The International Monetary Fund

and the World Bank

1
IMF+WB = the Bretton
Woods institutions
Neo-Marxist presentations of the Bretton Woods institutions always start with
Criticism of the IMF and World Bank
• It is argued that
• These economic organizations were established as universal in principle but, in fact, began
as closely held institutions of the Western powers.
• These institutions have become more inclusive over time, but effective control - both
formal and informal - remains in Western hands.
• Created by and for advanced countries
• Managed by industrialised countries for industrialised countries
• Dominated by the US and Western European Countries
• Developing countries voiceless and powerless in the IMF
• Structure can facilitate exploitation
• Structure is ineffective
• Has not adjusted sufficiently to address the needs of developing countries
• Deficient reform efforts
• Lack of transparency and accountability
• Managing Director has always been European 3
Neorealist analysis of the IMF and World Bank
• Power
• Distribution of Power in the International Organizations
• Hegemon
• Balancing and Band wagoning
• Alliances
• Relative Gains
• Role and Relevance of International Organizations

4
• Neoliberals stress:
• Acknowledge Power dynamics in the Organization
However, stress
• Relevance of International Organizations
• Forum for decision making and collective decision making
• Absolute gains
• Mutual benefits and Mutual costs
• International cooperation
• Interdependence
• Repeated Interaction

5
• Constructivists stress
• Dominant norms and values imposed by the hegemon
• Acceptance of dominant norms
• Shared ideas of members
• Collectively held beliefs construct the interests and identities of actors

6
Theoretically, both the IMF and the World Bank represent international
regimes.
They can be studied using the three theories of regimes:
• Realist: member states cooperate within the IMF and the WB only
because they are compelled by the American hegemon. If US hegemony
comes to an end, the two institutions will immediately be dismantled.
• Neoliberal: cooperation was imposed by the hegemon, but member states
have discovered that they also get benefits. Even if the US hegemon
disappears, cooperation will continue. The IMF and the WB will survive
after a change in voting power.
• Constructivist: cooperation was imposed by the hegemon, whose norms
and values became dominant and were accepted by member states. It is
impossible to predict the evolution of the two institutions if American
hegemony comes to an end. It all depends on the ideas shared by
member states at that time. 7
• In the Examination of the Organizational Structure of the IMF and
World Bank we will examine these simultaneously
• “Neoliberal institutions however Neorealist in its structure”

8
IMF and World Bank Reform to the Organizational Structure/Decision
Making of these International Organizations
2008 and 2010 Reform Packages
• To find a way to give dynamic emerging market countries a greater
say in the running of the institution
• The reform will also enhance the influence of low-income countries in the IMF’s
decision-making, including in its 25-member Executive Board.

• Source IMF
2008 Reform
• provides for quota increases for 54 countries, with the
largest gains going mainly to dynamic emerging market
countries, for Korea, China, India, Singapore, Turkey, Brazil
and Mexico.
• Emerging market countries are the main beneficiaries of
this aggregate shift in quota shares of 4.9 percentage
points.
• The IMF’s Governors in April 2008, the package had been
signed into law in 117 member countries, representing
85.04 percent of total voting power in the IMF.
• Korea saw its quota increase by 106 percent
• Singapore by 63 percent, Turkey by 51 percent;
• China by 50 percent; India by 40 percent;
• Brazil by 40 percent; Mexico by 40 percent
• The tripling of basic votes will enhance the voice and participation of low-
income countries in the IMF.
• Flexibility for the African chairs at the IMF Executive Board to improve their
representation by appointing a second Alternate Executive Director.
• A greater role for China, India, South Africa and Brazil had been long
overdue at the institution.
• And Europe's outsized say on the IMF's Board of Governors -- where it
had 33 percent of the votes, despite having just a 20 percent share of
global economic output -- was difficult to ignore.
• (Europe agreed to reduce its percent of the votes to 30%)
Transparency/Selection of Managing Director
and World Bank President
• On March 21, 2011, the World Bank Group’s Board of Executive Directors
approved principles to guide open, merit-based, and transparent
Presidential selections (Selection Principles). The Selection Principles were
applied to the 2012 selection and were the main guidance on the
Presidential selection process.

• Seeking an end to US dominance on the World Bank, BRICS have said that
the appointment of President of the multilateral agency should be based on
merit and "not on nationality"(Economic Times article: Feb 26, 2012)
• Reform called for more transparency and accountability as well as Merit vs
Nationality
• In 2011, the Board of Executive Directors approved the process for selection
of the President.  It reconfirmed the importance of a merit-based and
transparent process with all Executive Directors able to nominate and then
consider all candidates. 
• The Executive Directors agreed that candidates should meet the following
criteria:
• a proven track record of leadership;
• experience of managing large organizations with international exposure, and a
familiarity with the public sector;
• the ability to articulate a clear vision of the World Bank Group’s development
mission;
• a firm commitment to and appreciation for multilateral cooperation; and,
• effective and diplomatic communication skills, impartiality and objectivity in the
performance of the responsibilities of the position
• Following the close of the nomination process, the Executive Directors
decided on a shortlist of up to three candidates, and published the names of
the shortlisted candidates with their consent.  Formal interviews by the
Executive Directors would be conducted for all shortlisted candidates with
the expectation of selecting the new President by consensus by the Spring
Meetings of 2012
• Nigerian Candidate:
• Dr. Ngozi Okonjo-Iweala
• Former Minister of Finance (Nigeria)
• Former Managing Director of World Bank
• Economist
• Harvard Graduate

