World Bank Group

The World Bank Group is a family of five international institutions, owned by member governments, that provide loans, grants, equity investments, guarantees and policy advice to developing countries. Its stated mission is to end extreme poverty and boost shared prosperity on a livable planet. When people say "the World Bank", they usually mean its two public-sector lenders, the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA).

The group was born at the 1944 conference that created the Bretton Woods system, alongside its sister institution, the International Monetary Fund (IMF). The two are often confused. The IMF deals with exchange rates, balance of payments problems and short-term crises; the World Bank finances long-term development such as roads, power, schools and health systems. Both are headquartered in Washington, DC.

Think of the World Bank Group as a cooperative bank owned by almost every country in the world. Richer members put in capital and guarantees, which let the bank borrow cheaply on financial markets. It then lends that money on to poorer members for projects that ordinary lenders would find too long, too risky or too unprofitable, such as a national electricity grid or a rural clinic network.

The poorest countries get something closer to a family loan: grants or very cheap credit repaid over decades. Middle-income countries pay more, but still less than they would borrowing alone. Alongside the money comes advice, research and data, which many governments rely on as much as the loans themselves.

• IBRD (1944). Lends to governments of middle-income and creditworthy lower-income countries, funded largely by selling AAA-rated bonds to investors. It has 189 member countries.
• IDA (1960). Gives grants and highly concessional credits to the poorest countries. It is funded by donor contributions renewed every three years; the IDA21 replenishment, agreed in December 2024, was announced at about $100 billion.
• International Finance Corporation (IFC, 1956). Invests in and lends to private companies in developing countries, aiming to mobilize foreign direct investment and domestic private capital.
• Multilateral Investment Guarantee Agency (MIGA, 1988). Sells political-risk insurance, covering investors and lenders against expropriation, war, currency inconvertibility and breach of contract.
• International Centre for Settlement of Investment Disputes (ICSID, 1966). Provides facilities for arbitration and conciliation between foreign investors and states.

The World Bank sorts every economy into four income groups each July using gross national income (GNI) per person, converted with its Atlas method. For fiscal year 2027 (from 1 July 2026), the thresholds are: low income at $1,175 or less; lower-middle income from $1,176 to $4,635; upper-middle income from $4,636 to $14,375; and high income above $14,375. These groups decide which countries may borrow from IDA and are widely used as shorthand for low- and middle-income countries and for developed countries.

The bank also sets the international poverty line, raised in June 2025 to $3.00 a day at 2021 purchasing power parity (PPP) prices, and publishes the World Development Indicators database. Its research on poverty, debt and growth, including the World Development Report, shapes academic and policy debate; the 2024 report was devoted to the middle-income trap.

Each member country holds shares roughly in line with its economic weight. The Board of Governors (usually finance or development ministers) meets at the Annual Meetings held jointly with the IMF; day-to-day decisions sit with a Board of Executive Directors. The United States is the largest shareholder and, because major changes to the Articles need an 85% supermajority, holds an effective veto over them. By convention since 1944, the president has been an American, while the IMF's managing director has been European. Ajay Banga has been president since June 2023.

An independent Inspection Panel, created in 1993, hears complaints from people who say they have been harmed by bank-financed projects. Lending is tied to environmental and social standards and, for policy loans, to reform conditions agreed with the borrowing government.

The bank has faced criticism from several directions:

• Policy conditions. In the 1980s and 1990s, structural adjustment loans required cuts in subsidies, privatization and trade opening, linked to the Washington Consensus. Critics argue these hurt the poor and weakened states; defenders point to countries that stabilized and grew afterwards, and the bank itself has since acknowledged mixed results.
• Governance. Emerging economies such as China, India and Brazil argue their voting shares lag their size. The American presidency convention is contested, and alternatives such as the BRICS-founded New Development Bank have appeared alongside the wider BRICS grouping.
• Projects and debt. Large dams and extractive projects have displaced communities, and lending has contributed to debt burdens later addressed through relief programs and debt rescheduling.
• Market-oriented critics argue that official lending can crowd out private capital, reward poor policy and create moral hazard.

Supporters reply that the bank funds infrastructure, health and education where private markets will not, provides counter-cyclical lending in crises, and supplies global public goods such as data and research. Its work is increasingly framed around the Sustainable Development Goals, climate finance and support for emerging markets as well as the poorest states.

• World Bank Group
• World Bank Country and Lending Groups