World Bank

The World Bank, officially the International Bank for Reconstruction and Development (IBRD), was one of [Page 2272]the three institutions that were conceived at the 1945 Bretton Woods, New Hampshire, conference. It was to initially aid in the reconstruction of war-torn Europe following World War II but ultimately finance development in lesser-developed countries. The World Bank has expanded since its conception to include both the IBRD and the International Development Association (IDA), and it is a part of the World Bank Group, which consists of the World Bank and three other agencies: International Finance Corporation (IFC), Multilateral Investment Guarantee Agency (MIGA), and International Centre for Settlement of Investment Disputes (ICSID). The World Bank Group's mission is to fight poverty and to improve the living standards of people in the developing world, with each agency specializing in different aspects of development.

The World Bank Group interacts with both the public and the private sectors. The World Bank deals directly with the governments of developing countries: the IBRD provides low-interest rate loans, policy advice, and technical assistance to low- and middleincome countries; the IDA provides grants and interestfree loans to the world's poorest countries. The other three agencies of the World Bank Group interact with the private sector by encouraging foreign private investment in developing countries. The IFC provides financing to private corporations in countries where capital is limited; the MIGA provides guarantees to foreign investors against losses due to noncommercial risks such as war and civil disturbance; and the ICSID provides a forum for conciliation and arbitration of international investment disputes between governments and private foreign investors.

The World Bank Group commands tremendous power and influence in both the public and private domains of development around the world. Not only is it the biggest and richest development finance institution in the world, its model for development is used and imitated by developing countries and nongovernmental agencies working on development projects; and hence, the economic, social, and environmental impact of development is heavily dependent on the policies that the World Bank Group promotes.