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Updated May 1, 2023
The World Bank
The World Bank, the oldest and largest multilateral
Mastercard, to lead the Bank. The Executive Board expects
development bank, provides financial assistance to
to select a new President by early May 2023. Headquartered
developing countries to promote economic development.
in Washington, DC, the World Bank has more than 120
Established in 1945, the Bank initially focused on providing
offices and 10,000 employees worldwide.
financing for large infrastructure projects. During the past
Projects and Financing
75 years, its role has broadened to include poverty
The IBRD and IDA fund development projects around the
reduction efforts through social projects (such as education
world and in a variety of sectors (Figure 1). In terms of the
and health) and policy-based loans. Congress appropriates
World Bank’s active portfolio by region, Africa, South
U.S. financial contributions to the World Bank and
Asia, and East Asia and the Pacific are the top recipients.
exercises oversight of U.S. participation in the Bank.
By sector, the World Bank has projects focused on
Structure and Governance
transportation, energy, and water and sanitation, among
The World Bank has two major lending “windows” or
others. The IBRD and IDA disbursed $28 billion and $21
“facilities.” The International Bank for Reconstruction
billion, respectively, in FY2022.
and Development (IBRD), created in 1945, provides loans,
Figure 1. World Bank Active Portfolio, FY2022
guarantees, risk management products, and advisory
services to middle-income countries and some creditworthy
low-income countries. The IBRD currently has 189 member
countries. In 1960, at the suggestion of the United States,
the International Development Association (IDA) was
created to make concessional loans (with low interest rates
and long repayment periods) to the poorest countries. IDA
also now provides grants to these countries. IDA currently
has 173 member countries.
The IBRD and IDA operate according to procedures
established by their Articles of Agreement, documents that
outline the conditions of membership and general principles
of organization, management, and operations. The World
Bank’s highest decision-making authority is the Board of
Governors, which meets annually. Each member country is
represented on the Board of Governors, usually by the
finance minister or central bank governor.
The Board of Governors has delegated day-to-day authority
over operational policy, lending, and other matters to the
Board of Directors. There are 25 executive directors. The
five largest Bank shareholders (China, France, Germany,
the United Kingdom, and the United States) appoint their
own executive director. Other member countries are
represented by elected executive directors.
Board decisions are reached through voting. Each member
country’s voting share is weighted on the basis of its
Source: World Bank Annual Report 2022.
financial contributions to the World Bank. U.S. voting
Note: MENA = Middle East and North Africa.
power at the IBRD is 15.79% and at IDA is 9.86%. The
United States has unique veto power over amendments to
The World Bank is able to extend financial assistance to
the IBRD Articles of Agreement, but the U.S. cannot
developing countries due to the financial commitments of
unilaterally veto day-to-day decisions, such as the approval
its more prosperous member countries. The IBRD borrows
of individual projects.
money from international capital markets and then relends
the money to developing countries. The IBRD is able to
The president of the World Bank is selected by the Board of
borrow from international capital markets because it is
Directors for a five-year, renewable term. Traditionally, the
backed by the guarantees of member governments. The
Bank president has always been nominated by the United
IBRD’s total capital is $307 billion. Most of the capital
States. In February 2023, the current World Bank President,
($287 billion) are guarantees from donor countries
David Malpass, announced his resignation. The United
(“callable” capital) and a small portion ($20.5 billion, about
States has nominated Ajay Banga, previously head of
6.7%) has been paid to the IBRD by donor countries (“paid-
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The World Bank
in” capital). The United States has the largest financial
annual installments of a capital increase agreed to in 2018.
commitment to the IBRD, accounting for 16.69% of total
If not paid, the United States would lose voting power at the
IBRD resources. U.S. paid-in capital is $3.5 billion and
IBRD. The Administration is also requesting $1.48 billion
U.S. callable capital is $47.8 billion. To date, the IBRD has
for IDA, primarily for the first of three installments for the
never drawn on its callable capital. The IBRD earns income
most recent IDA replenishment (IDA-20).
on its equity investments and the interest it charges on
In terms of U.S. representation at the World Bank, the
loans, which it uses to pay for World Bank operating
Administration’s nomination of Treasury Secretary Janet
expenses. The IBRD also annually transfers a portion of its
Yellen as Governor to the IBRD in July 2021 is pending
net income to IDA.
