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World Bank & International Monetary Fund - Coggle Diagram
World Bank & International Monetary Fund
global economic governance
goal
historically: deal with economic consequences of war in Europe, create economic stability to ensure peace
since do-colonization: addressing the socio-economic disparities between North and South to stabilize the global economic order
current trends
informal governance: G7(G8), G20 since the 1970s
Changing role of the US as a promoter of GEG
Emerging powers (BRICS, especially China): regional development banks
instiutions
International Monetary Fund
World Trade Organization (GATT)
World Bank
UN conference on Trade and Development (UNCTAD): voice of the global south
The Bretton Woods Conference (1944)
44 participating states (US and UK dominated)
objectives
reconstruct war-torn Europe
Prevent or mitigate an economic crisis like 1930s
economic liberalism: free market to preserve economic and financial stability
institutions
World Bank
International Monetary Fund
The World Bank
.
Established as International Bank for Reconstruction and Development (IRBD)
membership
189 member states
group of 5 institutions
International Development Association (1962)
gives credit to 80 lowest-income countries (below GDP $1.1 per capita)
no interest and long term (30-50 years)
74 participating states
focus on development
International Finance Corporation (1956)
supporting companies in developing countries
promote private sector for economic development
184 participating states
International Bank for Reconstruction and Development
activities
Conditions for WB credit: good governance, economic reforms, etc.
areas of investment
infrastructure
agriculture
governance
education
healthcare
public sector reforms
Credits to finance non-private sector economic activities (Main clients: mid-income countries and credit-worthy low-income countries, against interest)
other activities
research on development issues
economic advice to governments
structure
WB (Group) President: always and American
Independent Evaluation Group and Inspection Panel: complaint mechanism, internal evaluations, providing NGOs possibility to complain against WB program
Board of Directors: executive organ, meets twice a week, 25 executive directors, chaired by president WB, responsible for all general operations
Secretariat: staff, no mandate on distribution, all based in Washington DC
Board of Governors: plenary organ, annual meetings, admission and suspension of members, decides to increase/decrease authorized capital in stock, determines distribution net income of the bank, each country 2 representatives for 5 years
Multilateral Investment Guarantee Agency (1988)
Insurances against non-commercial/political risks for private investors (e.g. civil war, expropriation)
promote economic (foreign) investments in developing countries
156 participating states
International Centre for Settlement of Investment Disputes (1966)
mediation and arbitration of investment conflicts between member states and private investors from other countries
cases discussed on voluntary basis, both parties must agree
161 participating states
decisions of the ICSID are binding
objectives
poverty reduction
economic development
Activities
After 1960s: focus on developing countries (International Development Association (IDA))
After 1990: facilitate economic transition in Eastern Europe; post-conflict reconstruction (e.g. in former Yugoslavia, Afghanistan, Iraq)
Origins (IRBD): rebuilding Europe and Asia (post-war reconstruction: Marshall Plan); main clients: European states
As of 2000: contribute to achieving the Millennium Development Goals (2000-2015) and the Sustainable Development Goals (2015-)
International Monetary Fund
objectives
International financial cooperation: ensuring international liquidity for investments
Monetary stability: adjusting to balance of payments difficulties
activities
technical assistance
monitoring (research on financial state MSs)
large-scale credit to states in financial insecurity ("bailout")
General research: World Economic Outlook and Global Financial Stability Report
structure
Director IMF is always a European
Does not have an Inspection Panel but independent evaluation office plays a significant role
Decision-making Boards of Directors IMF & WB
voting power (majority or super majority decisions) is based on shares held by the MS
US holds de facto veto power in both boards
predominantly by consensus
Criticisms IMF & WB
WB/IMF as neoliberal institutions implementing the 'Washington Consensus'
privatization
deregulation etc.
liberalization of trade
Fiscal discipline (deficit below 2% of GDP)
organizational culture/lack of accountability
regional development banks
origins
dissatisfaction with WB lending among developing countries
scarcity of funding for regional programs
banks
1959 Inter-American Development Bank
US 1/3 of voting power
China joined in 2009
46 members
1966 Asian Development Bank
Japan and US largest shareholders
funding of NGO projects
19 non-regional members
48 regional members
1966 African Development Bank
2015 Asian Infrastructure Investment Bank
basic information
57 states
seated in Beijing
all European states except Ireland and Belgium
allows non-sovereign members
origins
economic competiton between China and US
China's dissatisfaction with WB structure (favoring US)
Reducing bilateral tensions in the region
purpose
Promote the 'Silk Road economic belt'
Infrastructure Investments in Asia: overcome transport and connectivity barriers for export
debate and criticism
Lack of accountability
Safeguards and social and economic standards -> Complaint Handling Mechanism
China's dominance (largest shareholder) -> instrument for foreign policy influence (as US in WB and Japan in ADB)