• Columbian Candidate
• Dr. José Antonio Ocampo
• Professor of Professional Practice in International and Public Affairs and Director of the Economic and Political Development
Concentration at the School of International and Public Affairs Columbia University
• Former Minister of Finance and Min of Agriculture and Rural Development (Columbia)
• Former UN Under Secretary-General
• Yale University Graduate
• Withdrew Nomination

• US Candidate
• Dr. Jim Yong Kim
• Global Leader in Health
• Former Chair, Department of Global Health Harvard Medicine School
• Former President of Dartmouth College
• Harvard Graduate
• Kim, was elected to the top position with the support of the US allies
in Western Europe, Japan, Canada and some emerging market
economies, including Russia, Mexico and South Korea.
• Leaving critics and some countries including developing countries
questioning the selection process.
• Elizabeth Stuart, of Oxfam, said: "This election has still not been open
or transparent. The world deserves better than a sham selection
process with a forgone conclusion."
• Justin Forsyth, chief executive of Save the Children, said:
• "It is patently wrong that nationality should trump other criteria when
deciding who leads the World Bank. The organisation exists to fight poverty,
yet until now those with hands-on experience of doing so have barely had a
chance at the top job.”
-
• G24 Developing Countries
• We recognize that for the first time in the history of the World Bank there was
an open process for the selection of the President that involved a debate on
the priorities and the future of the institution.
• Future selection processes must build on this process, but must be
transparent and truly merit-based.
• April 22nd 2012
Thorsten Benner (Spielberg online)
• During the Latin American and Asian financial crises, Europeans
certainly didn't make the case that the IMF should be led by someone
from the affected regions.
• Obama's nomination of Kim essentially ensured his selection, causing
exasperation among emerging powers for the United States' failure to consider
the Nigerian candidate Ngozi Okonjo-Iweala, who was widely thought to be more
qualified.

• US candidate preferred because

• US Congress support more likely
• US Treasury support more likely
• Private sector support and private investments (For WBG and developing countries) more
likely
• September 27, 2016— Executive Directors of the World Bank today
agreed unanimously to reappoint Dr. Jim Yong Kim to a second five-year
term as President of the World Bank Group, beginning July 1, 2017.  
• Executive Directors cited the achievements of Bank Group staff and
management during Dr. Kim’s first four years in office, and recognized his
leadership and vision. Chairs acknowledged several accomplishments the
institution has achieved during this time with strong Board support.
• Source:
• http://www.worldbank.org/en/news/press-release/2016/09/27/jim-yong-kim-
unanimously-reappointed-to-second-term-as-world-bank-group-president
• The abrupt departure of World Bank President Jim Yong Kim could
revive long-standing concerns about the degree of influence the U.S.
wields in selecting a new leader for the international financial
institution.
• The world's largest economy has always chosen World Bank leaders
and if President Donald Trump appoints one who shares his views,
experts say the organization's reputation and climate change program
could be at stake.
• https://www.cnbc.com/2019/01/10/worries-of-a-trump-appointed-w
orld-bank-chief-abound-as-kim-resigns.html
• Nominations open
• February 7th 2019 to March 14th 2019
• Executive Directors can nominate a candidate other Governors can
nominate through their Executive Director
• Executive Directors promise an open process as well as a merit-based
selection
• 3 short-listed candidates
• Interviews will be conducted
• Ms. (Ivanka) Trump…will assist the Treasury secretary, Steven
Mnuchin, and the acting White House chief of staff, Mick Mulvaney, in
choosing a successor to Jim Yong Kim
• New York Times, January 14th 2019
“It is not realistic for the U.S. to continue to support the World
Bank at current levels if it loses the World Bank presidency.”
— Daniel Runde, senior vice president and director, the Project on Prosperity and Development
• “I don’t know how long it will take to get a World Bank president
because I don’t know if there is a clear will among the majority of
countries to launch the process right away… adding that there may be
an interest in relying on an interim president if countries are nervous
about who the Trump administration might put forward as a
candidate….”
• Scott Morris, a senior fellow and director of the U.S. Development Policy
Initiative at the Center for Global Development Morris said.
• IMF Selection of the Managing Director

• Merit vs Nationality
• The IMF's 24-member Executive Board is responsible for selecting the
Managing Director. Past practice has been that Executive Directors
may submit a nomination for the position. Since the 2011 selection
round, IMF Governors could also submit nominations.
• In the 2011 selection, the Executive Board adopted a strengthened
process that supported the selection of the next Managing Director
through an open, merit-based, and transparent manner.
• The Executive Board adopted the same procedure to govern the 2016
selection
Selection of the Managing Director

