The World Bank began by rebuilding postwar Europe and drifted into global development
Its first loan went to France in 1947, for half of what Paris asked and on strict terms. From that cautious start, the institution born at Bretton Woods became the world's largest development lender, praised for fighting poverty and attacked for the austerity it demanded in return.
Delegates at the Bretton Woods Conference in July 1944 created the World Bank alongside the International Monetary Fund, with the United States and United Kingdom dominating the talks. Treasury secretary Henry Morgenthau Jr. wanted both bodies in New York, but his successor Fred M. Vinson put them in Washington, D.C., worried that a Wall Street address would taint them with the whiff of international finance. By tradition the bank's president is an American.
Early progress was slow: money was short and the president clashed with the US executive director. John McCloy picked France over Poland and Chile for the debut loan of US$250 million, conditional on a balanced budget and on repaying the bank before other governments. Once the Marshall Plan began channelling aid to Europe in 1947, the bank turned to allies elsewhere, and until 1968 its lending went mostly to infrastructure.
Robert McNamara, appointed in 1968 by Lyndon B. Johnson, changed the scale. From 1974 to 1980 lending shifted toward basic needs and social services, with treasurer Eugene Rotberg tapping the global bond market for capital, though developing-country debt climbed fast. Under Alden W. Clausen in the 1980s the emphasis moved to debt servicing and structural adjustment, and UNICEF reported that these programmes had worsened health, nutrition and schooling for tens of millions of children.
Today the group is a family of five bodies, from the original International Bank for Reconstruction and Development to the Multilateral Investment Guarantee Agency added in 1988. The IBRD counts 189 members. A 2010 voting reform raised the voice of developing economies, especially China, yet the United States still holds the largest share.
Source: World Bank Group
