World Economy and International Financial Institutions.
Importance of the International Financial Institutions (World Bank, IMF andWTO) in the whole story of development and aid, integrated world tradeand in the relationship between the First and Third Worlds cannot bedoubted. The International Monetary Fund and World Bank have had anextraordinary impact on the shape of the post-war world, and particularlyon the developing countries. In the Immediate post-war years, this pair of Institutions (Bretton Woods Institutions) was a new phenomenon on theworld scene. International Economic co-operation through multinationalset up for the purpose was new – it became significant for the first time inthe second half of the twentieth century.
The effectiveness of these twoinstitutions over the last 50 years is to be attributed partly to the fact,unlike the New York-based organisations of the United Nations and itsother specialised agencies, they were founded on financial realism
However, a long time has passed since the creation of the World Bank andIMF. The world has out of recognition over the past half century and thepurposes for which they were created are no longer fully relevant. If theseinstitutions are to go on serving the world well, they will have to adaptand change.When we look back, IMF was established in the background of GreatDepression of the 1930s and consequently severe decline in global tradeand international economic cooperation, and at the end of WWI, need for joint effort for post-war reconstruction. In July 1994 when 44 countrieswere got together at the Bretton Woods Conference, the Ideas were – byworking together to increase world economic welfare, nations would alsoincrease the chance of world political peace. Membership from 1950onwards, absorbing African nations 1960s after gaining independence hada significant effect on its growth. According to the structure of IMF, tobecome a member, a country must apply and then be accepted by amajority of the existing members, where Members are represented