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2. Global Economic Development

World Bank and International Monetary Fund 1

  • The Bretton Woods institutions:
    • World Bank.
    • International Monetary Fund (IMF).
  • Experts argue for abandoning the institutions’ traditional mission of poverty elimination, economic development, and financial stability to mainly focus instead on addressing climate change.
  • Although the World Bank and the IMF are ostensibly structured as financial institutions with shareholders and clients, they are unlike private corporations in that they lack the natural governance mechanism of the profit motive.
  • Their shareholders—sovereign governments—are motivated not by pecuniary gain but by a complex set of geopolitical considerations.
  • The World Bank’s own Independent Evaluation Group acknowledges that the World Bank has “too many priorities” and that accountability for results is weak. As a result, the World Bank is primarily interested in making new loans, with few consequences in terms of missing development targets.
  • Most research and after-action reports are not typically considered when new projects are being designed. Borrower oversight and enforcement of contractual obligations are lacking.
  • Recent years have seen a series of scandals undermining credibility.
  • The large bureaucracies—and the legal immunities that both institutions enjoy—contribute to a culture that can lack accountability.
  • The World Bank also lacks accountability for projects gone wrong.
  • At the same time, reports of cultural genocide connected to World Bank projects in Western China among the Uyghurs appear to be still un-investigated.
  • Similarly, the World Bank seems to lack the discipline to hew to its mandate of encouraging economic development in poor countries, instead succumbing to both mandate expansion and inertia.
  • At the planning level, much of the programming stems from the five-year Country Partnership Frameworks (CPFs), which are negotiated between staff and sovereigns. CPFs guide all project finance but are not subject to a vote of the board.
  • However, the nature of the climate change problem set makes it uniquely unsuited as a focus of action for the Bretton Woods institutions given the inherent trade-offs between carbon reduction and economic growth, limited resources, human rights, and the realities of international financial institution governance.

World Trade Organization 2

  • By 2015, more than 95 percent of global goods trade was covered by WTO rules and more than 50% flowed between RTA partners.

Video Resources 3 4

References

  1. Nordquist, J., & Katz, D. (2024). The World Bank and International Monetary Fund should do less to achieve more. The Center for Strategic & International Studies. https://www.csis.org/analysis/world-bank-and-international-monetary-fund-should-do-less-achieve-more ↩

  2. World Trade Organization. (2023). The reshaping of global trade. In World Trade Report 2023. https://www.wto.org/english/res_e/publications_e/wtr23_e.htm ↩

  3. IMF. (2017, July 10). How the IMF works [Video]. Youtube https://www.youtube.com/watch?v=knVMZbpfIu8 ↩

  4. CNBC International. (2017, October 12). What’s the difference between the IMF and the World Bank? [Video]. YouTube. https://www.youtube.com/watch?v=lN3qrFA4jXc ↩