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Bretton Woods Revisited: The World Bank (part 2 of 4)

© Bryan Johnson

(Editors note: This is the second part of a four-part series analyzing the three major international organizations created out of the Bretton Woods agreement in 1944. The first article dealt with the General Agreement on Tariffs and Trade, now known as the World Trade Organization (WTO). This second article deals with the International Bank for Reconstruction and Development, commonly known as the World Bank. The third article will analyze the International Monetary Fund. The fourth article in the series will review the criticism of these organizations from various perspectives, and the justifications given for their continued existence by proponents.)

After World War II, the global economy was rife with high barriers to trade and investment, decimated industries in Europe and Japan, and an exchange rate system where the value of currencies were askew. In 1944, some 24 nations met in Bretton Woods New Hampshire to map out a post war strategy to revitalize the global economy. In 1947, this agreement forged the creation of three international organizations: the General Agreement on Tariffs and Trade (GATT), the International Bank for Reconstruction and Development (IBRD) and the International Monetary Fund.

The World Bank

Officially named the International Bank for Reconstruction and Development (IBRD), the World Bank was founded in 1944 by the 44 nations that met at Bretton Woods, N.H., to establish a new post-war international economic system. Today, the Bank has 180 members; only about a dozen nations are not members. The United States is the largest contributor, providing some $54 billion since 1944 (see World Bank annual reports, 1965 and 1997, the World Bank, Washington, D.C.). Even though the U.S. has reduced its funding as a percentage of the Bank's total deposits from 29.3 percent in 1965 to 17.5 percent in 1995, it remains the Bank's largest donor and has pledged more money to the Bank than any other country.

World Bank members provide contributions based on the size of their economies. The larger and wealthier the economy, the more the country is likely to give. A country's voting power is based on the amount of its contributions. Since the U.S. is the biggest donor, it therefore has the most voting power.

The World Bank is governed by several bodies. These are:

1.The Board of Governors. Overall authority resides with a president and a board of governors. The board includes one individual from each member country. It meets annually to receive a report on financial matters from the executive directors, an elected group of 25 representatives from the

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