Part 1-II Section Outline

The Functions of the IMF & the World Bank

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1. The Rough Road to Bretton Woods: Looking for Stability and Growth
   1. The Gold-Standard System was Supposed to Operate Automatically and Maintain Economic Stability, but it Failed to Do So.
   2. During the Inter-War Period, Countries Pursued Policies that Led to International Economic Chaos and War.
2. Preoccupation With Avoiding Repetition of the Inter-War Problems Led to the Creation of the IMF and the World Bank
3. Given the Challenges of Fashioning Institutions to Address the Inter-War Problems, the Founders of the BWIs Did Not Address "Development" As We Know It Today
   1. The Negotiations Over the Creation of the IMF Focused on Technical Issues Relating to International Monetary Affairs.
   2. The World Bank Preparatory Work and Negotiations at the Conference Reflected Only a Peripheral Concern for "Development."
4. The IMF's Functions
   1. The IMF Charter Originally Established Adjustable Par Values for the Currencies of Member Countries.
   2. The IMF's "Lending" Facilities Help Member Countries Make Adjustments to Restore Balance of Payments Equilibrium.
   3. Today the IMF Engages in Surveillance Over the Exchange Rates of Member Countries.
   4. The IMF has Encouraged Members to Make Their Domestic Currencies "Convertible"--i.e, Freely Exchangeable for Foreign Currencies.
   5. The Fund has Several Ways of Assuring Compliance With its Rules and Policies.
   6. The IMF Provides Countries with Assistance Regarding Technical Issues.
   7. Structure of the IMF
5. The Functions and Structure of the World Bank Group
   
   1. Although the IMF and the IBRD Seem Like Very Similar Institutions, Formally They Differ in Fundamental Ways.
      1. Both are multilateral institutions whose charters call for weighted voting; both also focus on economic matters in member countries.
      2. The IBRD, however, is an investment bank that intermediates between investors, who buy the Bank's bonds, and developing countries, which borrow from the Bank.
   2. The IBRD's Lending Stresses Market-Based Economic Development and Poverty Reduction.
      1. The IBRD initially focused on project lending concentrating on investment in physical capital in developing countries.
      2. In the 1960s and 1970s the IBRD began to focus on investing in human capital.
      3. The debt crisis of the 1980s prompted the IBRD to make market-based adjustment loans.
   3. In the 1990s the Bank Tried to Improve its Responsiveness While Stressing Poverty Alleviation and Corruption Reduction.
   4. The IFC, MIGA and ICSID Help Mobilize the Private Sector.
   5. Structure of the IBRD and other World Bank Group Organizations.

[Part One Bibliography]

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