Distinguishing Bretton Woods Twin Brothers

Like two drops of water is how people tend to think of the World Bank (WB) and the Internationally
Monetary Fund (IMF) since nowadays the news present similar critiques for both of them but, it is unknown for
common civilians what the difference is among them and tend to think that they are the same organization.
The WB and The IMF are the two pillars of the financial system, understanding the role of each of them is very
important, this essay will explain how the twin organizations born in Bretton Woods in 1944 are different in
three ways: purpose, source of funding and recipient of funding.
The first difference between the two institutions is their purpose. The WB, which is constituted by the
International Bank for Reconstruction and Development and the International Development Association, aims
to reduce poverty and to improve the living standards of the people in low and middle-income countries;
whereas The IMF, according to its Constitution, is responsible for promoting international monetary
cooperation, facilitating the expansion and balanced growth of international trade, assisting in the
establishment of a multilateral system of transactions between members, and giving confidence to members
by making the general resources of the Fund temporarily available to them to correct maladjustments in their
balance of payments. Both, the WB and IMF aim different goals, one seeks to help in the development of poor
countries and the other one, overseas the financial system attempting to prevent or correct crisis.

The second difference is the sources of funding. The WB is an investment bank, its owners are the 180
members in an equality share of the institution, the IBRD obtains its funds by market borrowing through bonds
and the IDA obtains them via donations; In contrast, the IMF resources come from quota subscriptions, or
membership fees, paid in by the IMF's 182 member countries and under special and highly restrictive
circumstances the IMF borrows from official entities. In other words the IMF and WB acquire their financial
resources from their members but under different conditions.
The third difference is the recipients of funding. Within the WB, the IBRD finances countries whose per capita
gross national product (GNP) exceeds $1,305, and the IDA finances countries whose per capita GNP is below
$1,305 but in the practice it helps countries with an annual per capita income below $865. Whereas all IMFs
members, that are having difficulties to balance their payments, can access the Funds resources whichever
they per capita income may be. The difference among who the recipients are, in the case of the WB is settled
by the per capita GNP, whereas the IMF only restricts its aids to the payment balance difficulties.
Robert Brault once said You can spend too much time wondering which of identical twins is the more alike
Even though the IMF and WB are the two pillars institutions that sustain the international financial system, the
differences among them are perceptible in their objectives, beneficiaries and contributors; on the one hand the
WB aims to help poor countries to achieve a better quality of life for its people obtaining its resources from
Bonds of its members, on the other hand the IMF works towards a healthy financial system of its members who
through proportional quotas keep it running. Understanding the difference between the WB and the IMF is
important but keep in mind that they are complementary institutions