International Development Financing

Report Outline
Development Financing for Poor Nations
Growth of International Finance Agencies
Global Responsibilities for Development

Development Financing for Poor Nations

The quarter-century since the end of World War II has seen the rise of a complex and powerful network of international development finance agencies. From modest beginnings as a part of the effort to rebuild the war-shattered economies of Western Europe and Japan, these multinational finance institutions have expanded their mandates and entered upon the work of accelerating development throughout the two-thirds of the world that is underdeveloped. Through a process of quiet but unrelenting evolution, the international organizations have become giants, controlling billions of dollars in hard and soft currencies and wielding considerable economic and political influence in both developed and underdeveloped countries.

Today the financial institutions of the international development community are lending more than $2 billion a year. Since the beginning of the 1960s—the First United Nations Development Decade—their yearly lending volume has nearly tripled. They currently employ more than 15,000 international technocrats whose decisions are of life-and-death importance to scores of newly independent and emerging nations around the globe.

The Nixon administration has implicitly affirmed United States support of the concept and operations of this far-flung financial complex. In calling recently for a fresh approach to foreign aid, the President urged the United States to channel more of its assistance in ways that would encourage other advanced nations to share more equitably the burden of international development. “No single government, no matter how wealthy or well-intentioned,” he said in a message to Congress on May 28, 1969, “can by itself hope to cope with the challenge of raising the standard of living of two-thirds of the world's people.”