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We know or at least usually hear in the media news about many international economic organizations, such as the International Monetary Fund or the European Central Bank. There are many of them, and although it seems that they all fulfill the same function, in reality it is not so, so it is convenient to know them a little more in depth. In this article we will explain how the World Bank works.
What is the World Bank
The World Bank is an international corporation of an economic nature formed by different institutions, born in 1945 in parallel to the International Monetary Fund, with the primary purpose of giving economic support to those countries that had been devastated after World War II and that needed financing for its reconstruction It is currently made up of more than 180 countries.
Over the years, and once the main members of that war, managed to achieve stability and development to continue growing on their own, the World Bank’s approach changed, focusing on the fight against poverty of all countries that are currently in development.
It is financed by the financial contribution made by all those member countries, from which the World Bank can make loans and finance the projects presented to it.
Institutions that make up the World Bank
The World Bank is made up of different institutions that act in a coordinated manner, while each of them is engaged in a specific activity in the search and promotion of development. The institutions are as follows:
- International Bank for Reconstruction and Development: it is the original institution, whose main vocation today is the financing and development of programs for poverty reduction. It is essential to belong to this body if you want to belong to the World Bank.
- International Development Association: is responsible for receiving membership fees and distribute them in the form of grants.
- International Finance Corporation: its mission is to boost economic development from the private sphere of economies, granting loans to business projects.
- International Center for Settlement of Investment Disputes: itaims to resolve and intervene in those conflicts arising from foreign investments.
- Multilateral Investment Guarantee Agency:tries to encourage investments in developing economies, protecting investments from the problems that these countries are not yet fully developed.