World Bank — Definition Explained Simply | Examples & Role
World Bank is an international financial organization that provides developing countries with loans, grants, and advisory assistance to support economic growth and reduce poverty.
World Bank is an international financial institution established in 1944 at the Bretton Woods Conference together with the IMF. It is a specialized agency of the United Nations and includes more than 180 member countries. The headquarters of the World Bank is located in Washington, D.C., USA.
The main mission of the World Bank is to promote economic development and reduce poverty worldwide. Unlike the International Monetary Fund (IMF), which focuses on maintaining the stability of the global monetary system, the World Bank finances long-term projects in infrastructure, healthcare, education, environmental protection, and the social sector.
Structure of the World Bank
The World Bank is a group of organizations that includes:
- International Bank for Reconstruction and Development (IBRD).
- International Development Association (IDA).
- International Finance Corporation (IFC).
- Multilateral Investment Guarantee Agency (MIGA).
- International Centre for Settlement of Investment Disputes (ICSID).
Functions of the World Bank
- Providing long-term loans and grants to developing countries.
- Financing infrastructure projects (roads, energy, water supply).
- Supporting social programs (education, healthcare, poverty reduction).
- Promoting sustainable development and environmental protection.
- Advising countries on economic policies and reforms.
The World Bank and the global economy
The World Bank plays a key role in assisting developing countries. Its loans and grants aim to reduce poverty, improve living standards, and stimulate sustainable growth. Unlike the IMF, which focuses on short-term financial stabilization, the World Bank is engaged in long-term development.
Examples
- Financing the construction of schools and hospitals in Africa and Asia.
- Programs to combat climate change and support renewable energy sources.
- Grants for rebuilding countries after natural disasters.