FREQUENTLY ASKED QUESTIONS

What is the World Bank?
The World Bank aims to help countries reduce poverty by making long-term loans to governments for projects such as dams or bridges, or to back economic reform programmes. The World Bank also produces many influential research reports and has affiliates which back private companies investing in poor countries.

What is the IMF?
The International Monetary Fund seeks to maintain an orderly balance of international trade and payments by regularly assessing economies and making short-term loans to those with balance of payments difficulties. Countries wanting to join the World Bank must first become members of the IMF.

Why are they so important?
The two agencies determine whether developing countries get access to aid money and how it is spent. Northern governments use them to carry out certain foreign and commercial policy objectives, but as multilateral institutions they have the potential to foster cooperative international approaches on key issues such as environmental change.

Can they be reformed?
Most incoming World Bank Presidents promise major reforms, normally emphasising poverty and the environment. The latest, James Wolfensohn, is being particularly bold in his aims and has unveiled a number of positive initiatives towards openness and a more balanced view of economic reform. But many previous plans have been thwarted by the Bank's institutional culture, which prevents internal debate, and rewards large loans regardless of whether they help poor people. The IMF remains a very secretive and technocratic organisation with little concern for poverty or environmental issues, but recently has made some attempts to open up.

Who makes the decisions?
Each country is formally represented in each institution by a Governor (normally the Minister of Finance or of Overseas Development), but in practice almost all decisions are delegated to an Executive Director, an official who is posted to Washington for about 3 years. Whilst 180 countries are now members of the IMF and World Bank, there are only 24 Executive Directors. Voting power is allocated according to the amount of money contributed to the Bank, which in turn depends on the country's economic strength. For example the UK has a voting share of about 5.5 per cent and the US nearly 20 per cent. The President of the Bank is, by convention, a US citizen and the Managing Director of the IMF is a European.

How can I make a difference?
Get informed and tell others. Not enough people know what is going on with these distant international agencies. If you are from a rich country your government (Finance, Foreign Affairs or Aid/International Cooperation Ministries) is contributing your aid money to the World Bank and IMF, and will have a strong voice in how Bank money is used. You can contact your Ministers or officials to make your views known and ask for their response. If you are from a developing country then you now have the right to obtain information about what the World Bank and IMF are doing in your countries.

Best books for a more in-depth background
Mortgaging the Earth, The World Bank, Environmental Impoverishment and the Crisis of Development Bruce Rich, Beacon Books (USA), Earthscan (UK), 1994, ISBN 1 85383 221 9
Masters of Illusion, The World Bank and the Poverty of Nations, Catherine Caufield, Henry Holt and Co (USA), Macmillan (UK), 1997, ISBN 0 333 66262 8
Peace Without Profit: How the IMF Blocks Rebuilding in Mozambique, Joe Hanlon, James Curry, London and New York, 1996, ISBN 0 85255 800 7
Silent Revolution: The Rise of Market Economics in Latin America, Duncan Green, Cassell/Latin America Bureau, London, 1995.

http://www.brettonwoodsproject.org/faq.html