of changing international circumstances, notably the end of the cold war. But
different views about the basic function of the Bank have shaped its evolution
since its inception, and will probably continue to coexist in the foreseeable
future. Development is a multifaceted process and the shareholders of the Bank
are political actors subject to simultaneous contradictory pressures. This obviously
limits the Bank’s capacity to focus its efforts. As a senior bank official put
it,

These different views are held by the same sets of shareholders-indeed,
often by the same shareholder. Which view predominates depends on the subject
and time. An institution that gets such diverse and variable guidance as a
steady diet will have problems in focusing on fewer objectives far greater
than those created by internal constraints…

The Purpose of the World Bank: From Mission Ambiguity to Goal Congestion

Growing needs and external expectations, rapid changes in its environment, and
a governance structure that inhibits a more sharply focused strategic agenda
have naturally led to mission ambiguity and goal congestion.

Officially, poverty reduction is-as constantly emphasized by the Bank’s official
statements-the fundamental purpose of the institution. But the very different
ways through which this goal was pursued over the years, the growing diversification
of the Bank’s more operational priorities, and the highly political nature of
the agenda-setting process, have eroded the usefulness of poverty alleviation
as the anchor providing a solid grounding against the strong pressures for diversification.
AS a result, while knowing that poverty alleviation is the official line, Bank
staff hold as diverse views as those outside the institution of what in reality
the Bank’s mission is-and ought to be.

The Bank’s charter, drafted in 1944 and called «Articles of Agreement,»
defines five purposes for the institution but does little to clarify the goals.
Three purposes provide some general strategic direction and two have a more
operational orientation. According to the Articles of Agreement, the three strategic
purposes of the Bank are: 1) to help member states to reconstruct and develop
by facilitating capital investment; 2) to promote foreign private investment,
and 3) to promote the long-range balanced growth of international trade and
the maintenance of equilibrium in balances of payments. This should be achieved
by encouraging international investment aimed at mobilizing domestic resources
and thus «…raising productivity, the standard of living and conditions
of labor.» The other two, more operational, mandates in the Articles emphasize
the need to coordinate with other lending agencies and the need «to conduct
its operations with due regard to the effect of international investments to
business conditions…»

These purposes have been interpreted in a variety of ways in the last half-century.
In his writings, even the Vice-President and General Counsel of the Bank wonders
how, in this changing environment, the Bank managed to avoid having to modify
its constituent charter in any significant way. His explanation is that,

This is in large part due to he broad scope of the Articles of Agreement
and the extensive power of the Board of Directors to interpret these articles.

After its role in postwar reconstruction, the Bank concentrated in financing
infrastructure in developing countries. It eventually became a major source
of financial and technical assistance for the newly formed governments of the
former colonies that gained independence in the 1950s and 1960s. In the early
1970s, poverty, rural development, support for agriculture and concerns about
population issues gained a significant prominence in the Bank’s agenda. In the
1970’s the financing of industrial development -often to state-owned enterprises-intensified.
The debt crisis propelled the IMF and the Bank into center stage and gave rise
to policy-based lending: loans disbursed in exchange for policy reforms aimed
at correcting macroeconomic imbalances and boosting the productivity of the
economy through structural reforms. The last decade of the century finds the
Bank with a growing consensus about its developmental doctrine-the «market-friendly»
approach-and with the challenge of figuring out how to deliver on the environmental
front and how to minimize the costs of the transition out of centrally-planned
economies. In 1992, the Bank’s region-oriented organizational structure was
complemented with the creation of three new, goal-oriented vice presidencies
dealing with the environment, the development of the private sector and poverty
and human resources (health, education etc.)

Throughout this evolution, as the Bank adopted new goals, it never she its
previous ones. This created a «sedimentary» approach to goal formulation
that clearly contributes to its congestion. New goals were adopted not only
as a result of the Bank’s own propensity to grow and diversify. Pressing needs
were certainly there and few other institutions have been available to tend
to such needs. In other cases, existing institutions were perceived as inadequate.
For example, widespread disappointment with the performance of other agencies
of the UN system increases the pressures for the bank to intervene, and more
happily than grudgingly the Bank often obliged. As the institutional decay of
UNESCO intensified and donor frustration about their lack of control over it
increased, the Bank boosted its efforts at assisting countries in education
and science. In health, child nutrition, population, industrial development,
trade policy, agriculture, technical assistance and, more recently, the environment,
the Bank’s expansion was often justified by the need to «complement»
the efforts of UNICEF, the UN Fund for Population, UNCTAD, UNIDO, FAO, UNDP,
or the UN Environmental Program.