• At the G-20 Summit in 2009, global leaders announced that the heads
of international financial institutions "should be appointed through an
open, transparent, and merit-based selection process."
• In 2011, however, European leaders failed to honor their promise and
insisted on a European to replace Dominique Strauss-Kahn as director
of the IMF.
• Chancellor of the Exchequer George Osborne announced that Britain
• will back Lagarde for IMF managing director, calling her “the outstanding
candidate for the IMF” and saying that he personally believes “it would be a
very good thing to see the first female managing director of the IMF in its 60-
year history.”
• Osborne said
• Lagarde has “shown real international leadership as chair of the G20 finance
ministers this year. She has also been a strong advocate for countries tackling
high budget deficits and living within their means.”
• German Chancellor Angela Merkel
• said that it is crucial that all Europeans now rally behind a candidate.
• Merkel stopped short of formally endorsing Lagarde but
• said she was a “distinguished” and “very experienced” personality
• Merkel would still like to see
• a European in charge at the IMF…. "In the current situation, which finds us
engaged in very many discussions about the euro, there are good reasons for
Europe to put forward good candidates," she said, in reference to the search for a
successor to Strauss-Kahn.
• She did allow that candidates from rising powers such as China, India and
others would be able to occupy the top job "in the mid-term."
• German Finance Minister Wolfgang Schaeuble said Lagarde would
give Europe its best chance to again lead the fund
• Critics argue that
• The signal Merkel is sending is a fatal one: Europeans want to hang on to their
prerogatives from the old world order as long as possible. And they will stop
at nothing to defend their possessions.
• A tight grip on the top IMF post weakens Europe because it damages Europe's
credibility at a time of significant and rapid global power shifts. And without
credibility, Europe will find it more difficult to encourage rising powers to play
a constructive role in international institutions.
Reform in the selection process of the
Managing Director?
• Selection process
• The IMF's 24-member Executive Board is responsible for selecting the
Managing Director.
• Past practice has been that Executive Directors may submit a
nomination for the position.
• In the  2011 selection round, IMF Governors could also submit
nominations.
• For the 2011 selection, the Executive Board adopted a procedure that
allowed the selection of the next Managing Director to take place in an
open, merit-based, and transparent manner.
• The procedure comprises the following aspects:
• The successful candidate for the position of Managing Director will have
a distinguished record in economic policymaking at senior levels, will
have demonstrated the managerial and diplomatic skills needed to lead
a global institution, and will be a national of any of the IMF’s member
countries.

• As chief of the IMF's staff and as Chairman of the Executive Board, (s)he
will be capable of providing strategic vision for the work of a high
quality, diverse, and dedicated staff; and will be firmly committed to
advancing the goals of the IMF by building consensus on key policy and
institutional issues
• (S)he will have a firm commitment to, and an appreciation of,
multilateral cooperation and will have a demonstrated capacity to be
objective and impartial.
• (S)he will also be an effective communicator.
• Drawing up a shortlist
• At the end of the nomination period, the IMF’s Secretary will announce
to the Executive Board the names of those nominees who have
confirmed their desire to be candidates. From these, the Executive
Board will draw up a shortlist of three candidates
• 2010 Reform Package
2010 Reform Package
• Quota Increase for Emerging States and Developing Countries
(Least Developed)
• A doubling of total quotas and a shift of more than 6 percent of quota
shares to dynamic emerging markets and developing countries.
• Reducing the shares of a number of advanced economies and oil
producing countries.
• The agreement also restructures the composition of the IMF’s
Executive Board (Executive Board increased by 1).
• There will be two fewer Board members from advanced European
countries, and all Executive Directors will be elected rather than
appointed.
• The size of the Board, which will remain at its current size, will be
reviewed every eight years.
 
• THE IMF

39
Original Purpose – Background
Protectionism = bad
In establishing the IMF, the world community was reacting to the unresolved financial
problems instrumental in initiating and protracting the Great Depression of the 1930s:
• Protectionist policies: Sudden, unpredictable variations in the exchange values of
national currencies
• Widespread disinclination among governments to allow their national currency to be
exchanged for foreign currency
• Sharply raising barriers to foreign trade, devaluing their currencies to compete
against each other for export markets, and curtailing their citizens' freedom to hold
foreign exchange.
• These attempts proved to be self-defeating. World trade declined sharply and
employment and living standards plummeted in many countries.

40
• US and UK were instrumental in the founding of the IMF and the World
Bank
• The pre-1944 breakdown in international monetary cooperation led the
IMF's founders to plan an institution charged with overseeing the
international monetary system:
Nations that are prepared, in a spirit of enlightened self-interest, to
relinquish some measure of national sovereignty by rejecting
practices injurious to the economic well-being of their fellow
member nations.
It would serve as the guardian of a system of "fixed, but adjustable"
exchange rates to prevent "beggar-thy-neighbor" trade policies and
competitive devaluations that were believed to have contributed
significantly to the length and severity of the Great depression.

41
 Present Day
Objectives/Purpose, as stipulated in its Articles of Agreement, are:
1. general:
• Working to foster global monetary cooperation
• Facilitate international trade
• Promote exchange stability
• Promote a multilateral system of payments
2. crisis-related:
• Make temporary financial resources available to members under “adequate
safeguards”
• In accordance with the above, to shorten the duration and lessen the
degree of disequilibrium in the international balances of payments of
members.
Source: http://www.imf.org/external/pubs/ft/aa/index.htm
42
Original Purpose: World Bank
• At Bretton Woods the international community
assigned to the World Bank the aims implied in its
formal name, the International Bank for
Reconstruction and Development (IBRD), giving it
primary responsibility for financing economic
development.

43
• The Bank’s first loans were extended during the late
1940s to finance the reconstruction of the war-
ravaged economies of Western Europe.

• When these nations recovered some measure of

economic self-sufficiency, the Bank turned its
attention to assisting the world’s poorer nations,
known as developing countries, to which it has since
the 1940s loaned more than $330 billion.

