4.4.4 The World Bank

Who makes international economic decisions?



Public Domain
The World Bank was established to provide for the reconstruction of Europe after World War II. Many cities had been bombed and required extensive rebuilding. Recently, it has provided loans to
developing country
a country with a relatively low standard of living that is less industrialized and tends to have a moderate to low rating on the United Nations Human Development Index

A developing country is less developed in terms of education, health care, literacy, and life expectancy. A strong correlation occurs between low income and high population growth. The economy is usually based on agriculture and natural resources. Most such nations are in the southern hemisphere.

In the past, these countries were considered to be part of the "Third World", but that term is not used much today.

Use with care: Some believe that the term developing country implies inferiority. As well, it also implies that the least wealthy countries of the world are all moving forward in economic growth and social development. In reality, many of the poorest nations of the world are not progressing but they are actually becoming less wealthy.
developing countries for projects related to health, education, agriculture, infrastructure such as electricity and roads, government, and the courts.

For example, it loaned $40 million to Afghanistan to improve the water supply in Kabul and $20 million to improve crop and livestock production in rural areas.

The World Bank has also assisted the countries of Eastern Europe to make the transition from communism to free-market economies.

The World Bank is involved in 1800 projects in developing nations all over the world.

Who runs the World Bank? Both the World Bank and the International Monetary Fund are controlled primarily by the United States and the other major developed countries. The percentage of the funds contributed by a country to the fund determines the percentage of votes it is entitled to when deciding on issues of operation. The United States contributes 16.4% of the World Bank's funds; therefore, it has the most votes. Because all major decisions require an 85% majority, the United States can veto any decision made by the World Bank with which it disagrees.

The president of the World Bank is nominated by the President of the United States and confirmed by the World Bank's Board of Governors. In 2019, David Malpass became the thirteenth president. The president of the World Bank is always a US citizen.

Digging Deeper


Consider some of the development projects of the World Bank at its website, here.