Final answer:
The IMF aims to stabilize global monetary systems and provide loans to countries with financial crises, often with conditional policies. The World Bank focuses on global development, offering financial support and advice for sustainable economic growth in less developed countries. Both have faced criticism for imposing policies that can negatively impact the countries they serve.
Step-by-step explanation:
Purpose of the IMF & World Bank Group
The purpose of the IMF (International Monetary Fund) and the World Bank Group is to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world. The IMF's original role was to maintain the parity between the US dollar and other currencies, which was part of the Bretton Woods System, but it has since adapted to using its ability to loan money to influence and direct the economic policies of borrowing countries. Its purpose now includes avoiding or mitigating financial crises through conditionality. The World Bank Group, established under John Maynard Keynes's guidance, initially focused on rebuilding war-torn nations and promoting development in emerging countries. However, it shifted focus to global development and currently raises money on world financial markets to offer loans and advice meant to bolster the economies of less developed countries.
Both the IMF & World Bank Group have been instrumental in providing financial resources and advice to countries facing economic difficulties. The IMF acts as a lender of last resort for countries in dire economic situations, with loans conditional on implementing certain economic policies, while the World Bank focuses on long-term projects aimed at promoting sustainable economic growth and poverty reduction through investments in infrastructure, education, and other critical sectors.
Critics, however, have expressed concerns over the conditions imposed by these institutions, as stipulated by economist Joseph Stiglitz and others, arguing that they can sometimes exacerbate problems in the countries they mean to help by prioritizing the interests of foreign creditors and enforcing policies that may not be beneficial to the local populace.