The World Bank and the International Monetary Fund, Interchangeable But Different

The World Bank and the International Monetary Fund are two organizations that are used interchangeably, but are function very differently from one another. Both the World Bank and the International Monetary Fund were created during the post-World War II era to help stabilize the international economy. The IMF focuses mainly on international affairs and finance of the whole world, where the World Bank directs its attention toward developing countries. The United States and The People’s Republic of China are two of major members of both the IMF and the World Bank, which contribute their efforts on expanding and solidifying the economies of the other member nations.

The World Bank is best described as a multilateral organization, meaning that it is owned and contributed to by many nations and governments. The World Bank is an internationally supported bank that provides financial and technical assistance to developing countries for infrastructure programs such as building bridges, roads, hospitals and schools, with its main goal of reducing poverty and improving the way the government of a developing country is run. The World Bank receives its funds by borrowing from capital markets and passing the resources on as loans, adding its operational costs to the cost of the loan because it is a non-profit organization. The United States, most countries in Europe and Japan, for example, are not developing countries, therefore they do not borrow from the World Bank, but they are the countries that provide the capital. Along with the providing the funds needed for the development programs, the World Bank also provides the countries with access to a team of design experts who help implement and plan the projects.

The highest authority of th...

... middle of paper ...

...s and lends money only when a country’s is spending exceeds more money than they are making. I believe that both the World Bank and the International Monetary Fund are very important organizations, it would be difficult to pick a “favorite” because they are both so different. However, I do lean a bit toward the World Bank side because of its achievements of helping developing countries build infrastructures. The IMF loan and bailout packages are hurting the international economy because they seem to be making the economic crises worse for one by trying to help another.

Both organizations, the World Bank and the International Monetary Fund were formed with two goals in mind – to help underdeveloped countries and to eliminate poverty from the world. Though they are different, they have been working together to achieve their goals by helping the international world.