World Bank

World Bank (est. 1944).At the July 1944 Bretton Woods Conference in Bretton Woods, New Hampshire, forty‐four nations, including the United States, Great Britain, and the Soviet Union, agreed to establish the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (IBRD, but called the World Bank) to provide loans to governments for postwar economic reconstruction. The IBRD officially came into existence on 27 December 1945, when states holding 65 percent of the bank's shares approved the agreement. The bank's headquarters are in Washington, D.C. Each of the 179 member states has one representative on the board of governors. Each state's voting power, however, depends on the number of bank shares held by the state. The United States as the single largest investor currently holds 16.53 percent of the shares.

The World Bank's membership and objectives were affected by the Cold War. The Soviet Union never joined the bank; post–Soviet Russia, however, became a member on 1 June 1992. In 1948–52, the European Recovery Program—the Marshall Plan—superseded the IBRD as the primary reconstruction aid provider for Western Europe. The bank's main objective became making or guaranteeing loans to developing states. Since the early 1990s, aid to Eastern European countries, including member states of the former Soviet Union, has become an increasingly important aspect of the bank's work. In January 1996, the IBRD granted Bosnia a $150 million loan to aid rebuilding after the end of its civil war.

From its inception to 30 June 1998, the World Bank has granted 7,112 loans to 168 recipients, totaling $425 billion. African states received 18 percent of that amount, Asian and Pacific countries 42 percent, Near Eastern states 3 percent, European countries (including Russia) 12 percent, and Latin American and Caribbean states 25 percent.
[See also Bosnian Crisis.]

Bibliography

Robert W. Oliver , International Economic Cooperation and the World Bank, 1975.
Michael D. Bordon and Barry Eichengreen, eds., A Retrospective on the Bretton Woods System, 1993.

Georg Schild

World Bank. Delegates to the Bretton Woods Conference of 1944 understood that creating a lending institution devoted to extending credit for postwar rebuilding and development was essential to reviving the economy of a war‐ravaged world. The result was the International Bank for Reconstruction and Development (IBRD), or World Bank. As with the simultaneously created International Monetary Fund, the IBRD primarily reflected American ideas. Since the size of a country's voting rights depended on the amount of its capital subscription, the United States as the largest contributor has had the biggest say in selecting the president, who has usually been an American. The American determination to keep the initial subscription low, however, rendered the World Bank unable to cope with the economic crises of the immediate postwar period. Instead, ad hoc American loans and the U.S.‐funded Marshall Plan paid for the recovery of western Europe.

In the decade after 1946, major World Bank loans went to war‐devastated industrial countries; thereafter the proportion of credits devoted to reconstruction plummeted. Under the presidency of Robert McNamara (1968–1981), the World Bank devoted itself to assisting the developing world, which generally lacked both internal and external private sources for development. Having initially concentrated on large‐scale infrastructure, such as dams and ports, the World Bank increasingly funded “soft projects” such as agricultural development, population control, urban sewage supply, and educational endeavors. At the end of the 1970s the World Bank Group (consisting of the IBRD, the International Finance Corporation, and the Multilateral Investment Guaranty Corporation) also began lending for some nondevelopment purposes, such as bridging a balance‐of‐payments problem. With the American electorate largely oblivious to the World Bank's activities, U.S. presidents found it highly convenient to channel increasingly unpopular foreign aid projects through this multilateral organization, thereby avoiding serious congressional or public scrutiny.
See also Foreign Relations: The Economic Dimension; Global Economy, America and the; Internationalism; World War II: Postwar Impact.

Bibliography

Devesh Kapur,, John P. Lewis,, and and Richard Webb , The World Bank: Its First Half Century, 1997.

Diane B. Kunz

World Bank (International Bank for Reconstruction and Development, IBRD) Intergovernmental organization, a specialized agency of the United Nations (UN) since 1945. Its role is to make long-term loans to member governments to aid their economic development. The bank dervies the majority of its resources from the world's capital markets. Its headquarters are in Washington, D.C.