What is the difference between the World Bank and the IMF?
Despite these and other similarities, however, the Bank and the IMF remain distinct. The fundamental difference is this: the Bank is primarily a development institution; the IMF is a cooperative institution that seeks to maintain an orderly system of payments and receipts between nations.
- IMF primarily is in existence to deal with economic crises from occurring. Monitor exchange rates to prevent complete economic meltdowns. - World bank is aimed towards development. Many developing states often have have trouble getting $$$ for development so it provides them with loans.
The organizations that make up the World Bank Group are owned by the governments of member nations, which have the ultimate decision-making power within the organizations on all matters, including policy, financial or membership issues.
The IMF has three critical missions: furthering international monetary cooperation, encouraging the expansion of trade and economic growth, and discouraging policies that would harm prosperity.
Accused of being secretive, unaccountable, and ineffective, both the International Monetary Fund and the World Bank are seeking to become more transparent, more participatory, and more accountable. Yet few attempts have been made to dissect the existing structure of accountability within the organizations.
The organizations that make up the World Bank Group are owned by the governments of member nations. They make decisions on all matters, including policy, financial or membership issues.
The IMF was established to maintain order in the international monetary system; the World Bank was set up to promote economic development.
As of 2022, the World Bank is run by a president and 25 executive directors, as well as 29 various vice presidents. IBRD and IDA have 189 and 174 member countries, respectively. The U.S., Japan, China, Germany and the U.K. have the most voting power.
The IMF's resources mainly come from the money that countries pay as their capital subscription (quotas) when they become members. Each member of the IMF is assigned a quota, based broadly on its relative position in the world economy.
Which country has the highest loan from the IMF?
| Member | Total IMF Credit Outstanding as of 03/31/2024 | Total IMF Credit Outstanding as of 04/23/2024 |
|---|---|---|
| Argentina | 32,450,000,000 | 32,450,000,000 |
| Armenia, Republic of | 257,725,848 | 257,725,848 |
| Bahamas, The | 114,000,000 | 114,000,000 |
| Bangladesh | 1,353,626,550 | 1,353,626,550 |
Although governments do hold power over countries' economies, it is the big banks and large corporations that control and essentially fund these governments. This means that the global economy is dominated by large financial institutions.
Lack of Transparency and Accountability: The World Bank has also been criticized for its lack of transparency and accountability. Critics argue that the Bank has not been transparent in its decision-making processes, and that it has not adequately engaged with civil society and other stakeholders in its operations.
The impact of IMF loans has been widely debated. Opponents of the IMF argue that the loans enable member countries to pursue reckless domestic economic policies knowing that, if needed, the IMF will bail them out. This safety net, critics charge, delays needed reforms and creates long-term dependency.
Critics of the World Bank argue that structural adjustment loans are a mechanism of forcing free market economics on countries through coercion. Countries with a debt crisis, whatever their other characteristics, agree to the bank's package of legal and economic reforms, and the bank agrees to lend them money.
In other words, the United States has more formal power than any other state in all the agencies of oversight and management of the IMF and the World Bank. In the executive boards of each of the Bank and the Fund all members are represented but not all are directly represented and nor do they enjoy equal voting power.
- Andorra.
- Cuba.
- Liechtenstein.
- Monaco.
- North Korea.
The Secretary of the Treasury serves as the U.S. Governor to the IMF, and the U.S. Executive Director of the IMF is one of 24 directors who exercise voting rights over the strategic direction of the institution. The U.S. is the largest shareholder in the Fund.
Together with four affiliated agencies created between 1957 and 1988, the IBRD is part of the World Bank Group. The group's headquarters are in Washington, D.C. It is an international organization owned by member governments; although it makes profits, they are used to support continued efforts in poverty reduction.
Using a sample of 81 developing countries from 1986 to 2016, we find that IMF loan arrangements containing structural reforms contribute to more people getting trapped in the poverty cycle, as the reforms involve deep and comprehensive changes that tend to raise unemployment, lower government revenue, increase costs of ...
What is the Bretton Woods Act?
Key Takeaways. The Bretton Woods Agreement and System created a collective international currency exchange regime that lasted from the mid-1940s to the early 1970s. The Bretton Woods System required a currency peg to the U.S. dollar which was in turn pegged to the price of gold.
China's central government borrows on their behalf both domestically and abroad. World Bank loans are attractive in this regard, since its interest rates — which are linked to rates in U.S. financial markets — are lower than the lending rates in China.
United States At-A-Glance
As the only World Bank shareholder that retains veto power over changes in the Bank's structure, the United States plays a unique role in influencing and shaping development priorities.
India takes the top spot. Its $39.7bn debt towards the WB recorded at the end of 2021 is double that of the next biggest debtor, Indonesia, with $19.6bn.
The estimated total pay range for a President at The World Bank is $190K–$354K per year, which includes base salary and additional pay. The average President base salary at The World Bank is $200K per year.
