International Bank for Reconstruction and Development

Definition

The International Bank for Reconstruction and Development (IBRD), commonly known as the World Bank, is a global financial institution that provides loans, grants, and advisory services to developing countries. It was established in 1944 as part of the Bretton Woods system to aid in the reconstruction and development of economies in the aftermath of World War II.

5 Must Know Facts For Your Next Test

1. The IBRD is one of the largest sources of development assistance, providing loans, grants, and advisory services to countries around the world.
2. The IBRD is owned and operated by its member countries, with voting power allocated based on the size of each country's economy.
3. The IBRD's primary focus is on reducing poverty and promoting sustainable development through investments in infrastructure, education, health, and other sectors.
4. The IBRD raises funds for its lending activities by issuing bonds in the international capital markets, which are backed by the capital and guarantees of its member countries.
5. The IBRD works closely with other members of the World Bank Group, such as the IDA, to provide a comprehensive range of development financing and advisory services.

Review Questions

• Explain the role of the International Bank for Reconstruction and Development (IBRD) within the Bretton Woods system.
  • The IBRD, or World Bank, was established as part of the Bretton Woods system in 1944 to provide financing and support for the reconstruction and development of economies in the aftermath of World War II. As a key institution within the Bretton Woods framework, the IBRD was designed to work alongside the International Monetary Fund (IMF) to promote global financial stability and economic growth through the provision of loans, grants, and advisory services to developing countries.
• Describe the organizational structure and funding model of the IBRD.
  • The IBRD is owned and operated by its member countries, with voting power allocated based on the size of each country's economy. The IBRD raises funds for its lending activities by issuing bonds in the international capital markets, which are backed by the capital and guarantees of its member countries. This funding model allows the IBRD to leverage its resources and provide a wider range of development financing and advisory services to its client countries.
• Analyze the IBRD's (World Bank's) impact on global development and poverty reduction efforts.
  • The IBRD, as part of the World Bank Group, has played a significant role in global development and poverty reduction efforts. Through its investments in infrastructure, education, health, and other critical sectors, the IBRD has helped to spur economic growth and improve living standards in developing countries around the world. The IBRD's focus on sustainable development and its collaboration with other international organizations, such as the IMF, have been instrumental in advancing the global development agenda and working towards the eradication of extreme poverty.

Related terms

Bretton Woods System: The Bretton Woods system was an international monetary framework established in 1944 that fixed exchange rates to the U.S. dollar, which was convertible to gold. It also led to the creation of the International Monetary Fund (IMF) and the IBRD (World Bank).

World Bank Group: The World Bank Group is a family of five international organizations that provide financing, advice, and research to developing countries. It includes the IBRD, the International Development Association (IDA), the International Finance Corporation (IFC), the Multilateral Investment Guarantee Agency (MIGA), and the International Centre for Settlement of Investment Disputes (ICSID).

Development Assistance: Development assistance refers to the financial and technical aid provided by governments, multilateral institutions, and other organizations to support economic and social development in low- and middle-income countries.