1.

0 Supranational Institution
A supranational institution is an entity that is formed by two or more national governments
through international treaties. It is an international organization, or union, whereby member
states transcend national boundaries or interests to share in the decision-making and vote on
issues pertaining to the wider grouping. A supranational organization is a multinational union or
association in which member countries cede authority and sovereignty on at least some internal
matters to the group, whose decisions are binding on its members. In short, member states share
in decision making on matters that will affect each country's citizens. That is, the purpose of
creating a supranational institution frequently is to promote economic development or
cooperation for the member countries.
Examples of supranational institutions are; the International Bank for Reconstruction and
Development (World Bank), the European Investment Bank (EIB), International Labor
Organization, International Monetary Fund, The World Health Organization, World Trade
Organization, African Development Bank.

Brief Note on Selected Supranational Institution

i. International Monetary Fund (IMF)
The origin of the IMF goes back to the days of international chaos of the 1930s. During the
Second World War, plans for the construction of an international institution for the establishment
of monetary order were taken up.
At the Bretton Woods Conference held in July 1944, delegates from 44 non-communist countries
negotiated an agreement on the structure and operation of the international monetary system.
The Articles of Agreement of the IMF provided the basis of the international monetary system.
The IMF commenced financial operations on 1 March 1947, though it came into official
existence on 27 December 1945, when 29 countries signed its Articles of Agreement (its
charter). Today (May 2012), the IMF has near-global membership of 188 member countries.
Virtually, the entire world belongs to the IMF. India is one of the founder- members of the Fund.
The IMF, which started functioning in March 1947, is an autonomous organisation and is
affiliated to U.N.O. As per Fund Agreement, the headquarters of the IMF should be located in
that country which usually possess the highest quota of capital of the IMF. Accordingly, the head
office of IMF is located at Washington. At the initial stage, the IMF had 30 countries as its
members. Later, as on April 30, 1986, the total membership of the IMF rose to 149.

Objectives of IMF:
The main objectives of IMF, as noted in the Articles of Agreement, are as follows:
(i) International Monetary Co-Operation:
The most important objective of the Fund is to establish international monetary co-operation
amongst the various member countries through a permanent institution that provides the
machinery for consultation and collaborations in various international monetary problems and
issues.
(ii) Ensure Exchange Stability:
Another important objective of the Fund is to ensure stability in the foreign exchange rates by
maintaining orderly exchange arrangement among members and also to rule out unnecessary
competitive exchange depreciations.
(iii) Balanced Growth of Trade:

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IMF has also another important objective to promote international trade so as to achieve its
required expansion and balanced growth. This would ensure development of production
resources and thereby promote and maintain high levels of income and employment among all its
member countries.
(iv) Eliminate Exchange Control:
Another important objective of the Fund is to eliminate or relax exchange controls imposed by
almost each and every country before Second World War as a device to deliberately fix the
exchange rate at a particular level. Such elimination of exchange controls was made so as to give
encouragement to the flow of international trade.
(v) Multilateral Trade and Payments:
To establish a multilateral trade and payment system in respect to current transactions between
members in place of the old system of bilateral trade agreements was another important objective
of IMF.
(vi) Balanced Growth:
Another objective of IMF is to help the member countries, especially the backward countries, to
attain balanced economic growth by exchange the level of employment.
(vii) Correction of BOP Maladjustments:
IMF also helps the member countries in eliminating or reducing the disequilibrium or
maladjustments in balance of payments. Accordingly, it gives confidence to members by selling
or lending Fund’s foreign currency resources to the member nations.
(viii) Promote Investment of Capital:
Finally, the IMF also promotes the flow of capital from richer to poorer or backward countries so
as to help the backward countries to develop their own economic resources for attaining higher
standard of living for its people, in general.
Since inception, the management of the IMF is rested on two bodies:
(a) Board of Governors and
(b) Board of Executive Directors.
Every member country appoints one Governor for participating in the meetings of Board of
Governors and also appoints one Alternate Governor to represent the Governor is respect of its
absence. The Board of Governors in authorized to formulate the general policies of the Fund. To
carry on day to day activities of the IMF, the Board of Executive Directors in formed.

The World Bank Group (WBG)

The World Bank Group (WBG) was established in 1944 to rebuild post-World War II Europe
under the International Bank for Reconstruction and Development (IBRD). It is one of a variety
of organizations seeking to shape the world economy.
Today, the World Bank functions as an international organization that fights poverty by offering
developmental assistance to middle-income and low-income countries. By giving loans and
offering advice and training in both the private and public sectors, the World Bank aims to
eliminate poverty by helping people help themselves. Under the World Bank Group (WBG),
there are complementary institutions that aid in its goals to provide assistance.