44
Redefined Purpose
• The World Bank Group has set two goals for the world
to achieve by 2030:
1. End extreme poverty
2. Promote shared prosperity

45
Ending Poverty
The World Bank reports that
• More than 1 billion people still live in deep poverty
• Rising inequality and social exclusion seems to accompany
rising prosperity in many countries.
Goal for ending extreme poverty:
• Decreasing the percentage of people living on less than $1.25 a
day to no more than 3%

46
Shared prosperity
• Goal: Fostering the income growth of the bottom 40% for every
country
• Expanding economic growth and redistributing in such a way that the
welfare of those at the lower end of the income distribution rises as
quickly as possible.
• Sustainable economic development
• In terms of the environment, social inclusion, and fiscal prudence.
48
 Fast Facts About the IMF
•Membership: 190 states (189 UN members and Kosovo)
•Headquarters: Washington, D.C.
•Executive Board: 24 Directors each representing a
single country or groups of countries
•Staff: Approximately 2,700 from 150 countries
•Total quotas: SDR 477 billion (US$692 billion) 

49
 The World Bank Group – is used to
refer to the following institutions
collectively
1. International Bank for Reconstruction and Development (IBRD)
• Est. 1946, “aims to reduce poverty in middle-income and creditworthy poorer
countries by promoting sustainable development through loans, guarantees, risk
management products, and analytical and advisory services”
2. International Development Association (IDA)
• Est.1960, interest-free loans and grants
3. International Finance Corporation (IFC)
• Est.1956, Private sector arm of the World Bank
4. Multilateral Investment Guarantee Agency (MIGA)
• Est.1988, Promotes Foreign Direct Investment in developing countries
5. International Centre for Settlement of Investment Disputes (ICSID)
• Est. 1966, facilitate the settlement of investment disputes between governments
and foreign investors

50
• The International Bank for Reconstruction and Development
(IBRD) is a global development cooperative owned by 189
member countries. 
• Headquarters in Washington DC, USA
• Created in 1944 to help Europe rebuild after World War II,
IBRD joins with IDA, to form the World Bank. 
• They work closely with all institutions of the World Bank
Group and the public and private sectors in developing
countries to reduce poverty and build shared prosperity.

51
• Membership and Subscriptions

• A critical examination of the IMF

52
The IMF currently has a near-global membership of 190 countries (non-
member UN states are North Korea, Cuba, Liechtenstein and Monaco).
• To become a member, a country must apply and then be accepted by
a majority of the existing members.
• Terms of membership – the policy is that new members should not
have permanent rights and obligations that differ from those of
original members.
• Membership is open to an applicant who: (a) is a “country” within the
attributes of statehood defined by int’l law, (b) is willing and able to
perform the obligations of membership contained in the Articles, and
(c) accepts the terms of a Membership Resolution of the Board of
Governors.
• Domestic legislation is not a valid defense for not observing
membership obligations.

53
The code is simple:
• it requires members to allow their currency to be exchanged for
foreign currencies freely and without restriction
• to keep the IMF informed of changes they contemplate in financial
and monetary policies that will affect fellow members’ economies
• to the extent possible, to modify these policies on the advice of the
IMF to accommodate the needs of the entire membership.
• To help nations abide by the code of conduct, the IMF administers a
pool of money from which members can borrow when they are in
trouble.

54
Membership: World Bank
• To become a member of the World Bank, under the IBRD
Articles of Agreement, a country must first join the
International Monetary Fund (IMF). (Membership in IDA, IFC
and MIGA are conditional on membership in IBRD).
• In tandem with the IMF, and in consultation with other
World Bank Group staff, the Corporate Secretariat Vice
Presidency coordinates the process for new membership and
maintains the information relating to the status of
membership which includes the membership lists.
55
A member country's quota defines its financial and
organizational relationship with the IMF, including:
Article III
• Subscriptions
• Voting Rights
• Access to Funding

56
• Upon joining, each member country of the IMF is assigned a
quota, based broadly on its relative size in the world
economy.
• Determined by GDP, as well as the degree of
openness/integration into the world economy

57
Subscriptions
• A member country's quota subscription determines the maximum
amount of financial resources the country is obliged to provide to the
IMF.
• A country must pay its subscription in full upon joining the IMF: up to
25 percent must be paid in the IMF's own currency, called Special
Drawing Rights (SDRs) or widely accepted currencies (such as the US
dollar, the euro, the yen, the Chinese renminbi (RMB), or pound
sterling), while the rest is paid in the member's own currency.

58
 What are Special Drawing Rights?
• Under its Articles of Agreement (Article XV, Section 1, and Article XVIII), the IMF
may allocate SDRs to member countries in proportion to their IMF quotas.
• The SDR is an international reserve asset, created by the IMF in 1969
to supplement its member countries' official reserves. Its value is
based on a basket of five key international currencies (the Chinese
renminbi (RMB), US Dollar, Euro, GBP, Yen), and SDRs can be
exchanged for hard currency (cash/funds)
• The SDR is neither a currency, nor a claim on the IMF. Rather, it is a potential claim
on the freely usable currencies of IMF members.
• Holders of SDRs can obtain these currencies in exchange for their SDRs in two ways:
• first, through the arrangement of voluntary exchanges between members; and
• second, by the IMF designating members with strong external positions to purchase SDRs
from members with weak external positions. 59
 Article XII: Section 5
Voting power
• The quota largely determines a member's voting power in IMF decisions.
• Each IMF member's votes are comprised of basic votes plus one additional vote
for each SDR 100,000 of quota.
• Doctrine of equality of states: the number of basic votes attributed to each
member is equal.
• Unlike the General Assembly of the United Nations, where each country has one
vote, decision making at the IMF was designed to reflect the relative positions of
its member countries in the global economy.
• According to the IMF: It continues to undertake reforms to ensure that its
governance structure adequately reflects fundamental changes taking place in the
world economy, including the larger role that emerging market and developing
economies now play in the global economy. 60
 Before the
reform, China
had less votes
than Italy

