World Bank

In its early years the Bank made a slow start for two reasons: it was underfunded, and there were leadership struggles between the US Executive Director and the president of the organization. When the Marshall Plan went into effect in 1947, many European countries began receiving aid from other sources. Faced with this competition, the World Bank shifted its focus to non-European countries. Until 1968, its loans were earmarked for the construction of infrastructure works, such as seaports, highway systems, and power plants, that would generate enough income to enable a borrower country to repay the loan. In 1960, the International Development Association was formed (as opposed to a UN fund named SUNFED), providing soft loans to developing countries.

Before 1974, the reconstruction and development loans the World Bank made were relatively small. Its staff was aware of the need to instill confidence in the bank. Fiscal conservatism ruled, and loan applications had to meet strict criteria.[9]^: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 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.[10]

From 1974 to 1980 the bank concentrated on meeting the basic needs of people in the developing world. The size and number of loans to borrowers greatly increased, as loan targets expanded from infrastructure into social services and other sectors.[11]

These changes can be attributed to Robert McNamara, who was appointed to the presidency in 1968 by Lyndon B. Johnson.[9]^:60–63 McNamara implored bank treasurer Eugene Rotberg to seek out new sources of capital outside of the northern banks that had been the primary sources of funding. Rotberg used the global bond market to increase the capital available to the bank.[12] One consequence of the period of poverty alleviation lending was the rapid rise of Third World debt. From 1976 to 1980, developing world debt rose at an average annual rate of 20%.[13][14]

The World Bank Administrative Tribunal was established in 1980, to decide on disputes between the World Bank Group and its staff where allegation of non-observance of contracts of employment or terms of appointment had not been honored.[15]

McNamara was succeeded by US President Jimmy Carter's nominee, Alden W. Clausen, in 1980.[16][17] Clausen replaced many members of McNamara's staff and crafted a different mission emphasis. His 1982 decision to replace the bank's Chief Economist, Hollis B. Chenery, with Anne Krueger was an example of this new focus. Krueger was known for her criticism of development funding and for describing Third World governments as "rent-seeking states".

During the 1980s the bank emphasized lending to service Third-World debt, and structural adjustment policies designed to streamline the economies of developing nations. UNICEF reported in the late 1980s that the structural adjustment programs of the World Bank had been responsible for "reduced health, nutritional and educational levels for tens of millions of children in Asia, Latin America, and Africa".[18]

Beginning in 1989, in response to harsh criticism from many groups, the bank began including environmental groups and NGOs in its loans to mitigate the past effects of its development policies that had prompted the criticism.[9]^:93–97 It also formed an implementing agency, in accordance with the Montreal Protocols, to stop ozone-depletion damage to the earth's atmosphere by phasing out the use of 95% of ozone-depleting chemicals, with a target date of 2015. Since then, in accordance with its so-called "Six Strategic Themes", the bank has put various additional policies into effect to preserve the environment while promoting development. For example, in 1991 the bank announced that to protect against deforestation, especially in the Amazon, it would not finance any commercial logging or infrastructure projects that harm the environment.

In order to promote global public goods, the World Bank tries to control communicable diseases such as malaria, delivering vaccines to several parts of the world, and joining combat forces. In 2000 the bank announced a "war on AIDS" and in 2011 the Bank joined the Stop Tuberculosis Partnership.[19]

Traditionally, based on a tacit understanding between the United States and Europe, the president of the World Bank has been selected from candidates nominated by the United States. This is significant because the World Bank tends to lend more readily to countries that are friendly with the United States, not because of direct U.S. influence but because of the employees of the World Bank.[20] In 2012, for the first time, two non-US citizens were nominated.

On 23 March 2012, U.S. President Barack Obama announced that the United States would nominate Jim Yong Kim as the next president of the Bank.[21] Jim Yong Kim was elected on 27 April 2012 and reelected to a second five-year term in 2017. He announced that he would resign effective 1 February 2019.[22] He was replaced on an interim basis by now-former World Bank CEO Kristalina Georgieva, then by David Malpass on 9 April 2019.

Amid the global fight with the COVID-19 pandemic, in September 2020 the World Bank announced a $12 billion plan to supply "low and middle income countries" with a vaccine once it is approved. The plan is set to affect over two billion people.[23]

The World Bank Group headquarters building in Washington, D.C.