Goal congestion at the Bank was also intensified by the growing influence of
legislatures in donor countries which, in turn, have become much more sensitive
to the pressures of non-governmental organizations (NGOs) than was the case
just ten or twenty years ago. The explicit incorporation of the environment
or the role of women in development into the Banks; agenda and the growing concerns
in the Bank’s operations for issues like human rights, military expenditures,
the quality of governance in borrowing countries, democracy, corruption and
the like, owes itself in no small measure to the active role of NGOs and congresses.

Practical realities are also shaping the Bank’s agenda. As countries privatize
most of their state-owned firms, some clients are inevitably lost. In the past,
Bank loans were often used to establish or expand these companies. So, paradoxically,
while the Back could provide funds to a country to upgrade an electricity company,
the Bank cannot lend directly to it once the company is privatized because it
does not have a sovereign guarantee. The International Financial Corporation
(IFC), the subsidiary of the Bank that invests and lends to the private sector
in developing countries, does not have the capital base to cover huge needs
in private infrastructure investments that are being faced by these counties.

Another important reality that is bound to shape the Bank’s agenda is the growing
integration of capital markets and increasing capacity of successfully reforming
countries to access these markets directly. Countries that have been successful
in stabilizing their economies and achieving a substantial degree of political
and institutional stability, can now secure through the international capital
markets the funding for projects that in the past could not only be financed
through the World Bank. Developing countries perceived as good risks will increasingly
be able to access funds from international capital markets under conditions
that are competitive to those offered by the Bank. This, of course means that
the Bank’s portfolio will be increasingly concentrated in the more unstable
and, therefore, more risky, countries or projects. Again, some may regard this
as a very positive evolution and as proof of the Bank’s effectiveness. Others,
instead, will worry that in the long or even the medium run this trend could
impair the capacity of the Bank to operate.

Given the practical impossibility of incorporating into all the operations
the complete set of priorities that may form part of the Bank agenda at a given
time, and given that these priorities vary through time and that it is politically
difficult to formally announce that the Bank is dropping one of its priorities,
the solution has been to reduce their importance tacitly. When this happens,
budgets assigned to these objectives stagnate or shrink, the frequency with
which they are expressed in actual operations declines, visibility and internal
status of the staff working on them decrease and, in general, the staff becomes
rapidly aware that these are not the issues on which successful careers are
built. While this mechanism lacks transparency, over the years it has served
the purpose of containing what otherwise would be an even more confusing and
wasteful accumulation of goals.

In many aspects the governance system of the Bank has worked well. Even its
more scathing critics recognized that the Bank has been able to avoid some of
the profound governance and management problems that plague other multilateral
organizations. The Bank’s reaction to the debt crisis, to the need for a more
balanced use of markets and states in development, to the need for more effective
protection of the environment to the challenges posed by the transition of the
former communist countries, are for many objective observers, the most effective
responses possible under prevailing circumstances. To others these are misguided
policies that actually harm borrowers, fleece donors, or even manage to combine
both effects. Still, most of these critics accept that the Bank’s accumulation
of technical capacity on issues relevant to developing countries is one of the
best in the world, if not the best.

In any case, the drafters did envision that ministers acting as Bank governors
would have to rely on their envoys at the board for overseeing the Bank’s functioning.
The drafters probably envisioned a board with more influence than it has had
in practice over the years. In fact, the first president of the Bank, Eugene
Meyer, resigned a few months after his appointment over what was, in his judgement,
the excessive interference of the board. One of the most polemic provisions
in the Articles of Agreement is that,
The Executive Directors shall function in continuous session at the principal
office of the Bank and shall meet as often as the business of the Bank may require.

Many factors account for this decline in the actual power of the Board.

Size. From 1944-1994 the Board doubled in size (from 12 to 24 executive
directors) as a result of the World Bank becoming a truly global institution
(its member countries grew from 44 to 176 in 1993). This increase in size made
directors a more heterogeneous group, thus making their integration and cohesion
more difficult.