61
 Quota: Quota: Percentage
IMF Member Number of
Rank millions percentage of out of total
country votes
of SDR the total votes

1  United States 82,994.2 17.46 831,407 16.52

2  Japan 30,820.5 6.48 309,670 6.15

3  China 30,482.9 6.41 306,294 6.09
4  Germany 26,634.4 5.60 267,809 5.32
=5  France 20,155.1 4.24 203,016 4.03
=5  United Kingdom 20,155.1 4.24 203,016 4.03
7  Italy 15,070.0 3.17 152,165 3.02
8  India 13,114.4 2.76 132,609 2.64
9  Russia 12,903.7 2.71 130,502 2.59
10  Brazil 11,042.0 2.32 111,885 2.22 62
11  Canada 11,023.9 2.32 111,704 2.22

12  Saudi Arabia 9,992.6 2.10 101,391 2.02

13  Spain 9,535.5 2.01 96,820 1.92

14  Mexico 8,912.7 1.87 90,592 1.80

15  Netherlands 8,736.5 1.84 88,830 1.77

16  South Korea 8,582.7 1.81 87,292 1.73

17  Australia 6,572.4 1.38 67,189 1.34

18  Belgium 6,410.7 1.35 65,572 1.30

19  Switzerland 5,771.1 1.21 59,176 1.18

20  Indonesia 4,648.4 0.98 47,949 0.95 63

 When does voting power matter in the IMF/WB?
Although such complex and elaborate voting procedures exist, rarely is a vote held
within the IMF/WB, and when it is held the vote is usually unanimous or nearly so.
This is the case because the members are always making an effort to compromise
on an agreement all can accept. In fact, Rule C-10 of The Rules and Regulations of
the International Monetary Fund notes that the executive board chairman "shall
ordinarily ascertain the sense of the meeting in lieu of a formal vote."

Voting however matters in the following areas:

• Selection of the Managing Director/President of the World Bank
• Selection of Executive Board Members/Executive Directors
• Special majority vote (in some instances 85% required):Alliances and block voting
• Decision making by Executive Board

64
 Views on the Weighted Voting System
NEGATIVE:
• Developing countries voiceless and
powerless in the IMF and World
Bank
• Undemocratic system
• Questions international
cooperation
• Questions fairness and equity in
these IOs
POSITIVE:
• Ensures the progress and
effectiveness of the IMF, the World
Bank and their related institutions, all
of which have weighted voting
• Greater effectiveness in
implementing decisions
• More efficient
• Fair and equitable system as it
corresponds to the relative position
of each member to the world
economy
65
Access to financing:
• The amount of financing a member country can
obtain from the IMF is based on its quota.

66
The Quota system of the World Bank determines

• Shares allotment
• Voting Power
• Access to funding

67
Shares Allotment
• The quota assigned by the IMF is used to determine
the number of shares allotted to each new member
country of the World Bank.

68
Voting Powers
ARTICLE V: Section 3
• The World Bank and the IMF have adopted a weighted
system of voting.
• Each new member country of the Bank is allotted 250
votes plus one additional vote for each share it holds
in the Bank's capital stock.

69
70
71
 Country IBRD Country IFC Country IDA Country MIGA
24,682,95
World 2,201,754 World 2,653,476 World World 218,237
1
1 US 358,498 US 570,179 US 2,546,503 US 32,790
2 Japan 166,094 Japan 163,334 Japan 2,112,243 Japan 9,205
3 China 107,244 Germany 129,708 UK 1,510,934 Germany 9,162
4 Germany 97,224 France 121,815 Germany 1,368,001 France 8,791
5 France 87,241 UK 121,815 France 908,843 UK 8,791
United Saudi
6 87,241 India 103,747 810,293 China 5,756
Kingdom Arabia
7 India 67,690 Russia 103,653 India 661,909 Russia 5,754
Saudi
8 Saudi Arabia 67,155 Canada 82,142 Canada 629,658 5,754
Arabia
9 Canada 59,004 Italy 82,142 Italy 573,858 India 5,597
10 Italy 54,877 China 62,392 China 521,830 Canada 72
5,451
 Country IBRD Country IFC Country IDA Country MIGA

