Question 44 from UPSC CSE 2025 - Economics

Question

Consider the following statements in respect of the International Bank for Reconstruction and Development (IBRD):
I. It provides loans and guarantees to middleâincome countries.
II. It works single-handedly to help developing countries to reduce poverty.
III. It was established to help Europe rebuild after the World War II.
Which of the statements given above are correct?

IASCODEX · Accepted Answer

Correct Option: C. I and III only

Strategy: First, focus on statement I: lending and guarantees to middle‐income countries align with IBRD's established mandate, so I is correct. Statement II claims it works 'single-handedly', which is an extreme absolute; in reality, IBRD collaborates across the World Bank Group and with other partners—so II is incorrect. Statement III connects IBRD's origin to post-WWII European reconstruction, which is accurate. Therefore, the correct answer includes I and III only.

Key Info: The International Bank for Reconstruction and Development (IBRD) is one of the five institutions of the World Bank Group. Established in 1944 at Bretton Woods, its initial purpose was to facilitate reconstruction of European economies devastated by World War II. Over time, its role expanded to the development of middle‐income and creditworthy low-income countries. IBRD provides financial products such as loans, guarantees, risk management products, and advisory services. It does not work in isolation but forms part of a larger ecosystem alongside other World Bank Group entities—such as the International Development Association (IDA), International Finance Corporation (IFC), and others. The IBRD's funding comes primarily from global financial markets due to its AAA credit rating. Its primary focus areas now include poverty eradication, infrastructure, institutional capacity building, and private sector development. All projects and interventions are generally carried out through close partnership with governments, private entities, and other development organizations. IBRD is headquartered in Washington, D.C.

IASCODEX · Answer

Option A: I and II only

IASCODEX · Answer

Option B: II and III only

IASCODEX · Answer

Option D: I, II, and III