The WB was created by the Bretton Woods Conference and evolved by adding additional institutions as additional tasks were identified. The initial objective of the WB was to provide loans for the rebuilding of Europe after WWII, later lending is provided to developing countries to foster development. Membership in the IMF is a prerequisite to be member of the WB and the source of the funds it provides are membership subscription quotas, international capital market borrowing (bonds), repayment of loans and retained earnings.

The institutions that form the WB group today are: 1. IBRD (International Bank for Reconstruction and Development), 2. EDI (Economic Development Institute), 3. IFC (International Finance Corporation), 4. IDA (International Development Association), 5. MIGA (Multilateral Investment Guarantee Agency) and 6. ICSID (International Center for Settlement of Investment Disputes).

The IBRD was created in 1946 for two purposes: the reconstruction of Europe after WWII and for investment in the developing world. The initial priority (reconstruction of Europe), ends in 1955 and all lending to Europe ends in 1967 and doesn’t resume until 1989 with assistance to Central and eastern Europe. Investment in the developing world is done by lending for projects unable to attract private financing, neoliberal philosophy is followed to decide what is considered economic development. The IBRD is the largest source of development assistance.

The IBRD is an official or sovereign lender and operates as a bank, not an aid-giving agency, It is very conservatively managed and it has a very profitable operation. Before extending a loan, a very rigorous economic and financial analysis of the proposed project is done so that a targeted ROI of 10% is met. The actual average ROI of the IBRD is about 20% although nearly 2 out of each 5 projects fails the 10% ROI. One of the concerns for the IBRD is that the average ROI is falling. THE IBRD has outstanding loans totaling more than 104 billion dollars.

The Economic Development Institute was established in 1955 to train government officials from the developing world in economic and financial management. The EDI promotes neoliberal economic perspective and development philosophies , The EDI is known as the Bank’s college and was initially set up with financial support form the Ford and Rockefeller Foundations.

The International Finance Corporation was established in 1956 as an affiliate of the bank with an authorized capital of $100 million. It is a separate legal entity with its own staff, membership and resources. Raises about 80% of its funds from international capital markets and receives balance in the form of transfers from the IBRD, This institution loans only to the private sector in developing countries and plays the role of a catalyst for more investment from other sources. Lending from the IFC has been expanding rapidly in recent years in part to the opening of Eastern Europe.

The International Development Association was established in 1960 to assist the world’s poorest countries. It has separate membership, but not separate organization like the IFC. It has no dedicated staff or resources so it is considered a "lending window" of the IBRD. This institution makes soft loans to countries with per capital income of less than $805. It has outstanding loans of $455bn and most of the funds are provided by wealthy members subscriptions, no money is obtained in capital markets.

The Multilateral Investment Guarantee Agency was established in 1988 to promote foreign investors in the developing world by insuring them against political risk. This institution will guarantee up to 90% of the invested amount up to a maximum of $90 million.

The International Center for Settlement of Investment Disputes was established in 1966 and provides arbitration services in investment disputes which arise between foreign investors and host country governments. It provides advice to developing countries governments on the drafting of foreign investment laws and regulations.

All of the World Bank’s projects go through an established cycle: 1. Identification, 2. Preliminary Study, 3. Project Implementation, 4. Training, Start Up and Supervision and 4. Evaluation. This is done to make sure that all aspects before, during and after aid is given, are well analyzed so errors can be kept to the minimum.

Three phases in WB lending philosophy have been identified:

The first one is called "Project Lending". This philosophy began in 1946 and ended in 1968. During this time, emphasis on building economic