11 Russia 54,651 Netherlands 56,931 Poland 498,102 Italy 5,196

12 Spain 42,948 Belgium 51,410 Sweden 494,360 Netherlands 4,048

13 Brazil 42,613 Australia 48,129 Netherlands 488,209 Belgium 3,803

14 Netherlands 42,348 Switzerland 44,863 Brazil 412,322 Australia 3,245

15 Korea 36,591 Brazil 40,279 Australia 312,566 Switzerland 2,869

16 Belgium 36,463 Mexico 38,929 Switzerland 275,755 Brazil 2,832

17 Iran 34,718 Spain 37,826 Belgium 275,474 Spain 2,491

18 Switzerland 33,296 Indonesia 32,402 Norway 258,209 Argentina 2,436

Saudi
19 Australia 30,910 30,862 Denmark 231,685 Indonesia 2,075
Arabia
73
20 Turkey 26,293 Korea 28,895 Pakistan 218,506 Sweden 2,075
• Access to Funding
• As a development bank, the WB provides funding in
the form of loans and grants to developing
countries only
• Least developing countries are required to prepare
PRSPs (Poverty Reduction Strategy Papers)

74
• Structure of the International Monetary Fund (IMF)

75
76
Structure
Structure – Article XII: Section 1
• Board of Governors Article XII: 2
• Executive Board Article XII: 3
• Managing Director Article XII: 4
• International Monetary and Finance Committee (IMFC)

77
78
Structure of the World Bank (IBRD)
Organizational Structure – Article V
Board of Governors Article V: Section 2
Executive Directors Article V: Section 4
President Article V: Section 5
Staff/Vice Presidents Article V: Section 5
Development Committee/Advisory Committee Article V: Section 6

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Board of Governors: IMF

• The Board of Governors is the highest decision-

making body of the IMF.
• It consists of one governor and one alternate
governor for each member country.
• The governor is appointed by the member country
and is usually the Minister of Finance or the Head of
the Central Bank.

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While the Board of Governors has delegated most of its powers to
the IMF's Executive Board, it retains the right to decide on:
• Approving quota increases,
• Special drawing rights (SDR),
• Admittance of new members,
• Compulsory withdrawal of members,
• Amendments to the Articles of Agreement and By-Laws .
• Elects or appoints executive directors and is the ultimate arbiter
on issues related to the interpretation of the IMF's Articles of
Agreement.
Voting by the Board of Governors usually takes place by mail-in
ballot.
81
 IMF coordination with the World Bank

• The Boards of Governors of the IMF and the World Bank Group normally
meet once a year, during the IMF-World Bank Spring and Annual Meetings,
to discuss the work of their respective institutions.
• The Meetings have customarily been held in Washington for two
consecutive years and in another member country in the third year.
• The Annual Meetings are chaired by a Governor of the World Bank and the
IMF, with the chairmanship rotating among the membership each year.
• Every two years, at the time of the Annual Meetings, the Governors of the
Bank and the Fund  elect Executive Directors to their respective Executive
Boards.

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 Board of Governors
The organizations that make up the World Bank Group are owned by
the governments of member nations (189 members)
• The Board has the ultimate decision-making power within the
organizations
• Typically, the representatives are ministers of finance or
ministers of development
• They meet once a year at the Annual Meetings of the Boards of
Governors of the World Bank Group and the International
Monetary Fund

83
Board of Governors
The Boards of Governors has delegated all powers to the
Executive Directors except those mentioned in the Articles
of Agreement. These exceptions include:
• Admit and suspend members;
• Increase or decrease the authorized capital stock;
• Determine the distribution of the net income of the Bank;
• Decide appeals from interpretations of the Articles of Agreement
by the Executive Directors;
• Make formal comprehensive arrangements to cooperate with
other international organizations;
• Suspend permanently the operations of the Bank;
• Increase the number of elected Executive Directors; and
• Approve amendments to the Articles of Agreement.
84
The Boards of Directors
The Boards of Directors consist of
• The World Bank Group President
• 25 Executive Directors
• The President is the presiding officer, and ordinarily has no vote
except a deciding vote in case of an equal division.

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 Influence of G-20 on the IMF and the World Bank
Unwritten rules/role of the G-20 (not mentioned in the Articles
of Agreement)
• Review the quota system
• Review of the SDRs
• Review of the Lending Agreements
• Review international financial system
• Determine policy direction of the IMF and the World Bank
• Influences major decisions of the IMF and the World Bank
• Major decision on reforming IFIs

86
87
 The “G-2” = China + the United States
• US accuses China of predatory lending
• China’s increasing role and power in the IMF and the World Bank
• Concern over the rise of China

Under Presidents Jiang Zemin (1993-2003) and Hu Jintao (2003-

2013), China tried to increase its ability to influence the US-led
system of global governance while not challenging it.
It used the BRICS group to successfully increase its voting power at
the IMF, WB and G20.

88
However, President Xi Jinping (2013-present) came to the conclusion that
profoundly reforming these institutions in ways that would turn China into a
decisive actor is impossible because of
- the American hegemony and
- the existence of many other veto players.
While continuing the efforts of his predecessors to acquire more voting power
within US-led financial institutions, President Xi has started to set up a parallel
set of institutions that are similar to and challenge the Bretton Woods ones.
The most important are the Belt and Road Initiative (BRI) and the Asian
Infrastructure Investment Bank (AIIB). These are direct competitors of the IMF
and especially the World Bank.
China is following the same path as the United States after WWII.
It tries to impose its own international order based on Chinese-led multilateral
institutions.
89
 The Paris Club
• The Paris Club is an informal group of official creditors (i.e. states)
whose role is to find coordinated and sustainable solutions to the
payment difficulties experienced by debtor countries.
• As debtor countries undertake reforms to stabilize and restore
their macroeconomic and financial situation, Paris Club creditors
provide an appropriate debt treatment. Paris Club creditors
provide debt treatments to debtor countries in the form of
rescheduling, which is debt relief by postponement or, in the case
of concessional rescheduling, reduction in debt service obligations
during a defined period (flow treatment) or as of a set date (stock
treatment).
90
 The Executive Board of IMF
• The IMF's 24-member Executive Board takes care of
the daily business of the IMF. Together, these 24 board
members represent all 190 countries.
• 8 large economies have their own seat at the table but
most countries are grouped in constituencies
representing 4 or more countries.
• 8 countries each appoint an Executive Director: the
United States, Japan, Germany, France, the UK, China,
the Russian Federation, and Saudi Arabia
91
• The board normally makes decisions based on
consensus but sometimes formal votes are
taken.
• A member’s quota determines its voting
power. Informal discussions may be held to
discuss complex policy issues still at a
preliminary stage.

