There have been tectonic shifts in the global economy since the founding of the World Bank in 1944 at Bretton Woods, yet the institution continues on the same open-handed and antiquated course.
For the first 30 years of its tenure, the Bank was the dominant source of international resources for emerging economies. Capital controls prevailed; financial markets were immature; foreign investment interest in developing countries was minimal. Now, the net $18 billion the Bank has provided to developing countries over the past seven years is dwarfed by the $1,450 billion contributed by the private sector.
It is widely promulgated that the World Bank devotes the greater part of its effort to countries denied access to market financing and to social projects that cannot command the interest of private lenders. In truth, the Bank centres its portfolio on the most credit-worthy candidates and demands a host government guarantee that renders capital markets indifferent to the ultimate use.
Today, the World Bank Group, which consists of five agencies, is principally engaged in the lending of money to emerging economies which it gathers in the financial markets by means of AAA ratings supported by industrialized member capital subscriptions.