Financing

• Needless to say, the first function of banks of whatever type in the development of national economies is to provide financing. Start-up funds are provided for businesses that are deemed worthy by the banking infrastructure, and loans are disbursed. The basic assumption is that developing states lack access to liquidity at reasonable rates, and the banks seek to provide the funds necessary to begin basic development projects such as small businesses, water detoxification and other infrastructure.
  
  

Monitoring

• Once a set of projects are put in motion, the financing institution then will monitor the progress of the firm, including the use of funds, the decisions of the board and it will even place its own agents in key positions in terms of board structure. One of the controversies of the role of banks' international development is the extent to which they should control the operations they have financed. There is a constant flow of data both to and from the fledgling institution concerning the plan for the industry, all to be approved by the bank beforehand. The bank, in other words, makes key decisions at all levels of development.
  
  

Coordination

• One of the central elements of regional or global development banking is the concept of coordination. This means the bank does not finance one project at a time, but will seek to implement a comprehensive plan in order to economically develop the entire society--politics and social life included. For example, the African Development Bank seeks a pan-African approach to credit, infrastructure and access to clean water, rather than worrying about a single project at a time.
  
  

Public Policy

• The most controversial element of this sort of banking is the extent to which banks, at whatever level, demand certain substantial and fundamental reforms for the public sector before any money is disbursed. Often, larger institutions such as the World Bank will demand control over a country's money supply, its welfare policies and its public spending in general as conditions for disbursing a loan or continuing to finance projects. States in the developing world have claimed that the World Bank's behavior has been little less than totalitarian and national sovereignty and independence are regularly violated.
  
  

Track Record

• Institutions such as the Independent Institute have condemned the nature of international banking, pronouncing the entire experiment a failure. Many groups such as the Independent Institute have garnered an impressive list of the major failures in the World Bank and other bank failures from Yugoslavia to Russia to Korea. They have accused the banking establishment of excessive secrecy, fostering public unrest, slashing needed public services and creating an oligarchy of well-connected native rich leaders out of touch with the public. The International Monetary Fund itself, on the other hand, has defended its record in reducing poverty.