before the Senate. The Administration’s nominee for the
IDA is able to provide low-cost loans and grants based on
IBRD Alternative Executive Director is also pending before
direct contributions by donor countries, in addition to the
the Senate. Adriana Kugler, a development and labor
annual transfer from IBRD. IDA also started issuing its own
economist from Georgetown University, was confirmed as
bonds in 2018 as a new way to raise resources. As IDA
Executive Director to the IBRD in April 2022.
extends concessional loans and grants to low-income
Potential Issues for Congress
countries, the window’s resources become depleted. Donor
World Bank reform agenda. Countries are currently
countries meet every three years, to replenish resources.
considering and negotiating reforms to the World Bank that
Across the 18 replenishments of resources since IDA’s
would allow it to focus more on global problems, including
creation, donor countries have contributed $292 billion to
climate change and pandemic preparedness. What World
IDA. U.S. contributions to IDA have fluctuated in recent
Bank reforms, if any, should the United States support?
replenishment cycles: $3.9 billion in the 17th replenishment
Does the United States support a capital increase for the
(IDA-17); $3.3 billion in IDA-18; $3.0 billion in IDA-19;
World Bank?
and $3.5 billion in IDA-20. IDA-20 negotiations concluded
in March 2022.
Alternative sources of development financing. The
World Bank was created to address shortages of capital
World Bank Financing: Key Policy Areas
after WWII. In subsequent decades, private international
capital markets developed and donor countries created new
COVID-19 pandemic: As of May 2023, the World Bank has
multilateral aid organizations. How does World Bank
approved more than 776 projects in 130 countries, totaling
financing fit with other sources of capital for developing
$124 bil ion, to help developing countries address the health
countries?
and economic exigencies of the pandemic.
The role of Russia. Russia continues to be a member of the
Russia’s war on Ukraine: The IBRD has not approved any
World Bank, and is the IBRD’s 8th largest shareholder.
new financing for Russia since it first invaded Ukraine in 2014;
Under what conditions should a country’s membership in
the World Bank further suspended all programming in Russia
the IBRD be suspended, and should Russia’s membership
in March 2022. Between February 2022 and April 2023, the
be reconsidered?
World Bank mobilized more than $23 bil ion in financial
support for Ukraine.
The role of China. According to Bank policy, countries
remain eligible to borrow from the IBRD until they are able
Food insecurity: In May 2022, the World Bank announced
to sustain long-term development programs without relying
plans to focus up to $30 bil ion in existing and new projects to
on Bank financing. China has over $3 billion in foreign
address the food security crisis. Projects are focusing on
exchange reserves and in 2016 created a new multilateral
agriculture, nutrition, social protection, water, and irrigation.
development bank (the Asian Infrastructure Investment
Bank). At what point, if any, should China graduate from
its eligibility for IBRD financial assistance?
U.S. Policy
Doing Business Report. In 2021, the World Bank
The United States has traditionally played a leadership role
suspended publication of its Doing Business Report (DBR),
at the World Bank. Within the U.S. government, the
after an independent investigation found that senior World
Department of the Treasury is the lead executive branch
Bank officials improperly influenced results, including to
agency managing U.S. participation in the World Bank.
improve China’s rating. The World Bank is formulating a
new approach, the “Business Enabling Environment
Congress also shapes U.S. policy at the World Bank.
.” How
Congress authorizes and appropriates U.S. financial
do its metrics, methodologies, and independence compare
commitments to the World Bank and, at times, has withheld
with the DBR?
funding unless certain reforms are completed. Congress has
Energy projects. U.S. policy on World Bank financing for
also passed legislation directing U.S. representatives at the
fossil fuels has shifted under recent Administrations, and
World Bank and other international financial institutions
legislation has been introduced in recent Congresses to
(IFIs) to advocate and vote for specific policies, as well as
support World Bank financing for coal and civil nuclear
legislation requiring reports from the Department of the
projects. What types of energy projects should the World
Treasury on World Bank and other IFI issues. In addition,
Bank finance?
presidential appointments for the U.S. representatives at the
U.S. leadership. How do vacancies in U.S. positions at the
World Bank (the governor, the executive director, and their
World Bank impact U.S. leadership?
alternates) require Senate confirmation.
For FY2024, the Administration has requested funding for
Rebecca M. Nelson, Specialist in International Trade and
the IBRD and IDA. For IBRD, the Administration
Finance
requested $233.3 million, primarily for the fifth of six
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The World Bank
IF11361
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https://crsreports.congress.gov | IF11361 · VERSION 10 · UPDATED