The IMF and World Bank are called the ‘Bretton Woods Twins’. John Maynard Keynes labelled IMF & World Bank as “Master Fund” and “Miss Bank” respectively. This assignment of gender reveals the functions of the two Institutions quite well.
(Note: This characterisation plays to the gender stereotypes. Apologies for that but it does serve the purpose well.)
International Monetary Fund, called the “Master Fund” by Keynes is narrowly focused on macroeconomic imperatives like stabilizing currency exchange rates, financing balance of payment deficits and advising borrowing governments to make the requisite changes in its economy. It is seen as a meaner of the two twins. In 1991, as India battled with its balance of payment crisis, India had to knock on the doors of IMF. The Indian economy, which had been a closed one till that time was forced to liberalize itself. They call it ‘structural adjustment’ measures.
IMF’s help is conditioned on the country’s promise to change itself. That does have an overtone of a tight-fisted gentleman (or not-so-gentle man). If you want to be more generous in your perception of IMF, think of it as your father who tries to discipline you once in a while when you go off the road. If your finances are not in shape, he will lend you but only if you promise to mend your ways of handling your finances. And yes, like all fathers, he too thinks that he knows what’s best for you: Free Market.
At IMF, you’ll find mostly professional economists and financial experts. IMF publishes reports which sound pretty highfalutin like Global Financial Stability Report & World Economic Outlook.
World Bank, or officially the International Bank for Reconstruction and Development (IBRD), is primarily aimed at financing economic development. ‘Development’ is a softer word that the more muscular term “economic growth” & thus the label “Miss. Bank”, a nourishing institution looking at development as just as sound economic fundamentals but as quality healthcare, education, water, infrastructure, etc. It is seen as more benign than IMF.
World Bank’s current projects in India can help you understand its purpose. It collaborates with Government of India on a project called ‘Atal Bhujal Yojana’ which is a plan for managing groundwater. Similarly Tejaswini project is for Socio-economic empowerment of Young women and adolescent girls. Its contribution to schemes like National Nutrition Mission, Projects on Climate resilient agriculture, etc gives you an idea that World Bank is focused on a broader definition of development.
World Bank comprises of IBRD and International Development Association (IDA) which gives loans at concessional rates to poor countries. At World Bank, you’ll find a whole range of people like economists, engineers, urban planners, agronomists, statisticians, lawyers, portfolio managers, loan officers, project appraisers, as well as experts in telecommunications, water supply and sewerage, transportation, education, energy, rural development, population and health care, and other disciplines. World Bank’s report do not sound as intimidating as that of the IMF’s. They are Ease of Living Index Report, Universal Health Coverage Index, Remittance Report, etc.
IMF and World Bank have different purposes, Size and Structure (World Bank is about three times the size of IMF), Sources of Funding and recipients of funding (IMF only lends to countries in distress). This is a very simplistic way to look at the two institutions but it helps.