High Turnover. Directors are appointed for a two-year, renewable period.
In practice, the average tenure has been around three years, but the majority
(65 percent) leave before three years. Obviously, some directors, especially
those representing only one country tend to stay for much longer periods. Even
though the number of the members of the board has increased, the number of Directors
representing a large number of countries has also increased as more countries
joined the Bank (the executive director of one of the African chairs, for example,
represents 25 countries). This has meant an increase in turnover, as countries
are eagerly awaiting their turn in the rotation in their group to appoint one
of their nationals to the Board. Thus, reappointments after the first two-year
term is completed, are decreasing in frequency. The acceleration of political
change in both borrowing and non-borrowing countries has also contributed to
a more frequent replacement of executive directors, even though, formally, once
appointed they cannot be removed by their authorities until the two year period
is completed.

Complexity. While the tenure of the directors is short and decreasing,
the complexity of the operations they have to oversee is high and increasing.
The volume and complexity of the Bank’s work makes it very difficult for directors
to be informed and effective participants in all of the discussions where Bank
policies and decisions are made. Even though the support staff (alternate directors,
advisors, assistants, secretaries, etc.) of executive directors has expanded
substantially, and some directors receive additional support from public agencies
in their capitals, the volume and the intricacy of the work has expanded even
more. In the two or three years that most directors stay at the Bank, it is
impossible, even for the few that have a good prior understanding of the institution,
to master the overwhelming array of complex issues on which they are supposed
to develop an independent opinion.

The Functioning of the Board. The procedures guiding the functioning
of the board are woefully outdated and, in fact, reduce the influence of the
board by making it inefficient and often irrelevant. The difficulty that the
board has traditionally exhibited in modernizing its ways and means and increasing
its relevance is an excellent example of the decision-paralysis that plagues
its operation. In essence, executive directors spend their time at board meetings
(twice a week the entire morning and often the entire day), being briefed by
staff, in committee meetings, receiving delegations from their constituent countries
or reading the materials for the next meeting. It took almost two years of prodding
and debate for the board to reluctantly agree-in 1992-to reform some of its
procedures, streamline its functioning and increase the policy-relevance of
its discussions. While these changes implied a significant progress in comparison
to the previous situation, they still fell very short of the more drastic revamping
needed to adjust the board to the circumstances faced by the Bank.

From this perspective it is even easier to understand why, in an institution
with a board that has such difficulty deciding how to modernize the way it operates,
decisions what focus more sharply the Bank’s priorities would be close to miraculous.

A Divided Board. It is not clear how much the directors were able in
the early stages of the Bank, to tilt the balance of their dual loyalty towards
the Bank and avoid the interference of circumstantial interests of their countries
with the Bank’s long term health. It is, instead, very clear than in latter
stages this balance shifted toward the more «ambassadorial: model of behavior.
Directors receive explicit instructions from their capitals, actively lobby
for the appointment of their fellow nationals to top management positions or
for easing the conditionality of a loan to one of the borrowing countries in
their constituency. While the east-west divide somewhat influenced alignments
in the board, the most important cleavage was — and is — between directors representing
borrowing and non-borrowing countries. Given that non-borrowing countries. Given
that non-borrowing countries are the majority owners of the Bank, their policy
preferences are determinant and tend to be communicated directly to the staff
or interpreted in advance by it. For many fundamental policy issues, this shifts
the arena for decision making — or at least for the building of a sufficient
agreement — out of the boardroom and into the offices of the largest shareholders,
and notably to those of the neighboring US Treasury. The G-7 summits or the
series of meetings of representatives of donor countries (the IDA’s deputies)
that center around the replenishment of IDA’s funds, often have much more impact
over the Bank’s policies and priorities than an entire year of board meetings.

