Countries were working with the compromise developed by John Maynard Keynes and Dexter White in 1944, where the international stability of a gold-dollar standard was established and they managed their currencies against it. According to Frieden (2006), countries would join the IMF and submitted their gold as well as their own currency to the common fund and link their currencies to the gold at a fixed price. In hard times the IMF would lend to countries and have their currency revalued against the gold standard Frieden, J.A. 2006).The IMF and the World Bank are institutions in the United Nations that were set up to share the same goal of raising the living standards of countries of the world, according to World Bank IMF Fact Sheet (2011).Jointly both institutions were to establish a framework for economic cooperation and development that would lead to a more stable and prosperous global economy, but they faced many challenges to achieve this objective.A look at the performance of both organization in regard to reducing debt burdens will reveal according to World Bank.org, that they were required to work together to reduce the external debt burdens of the 4most heavily indebted poor countries of the worlds.The Heavily Indebted Poor Countries (HIPC) started in 1996 and was enhanced in 1999 with a comprehensive review by the IDA and the IMF with assistance from international business consultants. Since that time it has been able to reduce the debts of the poor countries downwards (World Bank, 2011).This has enabled a large group of countries to become qualified for high volumes of debt relief. Additionally, a number of creditors had started to provide early and timely assistance to those countries that are qualified, in the form of interim relief at certain decision stage (World Bank, 2011).
The Performance of the IMF and The World Bank since the Demise of the Bretton Woods Agreement