AN ANALYSIS OF THE RELATIONSHIP BETWEEN WORLD BANK AND DEVELOPING COUNTRIES - Essay Example

development, namely, means for a long and a healthy life, access to education and access to physical resources which help in a better sustenance of life (Sagar & Najam, 1997, p. 250). Human development thus, is multidimensional in nature, which is automatically served out of overall economic and social progress. The World Bank, however, had been actively involved in alleviating all elements which have been responsible for an underprivileged human life, through implementing investment projects in various aspects.

Creation of the organization had been the consequence of the Bretton-Woods Commission held in 1944 following the World War II, to resolve issues such as financial insolvency arising out of depreciation in currency values. Developmental economics supports two approaches to prop up overall growth in an economy, namely, balanced and unbalanced. Though an external push is required in both the cases, in case of balanced growth, the effect is often considered to be a diluted one, which is why unbalanced growth is preferred more in nations suffering from a scarcity of resources.

3 Unbalanced growth in fact, had been supported by a large number of economists. Rosenstein Rodan, the proponent of Big Push theory established the importance of unbalanced growth which he regarded to be essential for the developing nations to break out of the low level equilibrium trap, i.e., for economies which did not have high growth potentials. These investments however, were emphasized for industrial or infrastructural development, which is considered as a fundamental area which can trigger economic growth.

But given the lack of investible resources, it was not possible for the national governments themselves to carry on with their investments; in fact they had to seek the help of international organizations like the World Bank which were responsible for resource mobilization activities. The bank established in 1944, had been involved in such development activities hitherto, which