# What are the key differences between the IMF and the World Bank? **URL:** \ **Category:** Factual Questions\ **Created:** [July 1, 2011, 10:50pm UTC](https://boards.straightdope.com/t/what-are-the-key-differences-between-the-imf-and-the-world-bank/587566 "2011-07-01T22:50:00Z")\ **Posts on this page:** 8\ **Page:** 1
**Author:** ![KarlGauss](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/karlgauss/32/3713_2.png) [@KarlGauss](https://boards.straightdope.com/u/KarlGauss)\ **Post date:** [July 1, 2011, 10:50pm UTC](https://boards.straightdope.com/t/what-are-the-key-differences-between-the-imf-and-the-world-bank/587566/1 "2011-07-01T22:50:00Z")
I’ll admit at the outset that I probably could get some sense of the answer to this question by digging around and reading a bit (and I actually have tried to read about them). That being said, even after doing a lot more ‘research’, I doubt I’d be confident that I’d identified the key, critical, differences between the two. On the other hand, I know I would be very confident in any insights provided by the people around here. I’ve witnessed time and time again how they’ve nailed the salient points of even complex issues. It would be silly not to avail myself of this collective wisdom. So, my question again: What are the key differences (both in theory and in practice, I suppose) between the International Monetary Fund and the World Bank? Thanks! ---
**Author:** ![Nametag](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/nametag/32/406_2.png) [@Nametag](https://boards.straightdope.com/u/Nametag)\ **Post date:** [July 2, 2011, 2:18am UTC](https://boards.straightdope.com/t/what-are-the-key-differences-between-the-imf-and-the-world-bank/587566/2 "2011-07-02T02:18:52Z")
The IMF and the World Bank were both founded at the Bretton-Woods conference of 1945. The goal of the IMF is mainly to stabilize exchange rates, while the World Bank’s goal is reduce poverty. The IMF lends money and provides other aid, with conditions that they believe further their goals: liberal economic policies (i.e., free markets instead of planned economies), balanced budgets, and balanced trade. The World Bank, well, they’re a bit more focused on development, but they really have the same attitude as the IMF about what leads to prosperity, so they do much the same thing. They haven’t been very successful in reducing poverty. ---
**Author:** ![Little\_Nemo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/little_nemo/32/3120_2.png) [@Little\_Nemo](https://boards.straightdope.com/u/Little_Nemo)\ **Post date:** [July 2, 2011, 2:50am UTC](https://boards.straightdope.com/t/what-are-the-key-differences-between-the-imf-and-the-world-bank/587566/3 "2011-07-02T02:50:00Z")
I’m glad I read Nametag’s post first. I was going to guess ATM fees. ---
**Author:** ![Measure\_for\_Measure](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/measure_for_measure/32/557_2.png) [@Measure\_for\_Measure](https://boards.straightdope.com/u/Measure_for_Measure)\ **Post date:** [July 2, 2011, 3:03am UTC](https://boards.straightdope.com/t/what-are-the-key-differences-between-the-imf-and-the-world-bank/587566/4 "2011-07-02T03:03:56Z")
The World Bank is a fund and the International Monetary Fund is a bank. The World Bank makes grants and soft loans to third world countries to fight poverty and aid development. The IMF extends loans when countries get into trouble and mandates that they follow capitalist friendly (and economically sustainable) policies. ---
**Author:** ![KarlGauss](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/karlgauss/32/3713_2.png) [@KarlGauss](https://boards.straightdope.com/u/KarlGauss)\ **Post date:** [July 2, 2011, 3:44am UTC](https://boards.straightdope.com/t/what-are-the-key-differences-between-the-imf-and-the-world-bank/587566/5 "2011-07-02T03:44:26Z")
Thanks; so it seems that the IMF is more doctrinaire (seeking to facilitate the spread and consolidation of free market economies) whereas the World Bank, ostensibly, is working in a practical way to reduce poverty. Is that about right? The above notwithstanding, judging from what you wrote and from what I’ve read, it seems that despite their theoretical different _raisons d’etre_, in practice the two organizations have a lot in common. ---
**Author:** ![Measure\_for\_Measure](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/measure_for_measure/32/557_2.png) [@Measure\_for\_Measure](https://boards.straightdope.com/u/Measure_for_Measure)\ **Post date:** [July 3, 2011, 4:40am UTC](https://boards.straightdope.com/t/what-are-the-key-differences-between-the-imf-and-the-world-bank/587566/6 "2011-07-03T04:40:26Z")
Well they are sometimes called the Bretton Woods twins. The World Bank is pretty easy to understand: it’s an international development organization: > [@Wikipedia](#): > > The World Bank is an international financial institution that provides loans to developing countries for capital programmes. The World Bank’s official goal is the reduction of poverty. The IMF has a goal more akin to financial stability or crisis management. > [@Wikipedia](#): > > The International Monetary Fund (IMF) is an intergovernmental organization that oversees the global financial system by monitoring the macroeconomic policies of its member countries, in particular those with an impact on exchange rate and the balance of payments. Its objectives are to stabilize international exchange rates and facilitate development through the encouragement of liberalising economic policies in other countries as a condition of loans, debt relief, and aid. It also offers loans with varying levels of conditionality, mainly to poorer countries. The IMF gets a lot of heat, because it imposes conditions on the loans that it extends, which often result in austerity programs. And international banks are reluctant to lend to governments in trouble if they do not have an IMF program. After the Asian crisis of the 1990s, China and other countries built up huge foreign reserves to avoid the possibility of a humiliating IMF program. I understand that the IMF under the last President was less doctrinaire than certain other international organizations such as the OECD or the BIS. That is, the IMF’s views reflected conventional aggregate demand management, as opposed to liquidationism, for lack of a better term. ---
**Author:** ![Measure\_for\_Measure](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/measure_for_measure/32/557_2.png) [@Measure\_for\_Measure](https://boards.straightdope.com/u/Measure_for_Measure)\ **Post date:** [July 3, 2011, 8:05pm UTC](https://boards.straightdope.com/t/what-are-the-key-differences-between-the-imf-and-the-world-bank/587566/7 "2011-07-03T20:05:11Z")
The business section of today’s NYT’s has a breathless article on the World Bank’s information-sharing attempts, full of fake controversy. But the author succinctly characterizes the two institutions: "The World Bank’s traditional role has been to finance specific projects that foster economic development, whereas the I.M.F’s goal is to safeguard the global monetary system. " ---
**Author:** ![Tom\_Tildrum](https://avatars.discourse-cdn.com/v4/letter/t/e95f7d/32.png) [@Tom\_Tildrum](https://boards.straightdope.com/u/Tom_Tildrum)\ **Post date:** [July 3, 2011, 11:50pm UTC](https://boards.straightdope.com/t/what-are-the-key-differences-between-the-imf-and-the-world-bank/587566/8 "2011-07-03T23:50:02Z")
If memory serves, one original purpose of the IMF was to manage the Bretton Woods-era gold standard, until the US went off that system in the early 1970s.