There are 189 member countries that are shareholders in the IBRD, the primary arm of the
WBG. Jim Yong Kim is currently the president of the world bank. As noted, the
membership of the world bank is given to 189 countries under IBRD and 173 countries
under IDA. To become a member, however, a country must first join the International

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Monetary Fund (IMF). The size of the World Bank's shareholders, like that of the IMF's
shareholders, depends on the size of a country's economy. Thus, the cost of a subscription to the
World Bank is a factor of the quota paid to the IMF.

Functions of the World Bank

 It helps the war-devasted countries by granting them loans for reconstruction.
 Thus, they provide extensive experience and the financial resources of the bank help the
poor countries increase their economic growth, reducing poverty and a better standard of
living.
 Also, it helps the underdeveloped countries by granting development loans.
 So, it also provides loans to various governments for irrigation, agriculture, water supply,
health, education, etc.
 It promotes foreign investments to other organizations by guaranteeing the loans.
 Also, the world bank provides economic, monetary, and technical advice to the member
countries for any of their projects.
 Thus, it encourages the development of of-industries in underdeveloped countries by
introducing the various economic reforms.
Objectives of the World Bank
 This includes providing long term capital to its member nations for economic
development and reconstruction.
 Thus, it helps in inducing long term capital for improving the balance of payments and
thereby balancing international trade.
 Also, it helps by providing guarantees against loads granted to large and small units and
other projects for the member nations.
 So, it ensures that the development projects are implemented. Thus, it brings a sense of
transparency for a nation from war-time to a peaceful economy.
 Also, it promotes the capital investment for member nations by providing a guarantee for
capital investment and loans.
 So, if the capital investment is not available than it provides the guarantee and then IBRD
provides loans for promotional activities on specific conditions.
Purposes of the World Bank
 It wants to create an environment that is a pro-investment.
 Also, it wants to improve the omic stability by reducing poverty.
 So, it is working towards achieving sustainable growth.
 Increasing the opportunities for jobs and business in member nations which are
underdeveloped.
 Through investment, it plans to promote the socio-economic status of the society.
 Also, it wants to ensure that the judicial and legal systems are developed and individual
rights are protected.
 Strengthing the government of its member nations by promoting education.
 Combating corruption and to ensure that there are adequate training opportunities and
research facilities.
 It wants to provide loans with low-interest rates and interest-free credits.

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The Difference between the World Bank Group and the IMF
Founded at the Bretton Woods conference in 1944, the two institutions have complementary
missions. The World Bank Group works with developing countries to reduce poverty and
increase shared prosperity, while the International Monetary Fund serves to stabilize the
international monetary system and acts as a monitor of the world’s currencies. The World Bank
Group provides financing, policy advice, and technical assistance to governments, and also
focuses on strengthening the private sector in developing countries. The IMF keeps track of the
economy globally and in member countries, lends to countries with balance of payments
difficulties, and gives practical help to members. Countries must first join the IMF to be eligible
to join the World Bank Group; today, each institution has 189 member countries.

iii. World Trade Organization (WTO) and its objectives and functions
The Uruguay round of General Agreement on Tariffs and Trade (GATT) (1986-93) gave birth to
World Trade Organization. The members of GATT singed on an agreement of Uruguay round in
April 1994 in Morocco for establishing a new organization named WTO. The World Trade
Organization came into being in 1995. That is, it was officially constituted on January 1, 1995
which took the place of GATT as an effective formal, organization. GATT was an informal
organization which regulated world trade since 1948. The Director-General of the World Trade
Organization is Dr. Ngozi Okonjo-Iweala, elected since 1 March 2021.
Contrary to the temporary nature of GATT, WTO is a permanent organization which has been
established on the basis of an international treaty approved by participating countries. It achieved
the international status like IMF and IBRD, but it is not an agency of the United Nations
Organization (UNO). One of the youngest of the international organizations, the WTO is the
successor to the General Agreement on Tariffs and Trade (GATT) established in the wake of the
Second World War.
Structure:
The WTO has nearly 153 members accounting for over 97% of world trade. Around 30 others
are negotiating membership. Decisions are made by the entire membership. This is typically by
consensus.
A majority vote is also possible but it has never been used in the WTO and was extremely rare
under the WTO’s predecessor, GATT. The WTO’s agreements have been ratified in all
members’ parliaments.

The important objectives of WTO are:

1. To improve the standard of living of people in the member countries.
2. To ensure full employment and broad increase in effective demand.
3. To enlarge production and trade of goods.
4. To increase the trade of services.
5. To ensure optimum utilization of world resources.
6. To protect the environment.
7. To accept the concept of sustainable development.

Functions:
The main functions of WTO are discussed below:
1. To implement rules and provisions related to trade policy review mechanism.