The Quality of the Board. It is never easy to have objective assessments
of the overall quality of a human group, other than those related to its measurable
performance. Give that the board has no formal responsibility for concrete results,
its performance is impossible to evaluate objectively. Nonetheless, the generalized,
and admittedly subjective, anecdotal and perhaps even uninformed perception
among observers is that the caliber of the board has tended to decline. While
this may well be an unfounded and slanderous evaluation, the fact is that there
are many factors negatively affecting the recruitment patterns of executive
directors. First is that, perhaps as a result of the increasing perception of
the board as a rubber-stamping, powerless and inefficient body, the status of
executive directors has decreased. Second, the position of the Bank (or IMF)
executive director has been increasingly «captured» by the bureaucracies
of shareholding governments. The post has been incorporated — explicitly or
implicitly — in the organizational charts, career plans and expectations of
the bureaucracies in charge of the Bank in its shareholding countries. This
has often lessened the political influence of the director is his or her home
country as its communications and instructions are usually managed by «handlers»
in the bureaucracy that are normally not at the higher levels of government.
In contrast, the Bank’s top management usually has direct and frequent access
to ministers and heads of state.

The Growing Autonomy of the President and the Administration. It is
not surprising that, under these circumstances, the relative balance of power
between board and managers has been shifting away from the board. A divided
board of overwhelmed directors, many of whom cannot afford to irritate the Bank’s
management, and usually leave by the time they begin to be more effective, is
no match for a usually brilliant group of professionals with decades of experience
at the Bank.

For this process to be relevant-or even possible—significant changes in the
governance of the World Bank should take place. Hurried governors cannot be
expected to become too distracted with Bank affairs. But an enlightened group
of governors could decide that it is high time to take more effective action
and upgrade the governance system of the Bank. Among other measures, they may
consider the following:

• Strengthen the role of the Governors. Ministers should be enrolled more
effectively and systematically in the governance of the Bank. It is probably
a good idea to have an executive committee of governors to provide long-term
political guidance to the Bank. This proposition may sound simple and obvious
enough, but in practice, it is legally and politically burdensome and very difficult
to implement. It requires that the constitution of the Bank be modified and
that almost 200 countries agree on a subgroup of governors to represent all
of them for a given period. Nonetheless, and despite these and other difficulties,
a mechanism must be found to strengthen the goal -setting and oversight roles
played by shareholders. One small step in that direction could perhaps be the
redefinition of the structure and the functioning of the Development Committee.
The urgent need for a complete overhaul of the Committee is evident. It is indispensable
to make it less ritualistic, predictable and irrelevant. A biannual occasion
for governors to meet and discuss the Bank should not continue to be the missed
opportunity that it has hitherto been. The Development Committee could increase
its role as one of the bodies through which the governors convey policy guidelines
to the Board and management of the Bank. On the other hand, recent attempts
at reforming limited but useful ways the Development Committee have encountered
so much resistance that a major reformulation of the role of this body is also
bound to be a titanic task.

• Upgrading the board of executive directors. Governors should also agree
to upgrade the level of their representatives to the board of the Bank. This
might seems a subtle change with minor bureaucratic consequences. Nonetheless,
given the circumstances that will be faced by the institution in coming years,
it could well prove to be a momentous decision. Among other effects, the appointment
to the board-even by two or three shareholders-of individuals with high visibility
and prestige is bound to spur similar decisions by others, thus creating a quantum
leap in the relevance of the board.

• Extending the tenure of executive directors. Board relevance would certainly
be enhanced by increasing the tenure of executive directors. A minister who
has to appoint an executive director for an extended period of time (four years?)
and who cannot remove the director once he or she is appointed is probably going
to pay more attention to the selection of the candidate. Also, as noted, directors
will have the time that they now lack to become effective interlocutors before
their term of appointment to the board ends.

• Redefining the functioning of the board. Major improvements in the Bank’s
governance can be achieved through the modernization of the board’s procedures,
support systems and general organization. Board committees have great limitations
to induce the drastic changes in procedures that the board urgently needs. An
external consulting company, with experience in the design of working methods,
support systems, and organizational design of boards of directors of complex
organizations, should be retained. It should report its recommendations to a
special committee of the Board of Governors.

These are some specific avenues that can be explored in order to strengthen
the governance of the Bank. For some, agreeing on the role of the Bank, finding
creative ways to engage governors in serious discussions about long term objectives
of the institution, recruiting executive directors with high internal and external
credibility and influence, redesigning the roles of the board, its operations,
and its relationship with management may be minor «technocratic» changes.
They will, however, be hard to achieve and are, perhaps, unrealistic. Yet without
these small, difficult changes, lofty ideas about the Bank are very likely to
remain only ideas.

