Since 1944, the World Bank and the IMF (known as Bretton Woods Institutions for the location in New Hampshire of their founding conference) have been major players in the global economy. Established as a source of international development financing, the World Bank has 176 member countries, all of which must first be admitted to the IMF. The IMF was created to oversee the exchange of currencies between countries, but quickly began to monitor the balance of payments situation of member countries and related internal economic policies. Since a country’s voting power in the Bank is proportional to its financial contribution, both institutions are controlled by the wealthiest countries.
In 50 years of doing business, the Bretton Woods Institutions have “reinvented” themselves more than once. The World Bank especially has adjusted to the changing global reality. Its mission has evolved from one of rebuilding Europe and Japan following World War II to one of supporting large-scale engineering projects in so-called “developing” countries; from an emphasis on nutrition, population and poverty in the 1970s to an emphasis on “adjusting” the economic policies of poor countries like Nicaragua and the Philippines in the 1980s and 1990s.
Now individuals and organizations around the world are demanding that the World Bank and IMF “reinvent” themselves once again. Critics point to failures in terms of process, including transparency and participation; policy, especially the “one size fits all” macroeconomic policy advice the institutions give to impoverished countries; and programs.