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2. To provide a platform to member countries to decide future strategies related to trade and
tariff.
3. To provide facilities for implementation, administration and operation of multilateral and
bilateral agreements of the world trade.
4. To administer the rules and processes related to dispute settlement.
5. To ensure the optimum use of world resources.
6. To assist international organizations such as, IMF and IBRD for establishing coherence in
Universal Economic Policy determination.

The European Union

European Union (EU), international organization comprising 27 European countries and
governing common economic, social, and security policies. Originally confined to western
Europe, the EU undertook a robust expansion into central and eastern Europe in the early 21st
century. The EU’s members are Austria, Belgium, Bulgaria, Croatia, Cyprus, the Czech
Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia,
Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia,
Spain, and Sweden. The United Kingdom, which had been a founding member of the EU, left the
organization in 2020. The EU was created by the Maastrsicht Treaty, which entered into force
on November 1, 1993. The EU traces its origins to the European Coal and Steel Community
(ECSC) and the European Economic Community (EEC), established, respectively, by the 1951
Treaty of Paris and 1957 Treaty of Rome. The original member states of what came to be known
as the European Communities were the Inner Six: Belgium, France, Italy, Luxembourg, the
Netherlands, and West Germany. The communities and their successors have grown in size by
the accession of new member states and in power by the addition of policy areas to their remit.
The treaty was designed to enhance European political and economic integration by
creating a single currency (the euro), a unified foreign and security policy, and common
citizenship rights and by advancing cooperation in the areas of immigration, asylum, and judicial
affairs. The EU was awarded the Nobel Prize for Peace in 2012, in recognition of the
organization’s efforts to promote peace and democracy in Europe.
It eliminates all border controls between members. The open border allows the free flow of
goods and people. There may be police checks, based on police information and experience,
that are not equivalent to border checks.2
Any product manufactured in one EU country can be sold to any other member without tariffs or
duties.3 Practitioners of most services, such as law, medicine, tourism, banking, and insurance,
can operate a business in all member countries.4. The EU's purpose is to be more competitive in
the global marketplace. At the same time, it must balance the needs of its independent fiscal and
political members.
Its 27 member countries are Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic,
Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania,
Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, and
Sweden.

Objectives of EU
Generally, the objectives of the EU may be listed as follows:
1. The abolition of tariff and non-tariff quantitative and other restrictions with regard to the
import and export of goods between the member States.

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2. The abolition of all restrictions upon services and capital between the member states and the
free movement of persons.
3. The establishment of common customs tariff and of a common commercial policy towards the
non-member countries.
4. The establishment of common farm policy and common transport policy.
5. The establishment of a system to ensure that competition shall not be distorted in the common
farm policy and common market.
6. Application and coordination of economic policies of the member states for remedying their
balance of payment disequilibria.
7. The creation of European social fund for improving the possibilities of employment for the
workers and for ensuring a rise in their standard of living.
8. The approximation of the legislation of the member states to the extent necessary for the
efficient functioning of the common market.
Organizational structure of EU
The organizational structure of European Union is made up of
1. The executive commission,
2. The council of ministers,
3. The European parliament,
4. The court of justice,
5. The economic and social committee, and
6. The monetary committee.

African Union (AU)

The African Union (AU) is a continental body consisting of the 55 member states that make up
the countries of the African Continent. It was officially launched in 2002 as a successor to the
Organisation of African Unity (OAU, 1963-1999).

The launch of the African Union:

The African Union (AU) was officially launched in July 2002 in Durban, South Africa,
following a decision in September 1999 by its predecessor, the OAU to create a new continental
organisation to build on its work. The decision to re-launch Africa’s pan-African organisation
was the outcome of a consensus by African leaders that in order to realise Africa’s potential,
there was a need to refocus attention from the fight for decolonisation and ridding the continent
of apartheid, which had been the focus of the OAU, towards increased cooperation and
integration of African states to drive Africa’s growth and economic development.
The AU is guided by its vision of “An Integrated, Prosperous and Peaceful Africa, driven by
its own citizens and representing a dynamic force in the global arena.”
The Constitutive Act of the African Union and the Protocol on Amendments to the Constitutive
Act of the African Union lay out the aims of the AU which are:
 Achieve greater unity and solidarity between African countries and their the people
 Defend the sovereignty, territorial integrity and independence of its Member States;
 Accelerate the political and socio-economic integration of the continent;
 Promote and defend African common positions on issues of interest to the continent and
its peoples;
 Encourage international cooperation

