The International Monetary Fund (IMF)

The main difference between the
International Monetary Fund (IMF) and the World Bank lies in their

respective purposes and functions. The IMF oversees the stability of the world's monetary system, while
the World Bank’s goal is to reduce poverty by offering assistance to middle-income and low-income
countries.
Both organizations are based in Washington, D.C., and were established as part of the Bretton Woods
Agreement in 1945. The Bretton Woods Agreement was a monetary and exchange rate management
system that attempted to encourage international financial cooperation through the introduction of a
system of convertible currencies at fixed exchange rates, with the dollar trading for gold at $35 per ounce
The International Monetary Fund (IMF)

Comprised of 189 member countries including the United States, the International Monetary Fund has a
primary mission to ensure monetary stability around the world. 2 Member countries work together to
foster global monetary cooperation, secure financial stability, facilitate international trade, and promote
employment and economic growth. It also aims to reduce poverty around the world.
The IMF maintains its mission in three ways. First, it keeps track of the global economy and those of its
member countries. The group employs a number of economists who monitor member countries' economic
health. Each year, the IMF provides each country with an economic assessment.
Secondly, it gives practical assistance to members by providing policymakers to help plan fiscal policies,
coming up with tax and fiscal legislation, along with overseeing the economy through analysis. Finally,
the IMF lends money to countries with balance of payments difficulties. It provides this financial
assistance as long as the borrowing country implements initiatives suggested by the IMF.
The group's loan program doesn't come without criticism, however. Some countries cannot obtain
traditional financing sufficient to meet their international obligations. By providing loans, the IMF helps
countries develop policy programs that solve the balance of payments problem.
But these loans are loaded with conditions. A loan provided by the IMF as a form of rescue for countries
in serious debt ultimately only stabilizes international trade and eventually results in the country repaying
the loan at rather hefty interest rates.
The World Bank:
The World Bank's purpose is to aid long-term economic development and reduce poverty in economically
developing nations. It accomplishes this by making technical and financial support available. The bank
initially focused on rebuilding infrastructure in Western Europe following World War II and then turned
its operational focus to underdeveloped countries. 4
World Bank support helps countries reform inefficient economic sectors and implement specific projects,
such as building health centers and schools or making clean water and electricity more widely available.
World Bank Organizational Structure

The World Bank president comes from the United States—the group's largest shareholder. Members are
represented by a board of governors. Powers are delegated throughout the year to a board of 25 executive
directors.6
The World Bank consists of five different organizations that all aim to meet the group's mission.
 The International Bank for Reconstruction and Development (IBRD) lends to middle-income and

creditworthy low-income governments. There are 189 members of this branch of the World Bank.
 The International Development Association (IDA) offers interest-free loans and grants to the
world's poorest countries.
 The International Finance Corporation (IFC) finances investment, capital mobilization, and gives
advisory services to businesses and governments in economically developing nations.
 The Multilateral Investment Guarantee Agency (MIGA) promotes foreign direct investment in
economically developing nations.
 The International Center for Settlement of Investment Disputes (ICSID) provides investment
dispute conciliation and arbitration.
World Bank assistance is typically long-term, funded by countries—mainly the world's richest that are
members of the bank—through the issuing of bonds. The bank’s loans are not used as a type of bailout, as
is the case with the IMF, but as a fund for projects that help develop an underdeveloped or emerging
market nation and make it more productive economically.

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The International Monetary Fund (IMF)

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The main difference between the

International Monetary Fund (IMF) and the World Bank lies in their

The International Monetary Fund (IMF)

World Bank Organizational Structure

 The International Bank for Reconstruction and Development (IBRD) lends to middle-income and

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