1.What is the Bretton Woods Institution?
The Bretton Woods Institutions as the World Bank, the International Fund, (also known as IMF). They were set up at a meeting of 43 countries in Bretton Woods, New Hampshire, USA in July 1944. Their aims were to help rebuild the collapsed post-war economy and to promote international economic co-operation. The original Bretton Woods agreement also included plans for International Trade Organisation (ITO) but these were never established until the World Trade Organisation (WTO) was created in the early 1990s.
The establishment of the World Bank and the IMF came at the end of the Second World War. They were based on the ideas of a trio of key experts - US Treasury Secretary Henry Morganthau, his chief economic advisor Harry Dextor White, and British economist John Maynard Keynes. They wanted to establish a post-war economic order based on notions of consensual decision-making and co-operation in the realm of trade and economic relations.
They believed that the IMF would create a stable climate for international trade by harmonising its members' monetary policies and maintaining exchange stability. It would be able to provide temporary financial assistance to countries encountering difficulties with their balance of payments.
On the other hand, the World bank would serve to improve the capacity of countries to trade by lending money to war-ravaged and impoverished countries for reconstruction and development projects.
2.What is the World Bank?
The World bank was established in 1944 and is one of the worlds largest sources of development assistance. "The bank, which provided US$19.5 billion in loans to its client countries in fiscal year 2002, is nor working in more than 100 developing economies, bringing a mix of finance and ideas to improve living standards and eliminate the worst forms of poverty. " For...