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  Promote peace, security, and stability on the continent;
 Promote democratic principles and institutions, popular participation and good
governance;
 Promote and protect human and peoples’ rights in accordance with the African Charter
on Human and Peoples’ Rights and other relevant human rights instruments;
 Establish the necessary conditions which enable the continent to play its rightful role in
the global economy and in international negotiations;
 Promote sustainable development at the economic, social and cultural levels as well as
the integration of African economies;
 Promote cooperation in all fields of human activity to raise the living standards of
African peoples;
 Coordinate and harmonise the policies between the existing and future Regional
Economic Communities for the gradual attainment of the objectives of the Union;
 Advance the development of the continent by promoting research in all fields, in
particular in science and technology
 Work with relevant international partners in the eradication of preventable diseases and
the promotion of good health on the continent.
 Ensure the effective participation of women in decision-making, particularly in the
political, economic and socio-cultural areas;
 Develop and promote common policies on trade, defence and foreign relations to ensure
the defence of the Continent and the strengthening of its negotiating positions;
 Invite and encourage the full participation of the African Diaspora as an important part of
our Continent, in the building of the African Union.
The work of the AU is implemented through several principal decision making organs:- The
Assembly of Heads of State and Government, the Executive Council, the Permanent
Representatives Committee (PRC), Specialised Technical Committees (STCs), the Peace and
Security Council and The African Union Commission. The AU structure promotes participation
of African citizens and civil society through the Pan-African Parliament and the Economic,
Social & Cultural Council (ECOSOCC).

African Development Bank (AfDB)

Established to promote economic and social development efforts on the continent, the African
Development Bank (AfDB) Group comprises three entities: the African Development Bank
(AfDB) which is the parent institution, created following an agreement signed by 23 founding
member states on August 14, 1963 in Khartoum, Sudan. This became effective on September 10,
1964. The group includes two concessionary windows – the African Development Fund (ADF),
established on November 29, 1972 by the African Development Bank and 13 non-African
countries; and the Nigeria Trust Fund (NTF), set up in 1976 by the Federal Government of
Nigeria.
The inaugural meeting of the Board of Governors of the Bank was held from November 4 to 7,
1964 in Lagos, Nigeria, and the headquarters was opened in Abidjan, Côte d’Ivoire, in March
1965. The Bank’s operations commenced on July 1, 1966. From February 2003, the Bank
operated from its Temporary Relocation Agency (TRA) in Tunis, Tunisia, due to the prevailing
political conflict in Côte d’Ivoire at the time until late 2013 when it commenced the return to its
headquarters in Abidjan. In June 2015, over 1,500 staff had returned to headquarters out of the
more than 1,900 total staff complement in the Bank.

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Membership
Membership of the AfDB Group at the end of May 2015, comprised 54 African countries and 26
non-African countries. To become an AfDB member, non-regional countries must first be ADF
members.

Mission & Strategy

The overarching objective of the African Development Bank (AfDB) Group is to spur
sustainable economic development and social progress in its regional member countries (RMCs),
thus contributing to poverty reduction.
The Bank Group achieves this objective by:
 mobilizing and allocating resources for investment in RMCs; and
 providing policy advice and technical assistance to support development efforts.

Objectives
 This ten-year Strategy will focus on two objectives to improve the quality of Africa’s
growth: inclusive growth, and the transition to green growth.
 Inclusive growth
 The first and overarching objective is to achieve growth that is more inclusive, leading
not just to equality of treatment and opportunity but to deep reductions in poverty and a
correspondingly large increase in jobs.
 Unlocking the continent’s great potential—and increasing its chances of reaping a
demographic dividend—inclusive growth will bring prosperity by expanding the
economic base across the barriers of age, gender and geography.
 The Bank will invest in infrastructure that unlocks the potential of the private sector,
championing gender equality and community participation. It will help improve skills for
competitiveness, ensuring that those skills better match the opportunities and
requirements of local job markets.
 Green growth
 The second objective is to ensure that inclusive growth is sustainable, by helping Africa
gradually transition to “green growth” that will protect livelihoods, improve water,
energy and food security, promote the sustainable use of natural resources and spur
innovation, job creation and economic development.
 The Bank will support green growth by finding paths to development that ease pressure
on natural assets, while better managing environmental, social and economic risks.
 Priorities in reaching green growth include building resilience to climate shocks,
providing sustainable infrastructure, creating ecosystem services and making efficient
and sustainable use of natural resources (particularly water, which is central to growth
but most affected by climate change).

References
https://www.toppr.com/guides/general-awareness/international-financial-organisation/world-
bank/

https://www.investopedia.com/articles/world-bank-definition/

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https://www.investopedia.com/ask/answers/043015/what-difference-between-international-
monetary-fund-and-world-bank.asp

https://www.s4d4c.eu/topic/4-2-1-the-history-of-the-european-union-a-cooperation-integration-
process/

https://www.yourarticlelibrary.com/trade-2/gatt-general-agreement-on-tariffs-and-trade-origin-
objectives-tariff-negotiation/26279

https://www.investopedia.com/terms/g/gatt.asp

https://accountlearning.com/gatt-objectives-principles/