What it is:
The World Bank is an international financial institution dedicated to reducing poverty around the world through capital investment and the facilitation of trade.
How it works (Example):
Based in Washington, D.C., the World Bank is funded and managed by several member countries, with the United States providing the majority of funding and holding the highest percentage of voting power.
The World Bank disburses funds to undeveloped and developing countries to foster agricultural development, literacy programs and post-war reconstruction. These funds also support a wide range of infrastructure programs that include the construction of ports, highways, water purification systems and power plants. For the poorest of the world's countries, the bank's assistance plans are based on poverty reduction strategies that are closely tailored to that country's particular needs.
As with other international organizations involved in economic policy, the World Bank employs a large staff of economists and analysts who scrutinize all regions of the world to assist the bank in creating suitable aid programs for worthy recipients. This independent, unbiased research provides foreign investors with a roadmap as to which countries provide the basis for stable and promising investments.
Why it Matters:
The World Bank's assessments can serve as a leading indicator of the direction in which foreign economies are heading. The World Bank’s policies and programs can also indicate which countries are likely to experience an upward trajectory and become a favorable climate for investment, due to the stimulatory nature of the bank's capital investments.