World Bank

Definition

The World Bank is an international financial institution that provides loans, grants, and other forms of assistance to developing countries for the purpose of economic development and poverty reduction. It is a key player in the global economy and has a significant impact on global stratification, wealth, and poverty.

5 Must Know Facts For Your Next Test

1. The World Bank was established in 1944 at the Bretton Woods Conference and is headquartered in Washington, D.C.
2. The World Bank's primary goals are to reduce poverty, promote economic growth, and improve living standards in developing countries.
3. The World Bank provides low-interest loans, interest-free credits, and grants to developing countries for a wide range of development projects and reforms.
4. The World Bank is a major player in global stratification, as its policies and lending practices have been criticized for perpetuating inequality between the Global North and Global South.
5. The World Bank's Structural Adjustment Programs have been controversial, as they often require developing countries to implement austerity measures and privatize public services in exchange for loans.

Review Questions

• Explain how the World Bank's lending practices and policies relate to global stratification and inequality.
  • The World Bank's lending practices and policies have been criticized for perpetuating global stratification and inequality. The bank's Structural Adjustment Programs often require developing countries to implement austerity measures and privatize public services in exchange for loans, which can lead to the disproportionate concentration of wealth and resources in the hands of the Global North. Additionally, the World Bank's focus on economic growth over equitable development has been seen as contributing to the widening gap between the wealthy and the poor on a global scale.
• Describe the World Bank's role in global wealth and poverty, and how it relates to theoretical perspectives on global stratification.
  • The World Bank plays a significant role in shaping global wealth and poverty through its lending practices and development policies. From a functionalist perspective, the World Bank aims to promote economic growth and reduce poverty in developing countries. However, from a conflict theory standpoint, the bank's policies have been criticized for perpetuating the unequal distribution of resources and power between the Global North and Global South. Dependency theory also suggests that the World Bank's lending practices and structural adjustment programs have reinforced the dependence of developing countries on the economic and political interests of the Global North, further entrenching global stratification.
• Analyze how the World Bank's classification of countries into the Global North and Global South relates to its role in global stratification and development.
  • The World Bank's classification of countries into the Global North and Global South is a key aspect of its approach to global stratification and development. This dichotomy reflects the bank's underlying assumption that there is a fundamental divide between wealthy, industrialized nations and poorer, developing nations. This classification system shapes the World Bank's lending practices, policy recommendations, and development strategies, which have been criticized for perpetuating this divide and reinforcing the unequal power dynamics between the Global North and Global South. From a critical theory perspective, the World Bank's role in maintaining and legitimizing this global hierarchy is seen as a means of preserving the economic and political interests of the dominant powers in the international system.

Related terms

International Monetary Fund (IMF): The IMF is an international organization that works alongside the World Bank to promote global monetary cooperation, financial stability, and economic growth.

Structural Adjustment Programs (SAPs): SAPs are economic policy reforms required by the World Bank and IMF as a condition for receiving loans, often involving austerity measures and privatization.

Global North and Global South:

The terms used to describe the division between wealthy, industrialized nations (Global North) and poorer, developing nations (Global South), which is a key focus of the World Bank's work.