Various developments brought the Millennium Development Goals targets for 2015 within reach in some cases. For the goals to be realized, six criteria must be met: stronger and more inclusive growth in Africa and fragile states, more effort in health and education, integration of the development and environment agendas, more as well as better aid, movement on trade negotiations, and stronger and more focused support from multilateral institutions like the World Bank.[24]

1. Eradicate Extreme Poverty and Hunger: From 1990 through 2004 the proportion of people living in extreme poverty fell from almost a third to less than a fifth. Although results vary widely within regions and countries, the trend indicates that the world as a whole can meet the goal of halving the percentage of people living in poverty. Africa's poverty, however, is expected to rise, and most of the 36 countries where 90% of the world's undernourished children live are in Africa. Less than a quarter of countries are on track for achieving the goal of halving under-nutrition.
2. Achieve Universal Primary Education: The percentage of children in school in developing countries increased from 80% in 1991 to 88% in 2005. Still, about 72 million children of primary school age, 57% of them girls, were not being educated as of 2005.
3. Promote Gender Equality: The tide is turning slowly for women in the labor market, yet far more women than men—worldwide more than 60%—are contributing but unpaid family workers. The World Bank Group Gender Action Plan was created to advance women's economic empowerment and promote shared growth.
4. Reduce Child Mortality: There is some improvement in survival rates globally; accelerated improvements are needed most urgently in South Asia and Sub-Saharan Africa. An estimated 10 million-plus children under five died in 2005; most of their deaths were from preventable causes.
5. Improve Maternal Health: Almost all of the half-million women who die during pregnancy or childbirth every year live in Sub-Saharan Africa and Asia. There are numerous causes of maternal death that require a variety of health care interventions to be made widely accessible.
6. Combat HIV/AIDS, Malaria, and Other Diseases: Annual numbers of new HIV infections and AIDS deaths have fallen, but the number of people living with HIV continues to grow. In the eight worst-hit southern African countries, prevalence is above 15 percent. Treatment has increased globally, but still meets only 30 percent of needs (with wide variations across countries). AIDS remains the leading cause of death in Sub-Saharan Africa (1.6 million deaths in 2007). There are 300 to 500 million cases of malaria each year, leading to more than 1 million deaths. Nearly all the cases and more than 95 percent of the deaths occur in Sub-Saharan Africa.
7. Ensure Environmental Sustainability: Deforestation remains a critical problem, particularly in regions of biological diversity, which continues to decline. Greenhouse gas emissions are increasing faster than energy technology advancement.
8. Develop a Global Partnership for Development: Donor countries have renewed their commitment. Donors have to fulfill their pledges to match the current rate of core program development. Emphasis is being placed on the Bank Group's collaboration with multilateral and local partners to quicken progress toward the MDGs' realization.

To ensure that World Bank-financed operations do not compromise these goals but instead add to their realisation, the following environmental, social, and legal safeguards were defined: Environmental Assessment, Indigenous Peoples, Involuntary Resettlement, Physical Cultural Resources, Forests, Natural Habitats, Pest Management, Safety of Dams, Projects in Disputed Areas, Projects on International Waterways, and Performance Standards for Private Sector Activities.[25]

At the World Bank's 2012 annual meeting in Tokyo, a review of these safeguards was initiated, which was welcomed by several civil society organisations.[26] As a result, the World Bank developed a new Environmental and Social Framework, which has been in implementation since October 1, 2018.[27]

In 2010 voting powers at the World Bank were revised to increase the voice of developing countries, notably China. The countries with most voting power are now the United States (15.85%), Japan (6.84%), China (4.42%), Germany (4.00%), the United Kingdom (3.75%), France (3.75%), India (2.91%),[40] Russia (2.77%), Saudi Arabia (2.77%) and Italy (2.64%). Under the changes, known as 'Voice Reform – Phase 2', countries other than China that saw significant gains included South Korea, Turkey, Mexico, Singapore, Greece, Brazil, India, and Spain. Most developed countries' voting power was reduced, along with a few developing countries such as Nigeria. The voting powers of the United States, Russia and Saudi Arabia were unchanged.[41][42]

The changes were brought about with the goal of making voting more universal in regards to standards, rule-based with objective indicators, and transparent among other things. Now, developing countries have an increased voice in the "Pool Model", backed especially by Europe. Additionally, voting power is based on economic size in addition to the International Development Association contributions.[43]

World Bank President Jim Yong Kim said in 2012:

A 4-degree warmer world can, and must be, avoided—we need to hold warming below 2 degrees ... Lack of action on climate change threatens to make the world our children inherit a completely different world than we are living in today. Climate change is one of the single biggest challenges facing development, and we need to assume the moral responsibility to take action on behalf of future generations, especially the poorest.[50]

A World Bank report into climate change in 2012 noted that (p. xiii) "even with the current mitigation commitments and pledges fully implemented, there is roughly a 20 percent likelihood of exceeding 4 °C by 2100." This is despite the fact that the "global community has committed itself to holding warming below 2 °C to prevent 'dangerous' climate change". Furthermore, "a series of recent extreme events worldwide highlight the vulnerability of all countries ... No nation will be immune to the impacts of climate change."[51]

