Time to rethink how the World Bank operates (2024)

One for Year 13 economists. Larry Elliott looks here at the future of the World Bank in the aftermath and asks the pertinent question about whether an institution that emerged in the aftermath of World War Two is still fit for purpose in 2023.

In particular, the power of the United States in effectively being able to select the Bank's president, is a bone of contention. He argues that developing economies need their own advocate to push their agenda, rather than having to rely upon the 'generosity' of developed economies.

The World Bank is an international financial institution that provides loans, grants, and other assistance to developing countries with the aim of reducing poverty and promoting economic development. It was established in 1944 and is headquartered in Washington, D.C., United States. The World Bank has two main arms: the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA).

The IBRD provides loans and other financial assistance to middle-income and creditworthy low-income countries, while the IDA provides grants and low-interest loans to the world's poorest countries. In addition to providing financial assistance, the World Bank also conducts research, collects data, and provides analysis and advice to governments and other organizations on economic and social development issues.

The World Bank has 189 member countries, and its operations are financed by member country contributions, borrowing in the capital markets, and earnings from its investments.

Criticisms of the World Bank

The World Bank has faced criticism in recent years on various fronts. Some of the major criticisms include:

  1. Conditionality: The World Bank has been criticized for attaching conditions to its loans and assistance, which are often referred to as "policy conditionality." Critics argue that these conditions can be onerous and may not reflect the needs and priorities of the recipient countries. Additionally, some argue that these conditions can exacerbate existing social and economic inequalities in recipient countries.
  2. Environmental and Social Impacts: The World Bank has also faced criticism for its environmental and social impact policies. Critics argue that the Bank has funded projects that have had negative environmental and social impacts, including forced displacement of communities, destruction of ecosystems, and human rights violations.
  3. Lack of Transparency and Accountability: The World Bank has also been criticized for its lack of transparency and accountability. Critics argue that the Bank has not been transparent in its decision-making processes, and that it has not adequately engaged with civil society and other stakeholders in its operations.
  4. Influence of Major Shareholders: The World Bank has also faced criticism for the influence of major shareholders, particularly the United States. Critics argue that the Bank's decision-making processes are influenced by major shareholders, which can lead to policies that reflect the interests of those countries rather than the needs of recipient countries.

Overall, the World Bank has faced criticism for its role in promoting economic development and poverty reduction, and there are ongoing debates about the effectiveness of its policies and operations. The Bank has responded to some of these criticisms by revising its policies and procedures and engaging more with civil society and other stakeholders.

Time to rethink how the World Bank operates (2024)

FAQs

What is the World Bank long answer? ›

The World Bank is an international organization dedicated to providing financing, advice, and research to developing nations to aid their economic advancement. The bank predominantly acts as an organization that attempts to fight poverty by offering developmental assistance to middle- and low-income countries.

How does the World Bank operate? ›

We provide low-interest loans, zero to low-interest credits, and grants to developing countries. These support a wide array of investments in such areas as education, health, public administration, infrastructure, financial and private sector development, agriculture, and environmental and natural resource management.

What does the World Bank try to improve? ›

Its role is to reduce poverty by lending money to the governments of its poorer members to improve their economies and to improve the standard of living of their people. The Bank is also one of the world's largest research centers in development.

What are some problems with the World Bank? ›

Lack of Transparency and Accountability: The World Bank has also been criticized for its lack of transparency and accountability. Critics argue that the Bank has not been transparent in its decision-making processes, and that it has not adequately engaged with civil society and other stakeholders in its operations.

How to pass a World Bank interview? ›

> Respond promptly to show interest.

> Research the interviewers, the organization, and the sector/department/ division. In addition to reading, talk with others who might have knowledge. Based on what you learned, prepare questions you can ask about the organization, department, and/or position.

What is the main goal of World Bank? ›

End extreme poverty within a generation and boost shared prosperity. The World Bank Group has two ambitious goals: End extreme poverty within a generation and boost shared prosperity.

Who controls the World Bank? ›

The organizations that make up the World Bank Group are owned by the governments of member nations, which have the ultimate decision-making power within the organizations on all matters, including policy, financial or membership issues.

What are 3 functions of the World Bank? ›

The World Bank promotes long-term economic development and poverty reduction by providing technical and financial support to help countries implement reforms or projects, such as building schools, providing water and electricity, fighting disease, and protecting the environment.

What does the World Bank need to do now? ›

Enhanced Support for the Poorest: The World Bank must continue to pay sufficient attention to the needs of the poorest and most vulnerable countries, which are facing multiple, compounding crises, including those stemming from global challenges.

How effective is the World Bank? ›

The World Bank has had several successful interventions, in the estimation of many observers. With bank support, Bosnia went from being a war-torn, low-income economy in 1995 to becoming an upper-middle-income economy today.

Who controls the world economy? ›

Although governments do hold power over countries' economies, it is the big banks and large corporations that control and essentially fund these governments. This means that the global economy is dominated by large financial institutions.

What are the advantages and disadvantages of World Bank? ›

Advantages And Disadvantages
AdvantagesDisadvantages
Removing poverty, corruptionUnfair conditions
Funding government projectsPartiality in decision making
Protecting the environment and climateFailed to fulfill promises
Solve economic, social, and political issues
4 more rows

Which country has taken the highest loan from World Bank? ›

S.N.CountryDebt (in million dollar)
1.China2420
2.India1776
3.Indonesia1692
4.Colombia1687
6 more rows
Jul 3, 2018

What countries are not part of the World Bank? ›

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.

What is the World Bank short summary? ›

The World Bank Group is one of the world's largest sources of funding and knowledge for developing countries. Its five institutions share a commitment to reducing poverty, increasing shared prosperity, and promoting sustainable development.

Who does the World Bank answer to? ›

Member countries govern the World Bank Group through the Boards of Governors and the Boards of Executive Directors. These bodies make all major decisions for the organizations.

What is the World Bank Quizlet? ›

The World Bank Group is a partner in opening markets and strengthening economies. Its goal is to improve the quality of life and increase prosperity for people everywhere, especially the world's poorest.

What is the World Bank world History? ›

Since its founding in 1944, the World Bank has evolved from a lender focused on European reconstruction to the preeminent international institution for economic development and poverty reduction. The World Bank is a group of five multilateral institutions that aim to eradicate global poverty.

References

Top Articles
Latest Posts
Article information

Author: The Hon. Margery Christiansen

Last Updated:

Views: 6325

Rating: 5 / 5 (70 voted)

Reviews: 85% of readers found this page helpful

Author information

Name: The Hon. Margery Christiansen

Birthday: 2000-07-07

Address: 5050 Breitenberg Knoll, New Robert, MI 45409

Phone: +2556892639372

Job: Investor Mining Engineer

Hobby: Sketching, Cosplaying, Glassblowing, Genealogy, Crocheting, Archery, Skateboarding

Introduction: My name is The Hon. Margery Christiansen, I am a bright, adorable, precious, inexpensive, gorgeous, comfortable, happy person who loves writing and wants to share my knowledge and understanding with you.