World Bank

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WORLD BANK

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World Bank

Introduction

Since the advent of time, human beings have been having a very hard time surviving. This is

mainly because their lives are encompassed with immense challenges that tend to weigh them down.

Notably, these factors that affect their lives are dependent on two major factors; cooperation with

others and work (WEINTRAUB 2016). However, there are very high chances that human beings

who are self-centered, also have a great tendency to remain unfaithful in their places of work. The

latter threatens the society's existence. This is because the community's survival is overly dependent

on the economic basis on which it stands and when the financial foundation is weak and by any

chance tampered with, the then chances are that the society will be unstable as a result (WORLD

BANK & WORLD BANK GROUP 2016). There should be a means to ensure that the economic

foundation of the society is maintained at a point that is fair enough and encouraging in the same

instant. This is the main reason behind the setting up of the World Bank.

Formation and Foundation

In the course of time, some countries were proving to be developing at a rapid rate in

comparison to others. Currently, there is a stratification of the countries in all the continents of the

world about their economic base (WORLD BANK 2016). While some countries are stable enough

to support the needs of the country without help, others are languishing in poverty to the point that

they cannot provide food for their populations. They are known by the titles developed and

developing nations respectively (WEINTRAUB 2016). Conversely, the developing countries that

depend on the assistance of those that are stable seem to be having very high populations. The

reason behind this fact is yet to be brought into the limelight, but research is still underway to prove

the reason behind it. It is typically anticipated that a person who is financially stable has the upper

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hand in having fun in life and having a big family regarding children but the societies are proving

the contrary to be true.

Since most of the countries were finding it hard to establish their economic bases by

themselves, the World Bank was put in place. It was drawn up and formed a branch of the United

Nations (KNIGHT 2003). It was meant to ensure that the countries that were still behind in terms of

development got to their feet and rose to the same level as those that have established their

economic balance. However, after putting the body in place, the problem was how to help the lower

countries to be economically stable (WEINTRAUB 2016). The United Nations Secretariat and other

leaders of the member countries convened a meeting to discuss the way forward (WORLD BANK

& WORLD BANK GROUP 2016). The body came to the decision that the countries were to be

given financial assistance in terms of loans that they would use to fund their development plans.

After this decision, the other issue was the way to making sure that the money was not

misappropriated by these same countries. Money is the route of all evil meaning that it could drive

the leaders of these countries to take part in what they did not intend.

The body came up with a plan that would ensure every amount that is provided in remittance

in terms of loans to other countries was accounted for by these countries (WILLIAMS,

FERDINAND & PASIAN 2015). This was a way to making sure that the money was only used for

the purpose for which t was sought and no other background deals on how to spend the money. The

task that the World Bank has as a major branch of the United Nations is not easy at all as it has to

make a follow up of the money it has lent to member countries of the United Nations (WORLD

BANK 2016). The World Bank cannot, however, operate all the countries efficiently and ensure that

the money theses countries are in need of reaches them promptly and that is the reason the

organization has subsidiaries that help it in the execution of the tasks that are mandated to it

(WEINTRAUB 2016). The subsidiaries include International Finance Corporation (IFC),

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International Bank for Reconstruction and Development (IBRD), International Development

Association (IDA), International Centre for Settlement of Investment Disputes (ICSID) and the

Multilateral Investment Guarantee Agency (MIGA) (WORLD BANK & WORLD BANK GROUP

2016).

Theoretical Concepts

Some theories are underlying the formation of the World Bank. The theoretical frameworks

are points from which the duties of the World Bank were derived. The theories not only explain the

natural ways of transferring resources from developed to developing countries in a nutshell but also

the means to ensuring that the money is well accounted for in the activities of which they were

borrowed (KAT et al. 2016).

Keynesian Economic Theory

The theory was brought forth by John Maynard Keynes. He was an English economist. His

theory was mainly in general employment, money and the interest accrues (DE VROEY 2016). He

felt that it would be wise for the government to institute manipulation plans for the economy and in

so doing, reverse the periodic downtowns that were taking charge of the markets (DE VROEY

2016). Luckily, he developed his theory during the great economic depression and further argued

that the cause of the depression was due to lack of consumer demand for certain goods and services

that were rendered in the market (KATES 2016). This, in turn, made businesses to lay off employees

and cut their production since there was already excess inventory. This theory led to the drawing up

of the Fiscal Policy.

