What Is the World Bank and What Does the World Bank Do?

The World Bank is an international organization that offers financial assistance to developing countries to pursue development projects. It consists of five organizations. The two central institutions are the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA). The other three institutions are the International Finance Corporation (IFC), the Multilateral Investment Guarantee Agency (MIGA), and the International Centre for Settlement of Investment Disputes (ICSID).

The World Bank Group is the largest development bank in the world and an observer at the United Nations Sustainable Development Group. The World Bank includes 189 member countries in the IBRD and 174 in the IDA. The bank offers loans and grants to some of the world’s poorest countries, along with middle-income ones to provide low-interest loans, macroeconomic advisory services, and technical assistance to combat extreme poverty, sustain economic development, and lead to shared prosperity on a global scale.

Delegates from forty-four nations established the World Bank and the International Monetary Fund (IMF) in 1944 at the Bretton Woods Conference in New Hampshire. This international conference aimed to resolve the world’s damaged financial state following the destruction of World War II. The World Bank's goal was to fund solutions for development challenges, and it gave its first loan to France in 1947.

Into the 1970s, the World Bank offered loans and policy advice to developing and low-income countries in areas such as Africa and Latin America. Over the past decades, the World Bank has expanded its definition of economic sustainabilty, funding groups that combat climate change, improve health care through vaccines, and work toward poverty reduction.

The World Bank, headquartered in Washington, DC, offers funding, advice, and research to advance the economies of nations in need. This funding goes to both the private and public sectors. These are often developmental projects that improve a country's infrastructure and labor market. The World Bank shares research and financial information via its Open Data Initiative. Leaders founded the bank to reconstruct nations’ economies following World War II, but its presidents and executive directors have more recently focused on social welfare and environmental concerns.

A recent example is the Human Capital Project, which started in 2017. This program helps countries invest in and develop their citizens to become productive laborers and active economic contributors. The World Bank’s Clean Air Initiative is an extension of its environmental work, which looks to fund programs that improve the air quality in cities through innovation and new technology.

The World Bank president, management, senior staff, and vice presidents of the organization’s various programs lead the bank’s operations. Additionally, the World Bank employs a chief economist and a board of directors. Five nations—the US, UK, Germany, Japan, and China—hold the most voting power, and annual meetings occur in various countries.

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