World Bank and Keynesian Economics

Article Information
Journal: Business and Economics Research Journal
Title of Article: World Bank and Keynesian Economics
Author(s): Betul Sari Aksakal
Volume: 10
Number: 1
Year: 2019
Page: 77-94
ISSN: 2619-9491
DOI Number: 10.20409/berj.2019.156
The World Bank is an international development and financial institution, which was founded with the name of International Reconstruction and Development Bank and based within the United Nations, offers customized resources, development prescriptions, consultancies and loans to countries in various parts of the world. The largest part of the World Bank group is the World Bank which is the largest organization working on private sector initiatives and projects in developing countries; providing technical assistance and development proposals to businesses and governments. The adopted development approaches of this organization and its policy prescriptions to countries have evolved parallel to the periodic charecteristics of capitalism and the change in the economic theory corresponding to these periods since its foundation. It is possible to state that, roughly in the first 30 years, the Keynesian economic policies has affected development discourse and policies of the Bank. However, in the mid-1970s the Keynesian impulse went into reverse and replaced by neoliberalism under the effects of Vietnam War and the OPEC oil price shocks. After that, neoliberalism was on the stage until the 2008 financial crisis started in America and brought the whole world under its impact. This crisis has led the bank to change rhetoric and adopt Keynesian development policies. The main objective of this study sheds light on what Keynesian economics is, its main aims Keynesian development period of the World Bank and its reflections on Bank’s development policies.

Keywords: World Bank, Keynesianism, Economic Development, Development Policies, Import Substitution Industrialisation

JEL Classification: O19, F63 Full Text