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Economic Development and the World Bank


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Economic Development and the World Bank

  1. 1. Economic Development and the World Bank
  2. 2. FACTS • Formation: 27 December 1945 (following ratification of Bretton Woods agreement) • 188 members • Headquarter: Washington D.C. • 10,000 employees in more than 100 offices worldwide
  3. 3. The World Bank Group consists of 5 Agencies
  4. 4. Mission
  5. 5. CPI – Corruption Perception Index
  6. 6. Criticisms: The Three Main Institutions IMF: Has imposed misguided policies? WTO: Dominated by rich countries and corporations? World Bank: Wastes resources on corrupt elites?
  7. 7. 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: Jim Yong Kim - first Bank leader whose professional background is not in the political or financial sectors.
  8. 8. 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 — 2008–2012 Kaushik Basu (September 2012-)
  9. 9. Regional and National Development Banks • EIB (European Investment Bank) • IADB (Inter-American Development Bank) • ADB (Asian Development Bank) • AFESD (Arab Fund for Economic and Social Development) • EBRD (European Bank for Reconstruction and Development)
  10. 10. Measuring Economic Development
  11. 11. Measuring Economic Development Simon Kuznets, the winner of the 1971 Nobel Prize in economics, developed the basic concepts of national-income accounting during the 1920s and 1930s.
  12. 12. Weaknesses of GDP  Definition GDP (Gross Domestic Product): The total market value of all final goods and services produced in a country in a given year  Price increases = Wealth increases?  Counts remedial and defensive expenditures as positive contributions to commerce.  Does not include non-market benefits Does not include black-market activities
  13. 13. GNH "Gross National Happiness" The term "gross national happiness" was coined in 1972 by Bhutan's former King Jigme Singye Wangchuck, who has opened Bhutan to the age of modernization. 4 PILLARS: •sustainable development •establishment of good governance •conservation of the natural environment •preservation and promotion of cultural values
  14. 14. Scientific Theory of Happiness The PERMA Model Psychologist Martin  Seligman provided  the  acronym  PERMA  to  summarize  Positive  Psychology's  findings:  humans  seem  happiest  when  they  have: Pleasure, Positive Emotion (tasty food, warm baths, etc.), Engagement (or flow, the absorption of an enjoyed yet challenging activity), Relationships (social ties are a reliable indicator of happiness), Meaning (a perceived quest or belonging to something bigger), and Accomplishments (having realized tangible goals).
  15. 15. The Happiest Place on Earth: Denmark
  16. 16. The Happiest Place on Earth: Denmark • Relative equality between the citizens • High-quality government services such as mass transportation, healthcare, subsidized child care, and a free educational system (all the way through college). • A high amount of trust between the citizens and the government. • Relatively low expectations
  17. 17. Microfinance • The provision of financial services to low- income clients or solidarity lending groups including consumers and the self-employed, who traditionally lack access to banking and related services. • Not just credit but also savings, insurance, and fund transfers. • Muhammad Yunus: Grameen Bank 2006 Nobel Peace Price
  18. 18. The New Development Bank (NDB), formerly referred to as the BRICS Development Bank, is a multilateral development bank operated by the BRICS states (Brazil, Russia, India, China and South Africa) as an alternative to the existing US-dominated World Bank and International Monetary Fund. It will be headquartered in Shanghai, China. Unlike the World Bank, which assigns votes based on capital share, in the New Development Bank each participant country will be assigned one vote, and no countries will have veto power.
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