The World Bank doubled its aid for climate change adaptation from $2.3bn (£1.47bn) in 2011 to $4.6bn in 2012. The planet is now 0.8 °C warmer than in pre-industrial times. It says that 2 °C warming will be reached in 20 to 30 years.[52][53]

In December 2017, Kim announced the World Bank would no longer finance fossil fuel development,[54][55] but a 2019 International Consortium of Investigative Journalists article found that the Bank continues "to finance oil and gas exploration, pipelines and refineries," that "these fossil fuel investments make up a greater share of the bank’s current energy lending portfolio than renewable projects," and that the Bank "has yet to meaningfully shift away from fossil fuels."[56]

EU finance ministers joined civil sector groups, including Extinction Rebellion, in November 2019 in calling for an end to World Bank funding of fossil fuels.[57][58][59]

1. Global Food Security Program: Launched in April 2010, six countries alongside the Bill and Melinda Gates Foundation have pledged $925 million for food security. To date, the program has helped eight countries, promoting agriculture, research, trade in agriculture, etc.
2. Launched Global Food Crisis Response Program: Given grants to approximately 40 nations for seeds, etc. for improving productivity.
3. In process of increasing its yearly spending for agriculture to $6–8 billion from earlier $4 billion.
4. Runs various nutrition programs across the world, e.g., vitamin A doses for children, school meals, etc.[60]

The World Bank Institute (WBI) was a "global connector of knowledge, learning and innovation for poverty reduction". It aimed to inspire change agents and prepare them with essential tools that can help achieve development results. WBI had four major strategies to approach development problems: innovation for development, knowledge exchange, leadership and coalition building, and structured learning. World Bank Institute (WBI) was formerly known as Economic Development Institute (EDI), established on 11 March 1955 with the support of the Rockefeller and Ford Foundations. The purpose of the institute was to provide an open place where senior officials from developing countries could discuss development policies and programs. Over the years, EDI grew significantly and in 2000, the institute was renamed as the World Bank Institute. Sanjay Pradhan is the past Vice President of the World Bank Institute.[61] As of 2019, World Bank Institute functions have been mostly encapsulated by a new unit Global Operations Knowledge Management Unit (GOKMU), which is now responsible for knowledge management and learning across the Bank.

The Global Development Learning Network (GDLN) is a partnership of over 120 learning centers (GDLN Affiliates) in nearly 80 countries around the world. GDLN Affiliates collaborate in holding events that connect people across countries and regions for learning and dialogue on development issues.

GDLN clients are typically NGOs, government, private sector, and development agencies who find that they work better together on subregional, regional, or global development issues using the facilities and tools offered by GDLN Affiliates. Clients also benefit from the ability of Affiliates to help them choose and apply these tools effectively and to tap development practitioners and experts worldwide. GDLN Affiliates facilitate around 1000 video conference-based activities a year on behalf of their clients, reaching some 90,000 people worldwide. Most of these activities bring together participants in two or more countries over a series of sessions. A majority of GDLN activities are organized by small government agencies and NGOs.

The GDLN in the East Asia and Pacific region has experienced rapid growth and Distance Learning Centers now operate or are planned in 20 countries: Australia, Mongolia, Cambodia, China, Indonesia, Singapore, Philippines, Sri Lanka, Japan, Papua New Guinea, South Korea, Thailand, Laos, Timor Leste, Fiji, Afghanistan, Bangladesh, India, Nepal, and New Zealand. With over 180 Distance Learning Centers, it is the largest development learning network in the Asia and Pacific region. The Secretariat Office of GDLN Asia Pacific is located in the Center of Academic Resources of Chulalongkorn University, Bangkok, Thailand.

GDLN Asia Pacific was launched at the GDLN's East Asia and Pacific regional meeting held in Bangkok from 22 to 24 May 2006. Its vision is to become "the premier network exchanging ideas, experience and know-how across the Asia Pacific Region". GDLN Asia Pacific is a separate entity to The World Bank. It has endorsed its own Charter and Business Plan and, in accordance with the Charter, a GDLN Asia Pacific Governing Committee has been appointed.

The committee comprises China (2), Australia (1), Thailand (1), The World Bank (1), and finally, a nominee of the Government of Japan (1). The organization is currently hosted by Chulalongkorn University in Bangkok, Thailand, a founding member of the GDLN Asia Pacific.

The Governing Committee has determined that the most appropriate legal status for the GDLN AP in Thailand is a "Foundation". The World Bank is engaging a solicitor in Thailand to process all documentation in order to obtain this status.

