ABSTRACT
The World Bank, officially the International Bank for Reconstruction and Development, was established along with the International Monetary Fund as part of the reordering of the global economic system in the aftermath of World War II. The problem of the Bank, ineffectual at promoting self-sustaining growth but effective at causing environmental and social harm, can be understood only if one comprehends the actual causes of underdevelopment and overindebtedness. Although many factors, such as First World protectionism and recessions, have contributed to the Third World's economic problems, the lack of a real return on the $1.7 trillion in foreign funds is the reason that borrowers have been left not only poor, but also heavily in debt. This poor economic result also demonstrates that the Bank's lending strategy has been seriously flawed, reflecting a: substitution of welfare for development, uncritical acceptance of statist development theories, preference for state enterprises over private companies, and focus on projects in disregard of borrowers' economic policies.
