What role do international organizations play in the effort to reduce poverty in the poorest countries in the world?
International organizations are formal institutions whose members are states. The power of the government and its member-states within the organization are outlined in a formal charter or treaty. Although governments are free to join voluntarily, assuming membership means agreeing to abide by the rules of the charter. International organizations also facilitate cooperation between countries. IGOs, NGOs, and MNCs are all international organizations that work together to reduce poverty and create economic stability in developing countries. The purpose and structure of an IGO are stated in its charter or treaty. The IMF and World Bank are examples of IGOs. Both the IMF and World Bank were founded by interstate treaties (Articles of Agreement) and share a common origin and organizational features. In short, the IMF provides short-term loans in the event of financial crisis, while the World Bank gives long-term loans for reconstruction and development projects. Hurd explains “The World Bank and IMF are both designed to help avoid the situation in which the economic problems of one country lead to a generalized crisis in the international system. Both institutions are therefore built on the recognition that extreme poverty and extreme financial instability are potentially contagious and that they have negative externalities that are easier to remedy earlier in their development rather than later…”(Hurd 88). The IMF is designed to oversee the international monetary system, provide advisement for countries on the maintenance of stable exchange rates, and provide emergency lending to its members in the threat of financial and social instability. The World Bank was designed to pool resources and lend money to its members as well, but its objective is more explicitly mandated to finance reconstruction and...
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