GDLN Asia Pacific is built on the principle of shared resources among partners engaged in a common task, and this is visible in the organizational structures that exist, as the network evolves. Physical space for its headquarters is provided by the host of the GDLN Centre in Thailand – Chulalongkorn University; Technical expertise and some infrastructure is provided by the Tokyo Development Learning Centre (TDLC); Fiduciary services are provided by Australian National University (ANU) Until the GDLN Asia Pacific is established as a legal entity in Thailand, ANU, has offered to assist the governing committee, by providing a means of managing the inflow and outflow of funds and of reporting on them. This admittedly results in some complexity in contracting arrangements, which need to be worked out on a case-by-case basis and depends to some extent on the legal requirements of the countries involved.

A Justice Sector Peer-Assisted Learning (JUSTPAL) Network was launched in April 2011 by the Poverty Reduction and Economic Management (PREM) Department of the World Bank's Europe and Central Asia (ECA) Region. JUSTPAL's objective is to provide an online and offline platform for justice professionals to exchange knowledge, good practices, and peer-driven improvements to justice systems and thereby support countries to improve their justice sector performance, quality of justice, and service delivery to citizens and businesses.

The JUSTPAL Network includes representatives of judiciaries, ministries of justice, prosecutors, anti-corruption agencies, and other justice-related entities from across the globe. It has active members from more than 50 countries.

To facilitate fruitful exchange of reform experiences and sharing of applicable good practices, JUSTPAL has organized its activities under five Communities of Practice (COPs): Budgeting for the Justice Sector; Information Systems for Justice Services; Justice Sector Physical Infrastructure; Court Management and Administration; and Prosecution and Anti-Corruption Agencies.

The effect of structural adjustment policies on poor countries has been one of the most significant criticisms of the World Bank.[88] The 1979 energy crisis plunged many countries into economic crisis.[89]^:68 The World Bank responded with structural adjustment loans, which distributed aid to struggling countries while enforcing policy changes in order to reduce inflation and fiscal imbalance. Some of these policies included encouraging production, investment and labour-intensive manufacturing, changing real exchange rates, and altering the distribution of government resources. Structural adjustment policies were most effective in countries with an institutional framework that allowed these policies to be implemented easily. For some countries, particularly in Sub-Saharan Africa, economic growth regressed and inflation worsened.

By the late 1980s, some international organizations began to believe that structural adjustment policies were worsening life for the world's poor, due to a reduction in social spending and an increase in the price of food, as subsidies were lifted. The World Bank changed structural adjustment loans, allowing for social spending to be maintained, and encouraging a slower change to policies such as transfer of subsidies and price rises.[89]^:70 In 1999, the World Bank and the IMF introduced the Poverty Reduction Strategy Paper approach to replace structural adjustment loans.[90]^:147

Some critics,[91] most prominently the author Naomi Klein, are of the opinion that the World Bank Group's loans and aid have unfair conditions attached to them that reflect the interests, financial power and political doctrines (notably the Washington Consensus) of the Bank and, by extension, the countries that are most influential within it. Among other allegations, Klein says the Group's credibility was damaged "when it forced school fees on students in Ghana in exchange for a loan; when it demanded that Tanzania privatise its water system; when it made telecom privatisation a condition of aid for Hurricane Mitch; when it demanded labour 'flexibility' in Sri Lanka in the aftermath of the Asian tsunami; when it pushed for eliminating food subsidies in post-invasion Iraq".[92]

The World Bank requires sovereign immunity from countries it deals with.[93][94][95] Sovereign immunity waives a holder from all legal liability for their actions. It is proposed that this immunity from responsibility is a "shield which The World Bank wants to resort to, for escaping accountability and security by the people".[93] As the United States has veto power, it can prevent the World Bank from taking action against its interests.[93]

World Bank favored PricewaterhouseCoopers as a consultant in a bid for privatizing the water distribution in Delhi, India.[96]

The World Bank has been criticized for the slow response of its Pandemic Emergency Financing Facility (PEF), a fund that was created to provide money to help manage pandemic outbreaks. The terms of the PEF, which is financed by bonds sold to private investors, prevent any money from being released from the fund until 12 weeks after the outbreak was initially detected (23 March). The COVID-19 outbreak met all other requirements for the funding to be released in January 2020.[97]

Critics have argued that the terms of the PEF are too stringent, and the 12-week delay means that the funding will be much less effective than if it was released to assist governments in initially containing the outbreak. They argue that the fund prioritizes the interests of the private bondholders over public health.[98]

It is hoped that as the 2030 deadline for achieving the targets of the United Nations Sustainable Development Goal 10 aimed at reducing inequality[99] approaches, the World Bank will be a major player in making it a reality.