In 1944, the World Bank was founded, together with the International Monetary Fund (IMF), in Bretton Woods, New Hampshire, USA. Both institutions were intended to steer the reconstruction of Europe after World War II and to prevent undesirable developments, such as those that followed World War I. Today, both Bretton Woods institutions contribute to the achievement of international development goals, among other things by providing financial aid, advice as well as technical assistance. While the World Bank supports long-term development and reconstruction projects through favorable loans, the IMF’s tasks are more fiscal in nature, e.g., international cooperation on and monitoring of monetary policy.
How is the World Bank structured?
The World Bank is a specialized agency of the United Nations. It is led by the governments of member countries. However, contrary to the UN principle of “One Flag, One Vote”, the respective voting power within the World Bank corresponds to each shareholder’s financial commitment.
The central governing body of the World Bank is the 25-member Board of Directors, staffed by so-called Executive Directors (EDs). There are seven countries that hold an own seat, such as the USA, China, the United Kingdom, France, Germany, Saudi Arabia and Japan, while other shareholders form country groups.
Three Major Instruments:
The World Bank has three policy-based lending instruments: Development Policy Finance (DPF), Program for Results (PFR) finance, and technical assistance. These policy-based finance instruments account for over half of the World Bank’s total budget. With these instruments, the World Bank exerts decisive influence on countries’ energy supply. The World Bank’s clear preference for fossil fuels is alarming, while renewable energies remains secondary.