History The Bretton Woods institutions were set-up in 1944 after the 2 nd World War. The 2 nd World War saw massive economic and infrastructural damage to Europe. To help Europe recover from this difficult situation, the Bretton Woods institutions were created. These institutions basically consisted of two major bodies the IMF and World Bank and had the strong arm of the American economy behind their creation Another reason fortheir creation was that it was also recognized after the Great Depression of the late 20’s that if one major national economy was suffering it would hurt the global economy in general. World Bank/International Bank of Reconstruction and Development The World Bank as it is known now was created as the International Bank of Reconstruction and Development. The major purpose of this institution was to help finance the development of infrastructural projects like dams, roads and highways amongst others. This was very important for Europe after all the damage caused by the war. However as time passed by and Europe recovered it no longer had need of such massive investment in infrastructural projects from external sources. Therefore around the 60’s and 70’s the focus of the World Bank(it changed it name to reflect this new trend in its development) came upon the developing world. These countries were generally products of a colonial past and had constant financial and economic problems. Even now however the World Bank retained the focus that it had acquired as far as assistance went. The World Bank financed huge projects such as dams, roads and buildings. The World Bank also provided an opportunity to America and most of the European world( who financed the World Bank) to acquire influence over the developing world to serve as a deterrent from them following the communist path that Russia was following. Basically it became an important tool in the cold war between America and Russia. It was mostly under Robert McNamara in the 1970’s that the World Bank grew in size and during the debt crisis of the 1980’s the World Bank’s role became even more key to the developing world( East Asian Crisis.) The Western world was able to acquire considerable influence over these developing countries, because they were times when the World Bank was lending loans which were nearly worth 50% of the country’s GDP. On top of all that these programs came with a series of regulations which were known as the SAP (Structural Adjustment Program). These included regulations on trade liberalization to privatization amongst others and as discussed earlier were mostly capitalist in orientation. The World Bank is still playing a dominating role in financing of projects for developing nations. For example World Bank is still financing a number of large projects in Afghanistan. The question however arises how beneficial the role of the World Bank has been in improving the lives of most individuals in developing nations. This report will discuss that later on combining this discussion with a discussion on the IMF-International Monetary Fund The basic objectives of the IMF include the promotion of international money cooperation, facilitating international trade and maintaining exchange rate