UPSC CSE Prelims
World Bank and its Initiatives Previous Year Questions (PYQs)

Detailed Explanation:

Correct Answer: ✅ Option 3 (I and III only)

The International Bank for Reconstruction and Development is the largest institution of the World Bank Group. It was originally established to support post-war reconstruction and now focuses on development financing.

✅ Statement I is Correct: IBRD provides loans, guarantees, risk-management products, and advisory services primarily to middle-income and creditworthy lower-income countries.

❌ Statement II is Incorrect: IBRD does not work alone to reduce poverty. It works along with other World Bank Group institutions such as:

• International Development Association> (IDA)

• International Finance Corporation> (IFC)

• Multilateral Investment Guarantee Agency> (MIGA)

✅ Statement III is Correct: IBRD was established in 1944 at the Bretton Woods Conference to help rebuild Europe after World War II.

Short Notes: International Bank for Reconstruction and Development (IBRD)

• IBRD was established in 1944 under the Bretton Woods system.

• It is a key institution of the World Bank Group.

• Headquarters: Washington, D.C..

• Provides loans and guarantees to middle-income and creditworthy countries.

• Funds development projects in infrastructure, education, health, and governance.

• Raises funds mainly through international capital markets.

• Its original objective was the reconstruction of Europe after World War II.

Detailed Explanation:

Answer: Option 1 — Maintenance of law and order

The World Bank's Ease of Doing Business Index (discontinued in 2021) measured regulatory efficiency through 10 specific sub-indices that quantified business regulations. Maintenance of law and order, while essential for economic activity, was not one of these measurable indicators. The index focused on specific procedural aspects like paying taxes, registering property, and dealing with construction permits—all of which were official sub-indices.

📝 Short Notes: Ease of Doing Business Index

• Nature: Annual ranking by World Bank measuring business regulation quality and enforcement across 190 economies (discontinued in 2021)
• 10 Sub-Indices: (1) Starting a Business, (2) Dealing with Construction Permits, (3) Getting Electricity, (4) Registering Property, (5) Getting Credit, (6) Protecting Minority Investors, (7) Paying Taxes, (8) Trading Across Borders, (9) Enforcing Contracts, (10) Resolving Insolvency
• Methodology: Each indicator measured specific procedures, time, cost, and legal requirements businesses face
• India's Performance: India improved from 142nd rank (2014) to 63rd rank (2020) through reforms like GST, IBC, and digital initiatives
• Discontinuation: World Bank discontinued the index in 2021 following data irregularities and methodology concerns

Detailed Explanation:

Answer: Option 2 — World Bank collaboration that facilitates the preparation and structuring of complex infrastructure Public-Private Partnerships PPPs to enable mobilization of the private sector and institutional investor capital.

The Global Infrastructure Facility (GIF) is a partnership led by the World Bank Group that brings together governments, multilateral development banks, private sector investors, and financiers to design and structure bankable infrastructure projects. It specifically focuses on facilitating complex infrastructure Public-Private Partnerships (PPPs) in emerging markets and developing economies to mobilize private sector and institutional investor capital. The GIF provides technical advisory support and works to ensure that infrastructure projects are properly structured to attract private investment, making Option 2 the correct answer.

Detailed Explanation:

Answer: Option 3 — World Bank

The Ease of Doing Business Index was published by the World Bank. This index ranked countries based on the regulatory environment for business operations, measuring factors such as starting a business, getting electricity, registering property, getting credit, paying taxes, trading across borders, enforcing contracts, and resolving insolvency. The index aimed to encourage countries to implement business-friendly reforms. However, the World Bank discontinued this index in September 2021 following investigations that revealed data irregularities and ethical concerns in the 2018 and 2020 reports.

Detailed Explanation:

The World Bank publishes the Global Economic Prospects (GEP) report twice a year (January and June).

The report examines global economic developments and provides growth forecasts for emerging market and developing economies (EMDEs).