The World Bank is an international financial institution that provides loans to developing countries
The World Bank (French: Banque mondiale)[3] is an international financial institution that provides loans[4] to countries of the world for capital projects. It comprises two institutions: the International Bank for Reconstruction and Development (IBRD), and the International Development Association (IDA). The World Bank is a component of the World Bank Group.
The World Bank's most recent stated goal is the reduction of poverty.[5] As of November 2018, the largest recipients of world bank loans were India ($859 million in 2018) and China ($370 million in 2018), through loans from IBRD
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.[9] 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.[10]:52–54 The intention behind the founding of the World Bank was to provide temporary loans to low-income countries which were unable to obtain loans commercially.[5] The Bank may also make loans and demand policy reforms from recipients
1944–1974
Before 1974, the reconstruction and development loans provided by the World Bank were relatively small. The Bank's staff were aware of the need to instill confidence in the bank. Fiscal conservatism ruled, and loan applications had to meet strict criteria.[10]:56–60
The first country to receive a World Bank loan was France. The Bank's president at the time, John McCloy, chose France over two other applicants, Poland and Chile. The loan was for US$250 million, half the amount requested, and it came with strict conditions. France had to agree to produce a balanced budget and give priority of debt repayment to the World Bank over other governments. World Bank staff closely monitored the use of the funds to ensure that the French government met the conditions. In addition, before the loan was approved, the United States State Department told the French government that its members associated with the Communist Party would first have to be removed. The French government complied and removed the Communist coalition government - the so-called tripartite. Within hours, the loan to France was approved