Courtesy Reuters
Foreign Affairs From The Anthology: From the Archives: International Institutions
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The Lesson of the World Bank

THE International Bank for Reconstruction and Development, popularly known as the World Bank, is about to celebrate the third anniversary of the commencement of its operations. Those three years have been fascinating and exciting ones, crowded with problems as unique and complex as they have been pressing. Solutions have not been and are not yet easy to find; the state of knowledge about the whole business of international investment is still remarkably incomplete. By now, however, some of our experiences and some of the lessons we have learned seem worth recording.

Deceptive and unfortunate ideas of grandeur are quite naturally evoked in many minds by the designation "World Bank." I fear that in many quarters those ideas of grandeur led to expectations of rapid and spectacular achievement and to consequent disillusionment when the spectacular failed to materialize. Solid, gradual growth and development make poor news copy and thus escape public attention, but they are not for that reason to be deprecated. The fact is that, slowly but quite perceptibly, the Bank has gained general acceptance of its credit in the public markets and a reputation for objectivity, fair dealing and competence in the councils of its member states. The loans which it has granted, totalling some $650,000,000 as of the end of April 1949, have been for essential and well-conceived programs or projects which should materially strengthen the economies of the borrowing countries. Its advice and encouragement to various of its members have led to the adoption of economic and financial measures and administrative reforms which may well prove to be at least equally as beneficial as the Bank's financial help. The Bank's bonds have had a very satisfactory market record; as a result of legislative or administrative action in 37 states, the bonds are now eligible investments for almost all institutional investors in the United States and there is at present a substantial unsatisfied demand for the bonds. The Bank's earnings record has been good and has enabled a promising start to be

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