Furthermore, improving the arrangements and procedures through with the Bank
is governed is not enough. The need to modify some of the organizational characteristics
and the practices they engender is also necessary. The Bank’s own examination
of its portfolio-the Wapenhans report-highlighted problems that has as much,
if not more, to do with internal organizational aspects as with external financial,
economic, and institutional complications.

The Bank developed a five-point «action plan» aimed at solving or
alleviating some of the problems it its loan portfolio and preventing their
recurrence in future operations. One of these five actions stresses the need
to «create an internal climate that encourages better management of the
portfolio» which according to the Bank’s President is aimed at creating

«…a change in institutional behavior and attitudes over time which
will reflect the crucial importance of managing the implementation of our operations
well and of judging out effectiveness in terms of development impact.

This emphasis on changing some aspects of the Bank’s climate and internal behavior
is certainly well placed. Organizational changes should target the informal,
subtle aspects of the internal culture rather than centering exclusively in
the more mechanistic redesign of the explicit structure and formal procedures
of the institution. The Bank’s report notes that these internal changes are
being sought through changes in the skill mix of its staff and changes in the
rewards and incentives structure.

These are valid first steps. But the Bank would also do well to use the advice
it normally gives to its clients and inject much more competition into its organization.
As one of the Bank’s publications recommends,

Since competition is an important factor in determining institutional performance,
a logical implication is to increase the competitive atmosphere…[and] design
managerial or organizational solutions that stimulate competition in entities
which are not exposed to it…Competition [can be] expanded to include not
only external economic competition but also three surrogates: external pressures
derived from clients, beneficiaries or suppliers; external pressures derived
from the political establishment and controlling or regulatory agencies, and
internal pressures derived from managerial or administrative measures. Mechanisms
can be found in all four categories for introducing or simulating competitive
conditions.

Examples of the changes that might contribute to the adaptation of the organization
to new realities are:

• Make the external clients more important that the internal ones. The
search for mechanisms that introduce more competition will have to be guided
by a much stronger client orientation than the organization now has. The main
challenge-and recommendation-is to create the conditions that shift the staff
attention from pleasing the many constituencies and «clients» inside
the Bank to center much more on the real-outside-clients and their needs and
limitations. This would, of course require major changes in the structure of
incentives and in the personnel practices of the Bank. It would also require
a very deliberate and sustained effort to break some of the habits that are
deeply embedded in its organizational culture. Spending more time with clients
and less with colleagues would be a very important goal in this respect.

• Pay more attention to the marketing of ideas. A stronger client orientation
would increase the importance of persuasion and the marketing of ideas and the
promotion of change. It will make staff members that are effective in helping
public officials in borrowing countries to bring about the desired changes more
recognizable and successful that those whose main skills are writing technically
sounds reports and the design of sophisticated loan conditions. «Practice
development» in the same sense that is conducted by international consulting
firms and adapted to the specific needs of the Bank’s clients would also contribute
to make sure that the practical lessons that are learned by staff in operations
get more effectively disseminated to the other «is ands» within the
organization.

• Make the Bank’s research more «practitioner friendly». Worrying
about how to disseminate effectively what the Bank knows should be as important
as worrying about how to improve the current knowledge. Investing in the distribution
of knowledge to developing countries and to practitioners should be as important
as it is now is to produce highly technical documents that are disseminated
to the authors’ peers in universities and research centers.

• Move staff to the field. Such heightened attention to clients would
also mean spending more time with them away from Washington. It may also mean
that more resources, people, officers, and decision making should be nurtured,
followed, and supported more consistently. The proximity of the staff to the
clients should be increased beyond what is now the case (one or two short supervision
visits each year).

The World Bank is an international organization that helps emerging market countries to reduce poverty. Its first goal is to end extreme poverty. It wants no more than 3% of people to live on $1.90 a day or less by 2030. Its second goal is to promote shared prosperity. It wants to improve the incomes of the bottom 40% of the population in each country. Since 1947, the World Bank has funded more than 12,000 projects.

The World Bank is not a bank in the conventional sense of the word. Instead, it consists of two organizations. One is the International Bank for Reconstruction and Development, which provides loans, credit, and grants. The second is the International Development Association, which provides low- or no-interest loans and grants to low-income countries.

