The World Bank and Development Lending

The International Bank for Reconstruction and Development was created to finance rebuilding after the Second World War; its first loan, in 1947, went to France. As the Marshall Plan took over European reconstruction, the Bank turned to developing countries, lending for dams, roads, power stations and later education, health and governance. The International Development Association, founded in 1960, gives the poorest countries grants and very low-interest, long-term loans, while the IBRD lends to middle-income countries on near-market terms.

Together these form the World Bank, headquartered in Washington and, by convention, led by an American. Its large projects have been praised for building infrastructure but criticized for displacing communities and harming the environment, as in protests over dams in India's Narmada valley, which led the Bank to withdraw in 1993. The Bank has since adopted social and environmental safeguards and emphasizes poverty reduction, yet it still faces debate over effectiveness and governance.