The World Bank was set up to streamline national borrowing in international financial markets. Countries wishing to borrow money from private financial institutions could get a cheaper interest rate if they borrowed through the World Bank – largely because the shareholders [nations putting capital into the Bank] of the World Bank acted as co-signers and guarantors for the loan.

The World Bank actually has five components. One lends to middle income and credit-worthy countries. Another arm, the International Development Association, hands out extremely low-interest loans to the poorest countries. Another arm encourages foreign investment in the third world by basically insuring investors against loss caused by "non-commercial" risk (political unrest, nationalization, etc). The International Finance Corporation finances private sector developments and provides technical expertise. And, finally, the Bank has a sector providing arbitration of investment disputes.

Control of the World Bank rests with the G8. Although there were originally 44 nations who were members of the World Bank, voting is based upon a one-dollar-one-vote principle rather than the normal one-country-one vote principle. Between them, the G8 hold roughly 43 % of World Bank voting shares – the U.S.A. alone holds 16.41%. Any change to the mandate or structure of the World Bank take a supermajority of 85%, thereby giving the U.S. a veto by itself.

The World Bank has lent billions of dollars to developing nations – and has generally shaped public spending in those counties depending upon the current "vision" of the American government. From ecologically disastrous mega-projects of the 1960’s (eg: the Aswan High Dam in Egypt) to the transformation of developing nation’s agriculture industries from domestic food crops to export crops in the 1970’s, the World Bank was instrumental in creating the kind of world that the American state and American corporations wanted. Unfortunately, the World Bank shaping of development goals was seldom beneficial for the borrowing nations’ economic development.

Ultimately, debtor nations reached the point where they could not finance their accumulated debt load. By the early 1980’s a debt crisis arose in the developing world that continues to this day. The World Bank has attempted to "solve" this crisis by imposing Structural Adjustment Programmes (SAPs) on debtor nations.

Typically, SAPs have ordered governments to privatize public industries – including water and other utilities and health care. Government spending cuts are demanded – especially in areas of public services and social welfare. Trade liberalization and easing of restrictions on capital, reduced corporate taxes and higher interest rates are also typical of the SAPs.

The International Confederation of Free Trade Unions (ICFTU) has been highly critical of the Structural Adjustment Programmes, observing that "all that was achieved was the preservation of a veneer of debt repayment that benefited a handful of the world’s most profitable commercial banks."

Former World Bank Chief Economist Joseph Stiglitz flatly states that the most successful developing nations are those which did not follow World Bank recommendations – and that those nations which did comply have not done particularly well. A recent study by the Inter-American Development Bank found that the liberalization of financial markets demanded by the World Bank has increased poverty and social inequality in Latin America.