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Consequently, the paper will look at the institutions’ purposes, structure and size, funding sources and recipients of the funding.
Most individuals find it difficult to distinguish between the IMF and the World Bank. Even one of its founding father (John Maynard Keynes) admittedly implied that he could not differentiate the two institutions during their inaugural meeting. The Bretton institution is a synonym for both IMF and the World Bank. This name originates from a New Hampshire village, USA where the institutions were founded in July 1994 by delegates from 44 countries. These two institutions are intergovernmental bases supporting the world’s financial and economic order structure. The United Nations setup the institutions with a division of labor notion.
Both agencies are directed and owned by their member states governments. For example, the most populous nation (china) and the world’s largest industrial power (USA) are member states. Generally, nearly all nations on earth are members of both agencies. Also, both agencies task themselves with financial and economic issue of their member countries. Therefore, they dedicate most of their efforts to strengthen and broaden their member states’ economies. Additionally, both agencies’ members attend international conferences and use the same tone to speak (they both have economics as their main theme). Lastly, the institutions hold common annual meetings. These meetings are extensively covered by the media.
The World Bank at its formation was assigned goals. Thus, it has a primary purpose of economic development financing. Its first loans were directed at the war torn economies of Europe during the 1940s. The bank refocused its goal to assisting the poorer nations after countries in Western Europe recovered and became economically self-sufficient. The bank has since advanced more than $330 billion dollars as loans to its members since its inception. Consequently, the World Bank
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The World Bank and International Monetary Fund (IMF) introduced structural adjustment programs, targeting developing countries in as preconditions for securing loans from the global financial institutions1. Since its inception, structural adjustment has had various impacts on the social economic development of the recipient countries.
The IMF and the World Bank
“The International Monetary Fund (IMF) and the World Bank are institutions in the United Nations system and are composed of member countries, 188 countries. Their approaches to this goal are complementary, with the IMF, focusing on macroeconomic issues and the World Bank concentrating on long-term economic development and poverty reduction” (IMF, 2012, p.
However, two years later, there was a conclusion of review of implementing poverty reduction strategies. There were numerous parties that made significant contribution to completion of this review; in fact, these parties included non-governmental organizations, World Bank and IMF.
It is no doubt the best tool for managing globalization but there is also the danger of declining of this tool when it is needed the most - in present times. The study deals with all such policies of World Bank, their implementation, its role in global economic reforms and the emerging challenges and the consequent evolving roles to handle the tough situations.
The disruptions confirmed "the potential for rapid and destabilizing spillovers among markets and countries and raised the prospect of a more challenging environment to come". He observed that the possibility of negative consequences of further adjustments originating from the U.S.
In the globalization era, the World Bank and the IMF play vital roles in shaping the economic, political and social state of affairs of nations. If we take a closer look into the affairs of these two organizations, we can clearly observe that at the start, the
to IMF and World Bank macroeconomic programmes prescribed for developing countries whose economies are going through the throes of stagnation, decline, debt, and fiscal imbalances. Adherence to structural adjustment programmes (SAPs) have been used by the IMF (and the World
The loan provided by these and other interlinked institutions are used as leverage to prescribe, dictate and in some cases impose the policies and reforms for improving economic conditions of these debt-ridden impoverished countries. Following the “one dollar, one