Economic Development and the World Bank


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  • Traditionally, the Bank President has always been a US citizen nominated by the United States, the largest shareholder in the bank.
  • Economic Development and the World Bank

    1. 1. Economic Development and the World Bank International Economic Relations Metropolitan University Prague Martin Kolmhofer 2011/2012
    2. 2. FACTS <ul><li>Formation: 27 December 1945 (following ratification of Bretton Woods agreement) </li></ul><ul><li>187 members </li></ul><ul><li>Headquarter: Washington D.C. </li></ul><ul><li>10,000 employees in more than 100 offices worldwide </li></ul>
    3. 3. The World Bank Group consists of 5 Agencies <ul><li>International Bank for Reconstruction and Development (IBRD) </li></ul><ul><li>International Development Association (IDA) </li></ul><ul><li>International Finance Corporation (IFC) </li></ul><ul><li>Multilateral Investment Guarantee Agency (MIGA)  </li></ul><ul><li>International Centre for the Settlement of Investment Disputes (ICSID) </li></ul><ul><li>The term &quot;World Bank&quot; generally refers to the IBRD and IDA, whereas the world Bank Group is used to refer to the institutions collectively. </li></ul>
    4. 4. Mission
    5. 5. The Three Main Institutions <ul><li>Critique / Reputation Today: </li></ul><ul><ul><ul><li>IMF: Has imposed misguided policies </li></ul></ul></ul><ul><ul><ul><li>World Bank: Wastes resources on corrupt elites </li></ul></ul></ul><ul><ul><ul><li>WTO: Dominated by rich countries, corporations </li></ul></ul></ul><ul><ul><ul><li>Critique: </li></ul></ul></ul>Lecture 2: Institutions
    6. 6. The World Bank President Traditionally, the Bank President has always been a US citizen nominated by the (president of the) United States, the largest shareholder in the bank. Current President:  Robert B. Zoellick
    7. 7. The World Bank Chief Economists The  World Bank Chief Economist   provides intellectual leadership and direction to the Bank’s overall development strategy and economic research agenda. As a member of the Bank’s senior management team the person advises the President and Bank’s management on economic issues. Anne Osborn Krueger  — 1982–1986 Stanley Fischer  — 1988–1990 Lawrence Summers  — 1991–1993 Michael Bruno  — 1993–1996 Joseph E. Stiglitz  — 1997–2000 Nicholas Stern  — 2000–2003 François Bourguignon  — 2003–2007 Justin Yifu Lin  — June 2008–present
    8. 8. Regional and National Development Banks <ul><li>EIB (European Investment Bank) </li></ul><ul><li>IADB (Inter-American Development Bank) </li></ul><ul><li>ADB (Asian Development Bank) </li></ul><ul><li>AFESD (Arab Fund for Economic and Social Development) </li></ul><ul><li>EBRD (European Bank for Reconstruction and Development) </li></ul>
    9. 9. Measuring Economic Development
    10. 10. Weaknesses of GDP <ul><li>Definition GDP (Gross Domestic Product): The total market value of all final goods and services produced in a country in a given year </li></ul><ul><li>Price increases = Wealth increases? </li></ul><ul><li>Counts remedial and defensive expenditures as positive contributions to commerce. </li></ul><ul><li>Does not include non-market benefits </li></ul>
    11. 11. GNH &quot;Gross National Happiness&quot; The term &quot; gross national happiness &quot; was coined in 1972 by Bhutan's former King Jigme Singye Wangchuck, who has opened Bhutan to the age of modernization <ul><li>4 Pillars: </li></ul><ul><li>sustainable development </li></ul><ul><li>preservation and promotion of cultural values </li></ul><ul><li>conservation of the natural environment </li></ul><ul><li>establishment of good governance </li></ul>
    12. 12. The Happiest Place on Earth: Denmark
    13. 13. The Happiest Place on Earth: Denmark <ul><li>Relative equality between the citizens of Denmark </li></ul><ul><li>Prevalent high-quality government services such as mass transportation, free healthcare, subsidized child care, and a free educational system (all the way through college) - as a result people have to worry a lot less about financial issues. </li></ul><ul><li>A high amount of trust between the citizens and the government. </li></ul><ul><li>Relatively low expectations </li></ul>