Monetarism

Monetarism was established by economists who felt the Keynesian Theory did little to help

with the inflation and unemployment rates (KATES 2016). Monetarism was put in place to assist in

finding solutions to unemployment, inflation, and stagnation that were then perceived as great

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menace to almost all countries (ARASH 2016). Monetarism was only to function by establishing

control on the supply of money.

There have been natural calamities that have caused the victim countries a great deal of

financial loss. The catastrophes have led to the partial or total destruction of amenities that a very

vital for the daily operation of the country. The worst part that is characteristically equal to all

matters of crisis is that they happen when they are least expected to. This means that neither the

countries' leaders nor the occupants have the anticipations that disasters of such magnitude would hit

their countries (WILLIAMS, FERDINAND & PASIAN 2015). At this point, it may be argued that

countries have contingency funds that are meant to get the country out of such calamities but then

the magnitude of the destruction might be too great for the resources to handle. This calls for

another plan which most if not all countries hit with catastrophes have in place. This is the perfect

opportunity that the World Bank may come in place (2016). The state may borrow additional funds

to help them pick themselves from the point of fall to a better ground. In this instance, the World

Bank come in handy as it is the only body that can quickly help such countries get back to their feet.

Operations of the World Bank

Being an important part of the United Nations, the World Bank is mandated with several

duties that it is meant to undertake with the help of its employees. Since it is an international

monetary organization, the World Bank has duties that have financial relations. However, the body

is also mandated to carry out duties that are apparently out of the financial scope (AHMED et al.

2016). There have been natural calamities that have caused the victim countries a great deal of

financial loss (TOUSSAINT & DROPSY 2008). The catastrophes have led to the partial of total

destruction of amenities that a very vital for the daily operation of the country. The worst part that is

characteristically equal to all matters of crisis is that they happen when they are least expected to.

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This means that neither the countries' leaders nor the occupants have the anticipations that disasters

of such magnitude would hit their countries.

At this point, it may be argued that countries have contingency funds that are meant to get

the country out of such calamities but then the magnitude of the destruction might be too great for

the resources to handle. This calls for another plan which most if not all countries hit with

catastrophes have in place. This is the perfect opportunity that the World Bank may come in place

(FINE 2010). The state may borrow additional funds to help them pick themselves from the point of

fall to a better ground. In this instance, the World Bank come in handy as it is the only body that can

quickly help such countries get back to their feet.

To undertake its role in the best manner, the World Bank needs a source of funds that it

continuous to ensure its survival. In each organization, there are bills and expenses to be met. They

can only be completed in a suitable manner if the team is in the position to pay the bills and

expenses (TOUSSAINT & DROPSY 2008). To ensure the World Bank had reliable financial

sources, the member countries of the United Nations were to submit funds on a continuous basis as a

means of confirming loyalty and membership. Since the United Nations is a huge organization that

covers the whole universe, it provides an excellent source of funding for the World Bank (KATES

2016). This way, the World Bank was in a better position to meet its daily financial needs and

obligations and also support the countries when they were in need of monetary aid.

Helping in Economic Advancement

There are situations in which most countries may not in the position to support the financial

needs of its people. The World Bank may chip in to help such countries. The support it offers may

be through financial aid. The money that the body uses to assist such countries is the same amount

that the states remit to the body. The amount that each country remits varies with its economic

development. This implies that the countries that are better off and for more developed offer a huge

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sum of money compared to the developing countries (KATES 2016). In the course of helping

countries that are hit by calamities from which they cannot rescue themselves, a significant part of

the money that is spent comes from the developed countries.

The developed countries make money they remit by carrying out their economic activities that give

them an advantage in paying the funds. When giving their part of the amount, it is like they are

giving a part of their resources to the developing nations. The help might not be necessarily in terms

of visible resources, but financial contributions that are later used in assisting the developing

countries are a better way to share economic development with other nations.

Offering Financial Advice

At some point, states may intend to make investment decisions, but then they may not know

how to go about it. Making a massive financial investment is very demanding since a lot of

consultations is important to ensure that the country does not make mistakes they may regret later on

in the course of their development plans (BOWN et al. 2016). The World Bank as an organization

that owes its establishment on a commercial basis is practically used to handling huge sums of

money and may be the best shot in offering financial advice to countries that need it the most

(TOUSSAINT & DROPSY 2008). Since it is the same body that provides funding, it should also be

in a better position to advise the countries that seek financial aid to ensure they use the money for

development purposes and not any other purposes that may not be beneficial to the country.

