The International Monetary Fund (IMF) and World Bank (WB) are sister organisations, set up after World War II to promote economic stability and development throughout the world.
As they are responsible for lending huge sums of money to nations who are in financial difficulties, the IMF/WB have considerable power in how those nations proceed with reforms. In the past few decades both organisations, and the IMF in particular, have come under heavy criticism for advocating, some would say imposing, harsh reforms which have resulted in increased hardship and poverty.
The IMF responds by saying that they are only called in when nations are in trouble, suggesting that some type of reform is needed. The “battlefield medicine” which the IMF administers may not be perfect but it is better than continuing with the policies which got the developing nation into trouble in the first place.
While this has a degree of truth to it, there are many well-respected economists who admit the IMF have sometimes got it wrong. Under international pressure the IMF has started to encourage developing nations to produce their own Poverty Reduction Strategy Papers, in the hope that future reforms will be led by national governments rather than the Fund. This move is a welcome step in the right direction but an entire culture change will be required within the IMF if it is to be effective.