92
• The Executive Board (the Board) is composed of
24 Directors, who are appointed or elected by
member countries, and the Managing Director,
who serves as its Chairman.
• The Board usually meets several times each
week.
• It carries out its work largely on the basis of
papers prepared by IMF management and staff.

93
Executive Directors
• The governors delegate specific duties to 25 Executive Directors, who
work on-site at the Bank.
• Six Executive Directors are appointed by the members with the largest
numbers of shares, including, the United States, Japan, China,
Germany, France and the United Kingdom.
• The Russian Federation and Saudi Arabia each elect its own Executive
Director.
• Switzerland is head of its group.
• The other Executive Directors are elected by the other members.

94
 THE EXECUTIVE DIRECTORS

•It is argued that it is the Executive Directors, not the Board of

Governors, are the formal decision-makers of the Bank
They usually meeting twice a week to oversee activities such as the
approval of loans and guarantees, new policies, the administrative
budget, country assistance strategies and borrowing and financing
decisions
• They decide on all loan proposals submitted to them by the President
of the Bank and on Board policy matters within the framework of the
Articles of Agreement
• They present to the Board of Governors, at its annual meeting, an
audit of accounts, an administrative budget, and an annual report,
discussing the operations and policies of the Bank, and any other matter
that that think requires submission to the board
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 The Managing Director of the IMF
The current Managing Director
(MD) and Chairwoman of the
International Monetary Fund is
Bulgarian Economist Kristalina
Georgieva, who has held the post
since 1 October 2019.
• According to the IMF's Articles of
Agreement, the Managing Director “shall be
chief of the operating staff of the Fund and
shall conduct, under the direction of the
Executive Board, the ordinary business of
the Fund. Subject to the general control of
the Executive Board, he shall be responsible
for the organization, appointment, and
dismissal of the staff of the Fund.”
• The Managing Director is assisted by a First
Deputy Managing Director and three Deputy
Managing Directors 
• He or she appoints the Deputy Managing
Directors. 96
• An unwritten rule establishes that the IMF's Managing Director
must be European
Selection process
• The IMF's 24-member Executive Board is responsible for selecting
the Managing Director. Past practice has been that Executive
Directors may submit a nomination for the position. Since
the 2011 selection round, IMF Governors could also submit
nominations.
• In the 2011 selection, the Executive Board adopted a
strengthened process that supported the selection of the next
Managing Director through an open, merit-based, and
transparent manner. The Executive Board adopted the same
procedure to govern more recent selections. 97
Selecting the successful candidate
• The Executive Board meets with the shortlisted
candidates at the IMF’s headquarters in Washington,
D.C. 
• Thereafter, the Executive Board meets to discuss the
strengths of the candidates and to make a selection.
Although the Executive Board may select a Managing
Director by a majority of the votes cast, the objective
of the Executive Board is to select the Managing
Director by consensus.
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 Past and Present Managing Directors of the IMF
Term Dates Name Country of origin Background

Politician, Economist, Lawyer, Economics

1 6 May 1946 – 5 May 1951 Dr. Camille Gutt  Belgium Minister, Finance Minister

2 3 August 1951 – 3 October 1956 Ivar Rooth  Sweden Economist, Lawyer, Central Banker

Economist, Lawyer, Academic, League of Nations, 

3 21 November 1956 – 5 May 1963 Per Jacobsson  Sweden BIS
Lawyer, Businessman, Civil Servant, Central
4 1 September 1963 – 31 August 1973 Pierre-Paul Schweitzer  France Banker

Politician, Economist, Academic, Finance Minister,

5 1 September 1973 – 18 June 1978 Dr. Johan Witteveen  Netherlands Deputy Prime Minister, CPB

6 18 June 1978 – 15 January 1987 Jacques de Larosière  France Businessman, Civil Servant, Central Banker

7 16 January 1987 – 14 February 2000 Dr. Michel Camdessus  France Economist, Civil Servant, Central Banker

Politician, Economist, Civil Servant, EBRD,

8 1 May 2000 – 4 March 2004 Horst Köhler  Germany President

Politician, Businessman, Economics Minister,

9 7 June 2004 – 31 October 2007 Rodrigo Rato  Spain Finance Minister, Deputy Prime Minister

Dr.  Politician, Economist, Lawyer, Businessman,

10 1 November 2007 – 18 May 2011 Dominique Strauss-Ka  France Economics Minister, Finance Minister
hn
11 5 July 2011 – 12 September 2019 Christine Lagarde  France Politician, Lawyer, Finance Minister

12 1 October 2019 – present Kristalina Georgieva  Bulgaria Politician, Economist

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The President
• World Bank Group President chairs meetings of the
Boards of Directors and is responsible for overall
management of the Bank.

