ABSTRACT
The World Bank has taken a circuitous route from financing rich countries to financing poor countries. Established after World War II as the International Bank for Reconstruction and Development, its first main function was to lend funds for reconstruction in European countries. The philosophy of the World Bank in the 1960s remained rather conservative: development was largely synonymous with growth—growth that would be achieved by investing in sound projects. The World Bank began doing research on poverty and the distribution of income in the early 1970s. Research on the existing distribution of income in developing countries, by the World Bank as well as the development community generally, has identified certain groups containing the majority of poor people. The World Bank Group has been trying hard to improve the distribution of its own lending, so that IDA credits are made only to countries with per capita incomes under $200.