The Bank works closely with three other organizations in the World Bank Group:

1. The International Finance Corporation (IFC) provides investment, advice, and asset management to companies and governments.
2. The Multilateral Investment Guarantee Agency (MIGA) insures lenders and investors against political risk such as war.
3. The International Centre for the Settlement of Investment Disputes (ICSID) settles investment disputes between investors and countries.

World Bank Purpose and Function

The World Bank provides low-interest loans, interest-free credit, and grants. It focuses on improving education, health, and infrastructure. It also uses funds to modernize a country’s financial sector, agriculture, and natural resources management.

The Bank’s stated purpose is to «bridge the economic divide between poor and rich countries.» It does this by turning «rich country resources into poor country growth.» It has a long-term vision to «achieve sustainable poverty reduction.»

To achieve this goal, the Bank focuses on several areas:

• Overcome poverty by spurring growth, especially in Africa.
• Help reconstruct countries emerging from war, the biggest cause of extreme poverty.
• Provide a customized solution to help middle-income countries remain out of poverty.
• Spur governments to prevent climate change.
• Work with partners to bring an end to AIDS.
• Manage international financial crises and promote open trade.
• Work with the Arab League on three goals: improve education, build infrastructure, and provide microloans to small businesses.
• Share its expertise with developing countries via reports and its interactive online database.

The Head of the World Bank Group

On February 6, 2019, President Donald Trump nominated David Malpass to be president of the World Bank. He was undersecretary of the U.S. Treasury Department for international affairs. Malpass had criticized bank lending to China but needed the support of China and Japan, who are the top two World Bank shareholders after the United States. He was officially approved on April 9, 2019.

The World Bank president reports to a 25-member Board of Executive Directors. Among the contributing countries are France, Germany, Japan, the United Kingdom, and the United States.

Jim Yong Kim, M.D., Ph.D., was president from 2012 to 2019. He resigned on February 1, 2019, three years before his term ended, to join Global Infrastructure Partners, a private equity fund. Prior to his time with The World Bank, Dr. Kim had been the president of Dartmouth College and advocated for improved health service.

Robert Zoellick was president from 2007 to 2012. During President George H.W. Bush’s administration, Zoellick served with Secretary of State James Baker, III, as Under Secretary of State for Economic and Agricultural Affairs. Zoellick held executive positions in Fannie Mae from 1993 to 1997 and the Office of Trade Representative from 2001 to 2005. From there, he went to the State Department in 2005 until 2006 and then on to Goldman Sachs from 2006 to 2007.

The Bank has thousands of employees from over 170 countries.

The World Bank Fights Climate Change

The World Bank has joined the fight against climate change because it could push much more of the world’s population into poverty by 2030. It has committed $83 billion to climate-related improvements in developing countries and plans to add 30 gigawatts of renewable energy, support early warning systems for 100 million people, and develop climate-smart agriculture for 40 countries. The Bank also uses the true cost of carbon in all its projects.

Statistics and Reports

The World Bank provides a wealth of downloadable data for more than 200 countries. In 2010, the Bank launched an Open Data website, which provides free access to hundreds of major indicators, including:

• Climate change, the environment, and energy
• Health, such as life expectancy
• Urban development and infrastructure
• Labor, income, and education
• Government, economic policy, and sovereign debt
• Demographics such as poverty, gender, and aid effectiveness
• Business, agriculture, and financial

The Bank analyzes development issues in depth, including the annual World Development Report. Its research reports examine global trends in trade, financial flows, and commodity prices, along with their impact on developing countries. The Bank also publishes the World Development Indicators and Global Development Finance. It provides the Little Data Book, Little Green Data Book, and The World Bank Atlas.

History of The Word Bank

The 1944 Bretton Woods Conference established The World Bank. Its loans helped European countries rebuild after World War II. That made it the world’s first multilateral development bank. 

It was funded through the sale of bonds. Its first loans were to France and other European countries. Since then, the Bank has worked with developing countries such as India and China on projects that include rail.

World Bank lending became controversial. Many countries used their loans to prevent a sovereign debt default. That debt was often a result of overspending and extensive borrowing. Even with the World Bank’s help, many countries devalued their currencies, which caused hyperinflation. 

To combat this, the Bank required austerity measures. Borrowing countries had to agree to cut back on spending and support their currency. Unfortunately, this usually caused a recession, making it difficult to repay the Bank’s loans.

Frequently Asked Questions (FAQs)