Assisting in Financial Research

In cases where countries seek investment plans that may best suit them, research is critical in

arriving at decisions that may be satisfying to both the World Bank and the leaders of the countries.

The World Ban helps in such matters to provide the clear path for the states to make sound decisions

that may not be as a result of victimization or impairment of any sort.

Conclusion

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Conclusively, the World Bank has done a lot to assist developing nations in their moments of

financial need (WORLD BANK 2016). By using the same money the developed countries remit to

the World Bank through the United Nations to loan developing countries, it is serving as a perfect

tool for transferring resources to the developing nations (report 2015/201). Between the years 1973

and 1980, the World Bank helped African countries by plowing $ 2.4 billion that was used in

Agricultural advancement activities (WEINTRAUB 2016). This was a way of establishing

economic development in Africa that is composed of developing nations.

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References

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quality and efficiency: comparing business regulation for domestic firms in 189 economies:

a World Bank Group flagship report. Washington, DC, World Bank.

WORLD BANK. (2016). Live long and prosper: aging in East Asia and the Pacific.

http://search.ebscohost.com/login.aspx?direct=true&scope=site&db=nlebk&db=nlabk&AN=

948672.

WORLD BANK. (2016). Benchmarking public procurement 2016: assessing public procurement

systems in 77 economies. http://elibrary.worldbank.org/doi/book/10.1596/978-1-4648-0726-

report 2015/2016: development goals in an era of demographic change.

http://search.ebscohost.com/login.aspx?direct=true&scope=site&db=nlebk&db=nlabk&AN=

1099358.

WORLD BANK. (2016). International debt statistics.

http://search.ebscohost.com/login.aspx?direct=true&scope=site&db=nlebk&db=nlabk&AN=

1119824.

WORLD BANK. (2016). Knowledge-based country programs: an evaluation of World Bank group

experience.

WORLD BANK. (2016). Doing business 2017: equal opportunity for all: comparing business

regulation for domestic firms in 190 economies.

WILLIAMS, N. L., FERDINAND, N., & PASIAN, B. (2015). Online Stakeholder Interactions in

the Early Stage of a Megaproject. Project Management Journal. 46, 92-110.

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WORLD BANK. (2014). The big business of small enterprises: evaluation of the World Bank

Group experience with targeted support to small and medium-size businesses, 2006-12.

http://public.eblib.com/choice/publicfullrecord.aspx?p=1953213.

TOUSSAINT, E., & DROPSY, S. (2008). The World Bank: a critical primer. London, Pluto Press.

FINE, B. (2010). Theories of social capital: researchers behaving badly. London, Pluto Press.

http://public.eblib.com/choice/publicfullrecord.aspx?p=3386214.

KNIGHT, P. (2003). Conspiracy theories in American history: an encyclopedia. Santa Barbara,

Calif, ABC-CLIO. http://ebooks.abc-clio.com/?isbn=9781576078136.

(2016). World development report 2016: digital dividends. Washington, D.C., The World Bank.

http://public.eblib.com/choice/publicfullrecord.aspx?p=4397385.

AHMED, S. A., AHMED, S. A., CRUZ, M., QUILLIN, B., & SCHELLEKENS, P.

(2016). Demographic Change and Development: Looking at Challenges and Opportunities

through a New Typology. Washington, D.C., The World Bank.

http://elibrary.worldbank.org/doi/book/10.1596/1813-9450-7893.

BOWN, C. P., BOWN, C. P., & TOVAR, P. (2016). Preferential Liberalization, Antidumping, and

Safeguards: Stumbling Block Evidence from Mercosur. Washington, D.C., The World Bank.

http://elibrary.worldbank.org/doi/book/10.1596/1813-9450-7865.

KAT, H., PAGE, J., & SHIMOMURA, Y. (2016). Japan's development assistance: foreign aid

and the post-2015 agenda.

KATES, S. (2016). What's wrong with Keynesian economic theory? Cheltenham (UK), Edward

Elgar.

DE VROEY, M. (2016). A history of macroeconomics from Keynes to Lucas and beyond. New York

(N.Y.), Cambridge University Press.

ARASH MOLAVI VASSI. (2016). Monetarism.

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WEINTRAUB, S. (2016). Modern Economic Thought. https://doi.org/10.9783/9781512808650.

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