The Benefits and Disadvantages of the Imf and the World Bank

The Benefits and Disadvantages of the IMF and the World Bank

International Economic Course


Short Paper Assignment 1 Week 2

This essay discusses the benefits and disadvantages of the International Monetary Funds and the World Bank - the Bretton Woods Institutions. The first part of the discussion will be a short history of these institutions and will also try to explain why they were formed. This will be followed by the benefits of the institutions to the member states and   the disadvantages of their policies and operations before concluding the discussion.   The International Monetary Fund (IMF) and the World were formed shortly before the end of the World War II in 1944 at the Bretton Woods conference. The IMF was formed to promote international economic cooperation and provide its members with short term loans to enable trade with other counties. This role has somewhat evolved over the years and now   includes   among others   promotion of international monetary cooperation,   facilitation of the expansion   and   balanced   growth of international trade and promotion of the   exchange rate stability   (IMF,2014). The World Bank on the other hand originally focused on providing aid to reconstruct the European economies as well as “guaranteeing loans made by private banks for projects in poorer developing counties” (Rich 1994). The focus shifted over the years and now its central mandate is to reduce poverty and improve living standards by promoting sustainable growth and investment in people specifically in developing countries (Broughton and Lateef 1995).
In the years immediately following the World War 2, up to the early years of 1970,   there was evidence of significant growth to the world economy. A number of commentators attributed the growth to the IMF and World Bank (Lamb 2007) .   They believe that funding from the World Bank contributed significantly to the   rebuilding of Post-World War Europe.  
The macro economic framework of member...