• The President is nominated by the member with the

greatest number of shares and selected by the Board
of Executive Directors for a five-year, renewable term.

• The president is, traditionally, a U.S. citizen.

100
Calls for Reform in the Selection of the World Bank
President
• In 2011, the Board of Executive Directors approved
the process for selection of the President.  It
reconfirmed the importance of a merit-based and
transparent process with all Executive Directors able
to nominate and then consider all candidates. 

101
• Jim Yong Kim, the 12th WB President
announced that he was stepping down as
the head of the World Bank, in a move
that sent shockwaves through the
international aid community.
• He resigned on 1 February 2019, three and
a half years before the expiry of his term in
2022.
• However, in a letter to staff that has likely
been seen as veiled criticism of the
organisation, the 59-year-old said: “The
opportunity to join the private sector was
unexpected, but I’ve concluded that this is
the path through which I will be able to
make the largest impact on major global
issues like climate change and the
infrastructure deficit in emerging markets.”
102
• David R. Malpass was selected as 13th President of
the World Bank Group by its Board of Executive Directors
on April 5, 2019.  His five-year term began on April 9.
• Mr. Malpass previously served as Under Secretary of the
Treasury for International Affairs for the United States.  Mr.
Malpass represented the United States in international
settings, including the G-7 and G-20 Deputy Finance
Ministerial, World Bank–IMF Spring and Annual Meetings,
and meetings of the Financial Stability Board, the
Organization for Economic Cooperation and Development,
and the Overseas Private Investment Corporation. 
• In 2018, Mr. Malpass advocated for the capital increase for
the IBRD and IFC as part of a reform agenda featuring
sustainable lending practices, more efficient use of capital,
and a focus on raising living standards in poor countries.
 He was also instrumental in advancing the Debt
Transparency Initiative, adopted by the Bank Group and
the IMF, to increase public disclosure of debt and thereby
reduce the frequency and severity of debt crises.       
• Before joining the U.S. Treasury, Mr. Malpass was an
international economist and founder of a macroeconomics
research firm based in New York City.  He served as chief
economist of Bear Stearns and conducted financial
analyses of countries around the world.
103
 Name Dates Nationality Background
Newspaper publisher and Chairman of the Federal
Eugene Meyer 1946–1946 United States
Reserve

John J. McCloy 1947–1949 United States Lawyer and US Assistant Secretary of War

Bank executive with Chase and executive director with

Eugene R. Black, Sr. 1949–1963 United States
the World Bank

George Woods 1963–1968 United States Bank executive with First Boston Corporation

President of the Ford Motor Company, US Defense

Robert McNamara 1968–1981 United States Secretary under Presidents John F. Kennedy and Lyndon
B. Johnson who escalated Vietnam War

Alden W. Clausen 1981–1986 United States Lawyer, bank executive with Bank of America

Barber Conable 1986–1991 United States New York State Senator and US Congressman

Lewis T. Preston 1991–1995 United States Bank executive with J.P. Morgan

United States Wolfensohn was a naturalised American citizen before

Sir James Wolfensohn 1995–2005
Australia (prev.) taking office. Corporate lawyer and banker

US Ambassador to Indonesia, US Deputy Secretary of

Defense, Dean of the School of Advanced International
Paul Wolfowitz 2005–2007 United States Studies (SAIS) at Johns Hopkins University, prominent
architect of 2003 invasion of Iraq, resigned World Bank
post due to ethics scandal

Robert Zoellick 2007–2012 United States Deputy Secretary of State and US Trade Representative

Former Chair of the Department of Global Health and

United States 104
Jim Yong Kim 2012–present Social Medicine at Harvard, president of Dartmouth
South Korea (prev.)
Ministerial Committees
The IMF Board of Governors is advised by two
ministerial committees:
• The International Monetary And Financial
Committee
• The Development Committee 

105
The International Monetary and Financial Committee
• The IMFC advises and reports to the IMF Board of Governors on the
supervision and management of the international monetary and
financial system, including on responses to unfolding events that
may disrupt the system.
• Although the IMFC has no formal decision-making powers, in
practice, it has become a key instrument for providing strategic
direction to the work and policies of the Fund.
• The IMFC usually meets twice a year, in September or October at
the Bank-Fund Annual Meetings and in March or April at what are
referred to as the Spring Meetings.

106
The Development Committee is a joint committee
• Tasked with advising the Boards of Governors of the
IMF and the World Bank on issues related to economic
development in emerging and developing countries.
• The committee has 24 members (usually ministers of
finance or development).
• It represents the full membership of the IMF and the
World Bank and mainly serves as a forum for building
intergovernmental consensus on critical development
issues.

107
Management
• The World Bank operates day-to-day under the
leadership and direction of the president,
management and senior staff, and the vice presidents
in charge of regions, sectors, networks and functions

108
• The Bank is managed by a President, 3 Managing
Directors, and about 24 Vice-Presidents who oversee
major operational units at the Bank’s headquarters in
Washington as well as over 100 country offices
• The Vice Presidents are the principal managers in
charge of regions, sectors, networks and functions
• In addition to 24 Vice-Presidents, there are 3 Senior
Vice Presidents and 2 Executive Vice-Presidents

109