Could the US pull out of the World Bank? Unlikely — but not impossible

Following the Trump administration’s unprecedented freeze on U.S. foreign assistance and the recent executive order calling for a review of all international intergovernmental organizations, whispers have begun to circulate about the possibility of the United States either diluting its share in the World Bank or pulling out entirely. Experts told Devex that this is highly unlikely and there have been no official statements indicating that this is going to happen. The Trump administration could also take less radical steps and opt to cut contributions, seek to exert more control, or use its power and influence to reform the institution. The U.S. is the largest shareholder in the World Bank — holding a 17.5% share. The next largest shareholder is Japan, which holds 7.3%. This not only gives the U.S. significant influence, but it also gives it veto power, which is only held by countries that have more than a 15% share. A withdrawal or dilution would not be in the best interest of the U.S., legal and development experts say. However, Project 2025, a 900-page conservative manifesto published by The Heritage Foundation in 2023, encourages the U.S. Treasury to “force reforms and new policies” in the World Bank and International Monetary Fund. It also recommends that the U.S. withdraw and “terminate its financial contribution.” Trump distanced himself from the initiative on the campaign trail, but has already fulfilled several of the recommendations listed in his first three weeks as president. Trump also issued an executive order on Feb. 4 calling for a review of U.S. investment in international institutions. These two facts, combined with the obliteration of the U.S. Agency for International Development over the last two weeks, have spurred discussion about how, exactly, a withdrawal or dilution would work. What we do know is that Article VI of the International Bank for Reconstruction and Development’s Articles of Agreement clearly states that a country can withdraw. What we don’t know is whether congressional approval is needed. “The term unprecedented is a good one,” said Clemence Landers, vice president and senior policy fellow at the Center for Global Development. “It’s so unclear the extent to which Congress needs to be involved in this or not. That’s the game-changing thing.” Can the US withdraw? The World Bank says yes Article VI stipulates that any country can withdraw from the bank by transmitting a notice in writing to the bank at its principal office in Washington, D.C. “Withdrawal shall become effective on the date such notice is received,” the article says. The withdrawing country — the U.S. in this hypothetical situation — would be liable for any obligations it made to the bank prior to giving notice. The bank will then “arrange the repurchase” of the U.S. shares, according to the article. The U.S. can receive its funds back six months after the withdrawal letter is submitted. “Withdrawal is, as a process on the international level, easy,” said Jan Klabbers, a renowned legal expert on treaties and international organizations. “According to the Bank's constitution, one simply notifies the Bank, and the withdrawal takes immediate effect.” Landers said that there would be an appetite for U.S. shares. “The U.S. could sell those shares and China could pick up the lion's share of those,” she said. “It will be a huge, enormous gift to other countries.” From the sale of those shares, the U.S. would receive its paid-in capital back. The U.S. has contributed $3.7 billion in paid-in capital to the World Bank since IBRD was created in 1944. The U.S. has also pledged $52.9 billion in callable capital, which is funding the U.S. would have only paid under certain conditions, such as protecting the bank from default. It is a commitment and backstop that would also be canceled as part of a withdrawal. The World Bank’s International Development Association, or IDA, its fund for the poorest countries, which raises contributions roughly every three years, could also be severely impacted. The latest IDA replenishment was at the end of 2024. The U.S. pledged $4 billion, the largest pledge out of all participating countries, but that amount has not yet been approved by Congress. It is unclear whether that pledge will be honored — Trump reduced an IDA contribution from the pledged amount the last time around without pulling out of the World Bank — but if the U.S. were to withdraw from the bank, it is unlikely it would be. But is congressional approval required? Withdrawal in the first place is highly unlikely, experts say. Congressional approval is even less likely. “If Congress has to approve this, there’s no chance this could happen,” said Landers. “If Congress has to approve it, all of this speculation is not worth it.” Landers, as well as legal experts, say that a withdrawal such as this one is unprecedented, making it more difficult to determine the procedures required. “Neither the Constitution’s text nor its structure definitively answers the question whether the president has an inherent unilateral power to terminate treaties and executive agreements to which the United States is a party,” said Sean Murphy, a professor of international law and U.S. foreign relations law at George Washington University. Murphy pointed to the 1979 Supreme Court case, Goldwater v. Carter, about whether then-President Jimmy Carter’s unilateral termination of a bilateral mutual defense treaty with Taiwan should have been approved by Congress. The court ultimately “vacated” the ruling, which effectively means that they nullified it. Some had procedural issues while others said that it wasn’t something the judiciary should rule on — it should be left to the president and Congress. In other words, the only case that could have provided precedent didn’t really set a precedent. Daniel Bradlow, a professor and senior research fellow at the University of Pretoria, said that the government could make the case that because the Articles of Agreement lays out a plan for withdrawal — and Congress agreed to that treaty when it was ratified — the government does not need to regain Congress’s approval in order to withdraw. But he added that Democrats are likely to argue that it’s not that simple. International financial agreements often involve Congress, especially when they impact U.S. financial obligations. Congress also controls and appropriates these funds. Critics could also argue that because the treaty was initially ratified by Congress, Congress would need to approve a repeal. “Logic would suggest that since treaties like the Articles of Agreement require approval from the Senate, the same would apply to withdrawing from such treaties,” said Klabbers. The U.S. does withdraw from treaties, so this can be done, said Bradlow. But, he added, “it’s still unclear what the division of responsibility is. It’s hard to know for sure that if Trump said we're pulling out tomorrow, and we're demanding our money back now, that that would actually be the end of it.” In addition to the U.S. losing its place as the most influential player at the World Bank, a withdrawal would move the center of power for international development. The World Bank treaty states that the offices of the bank must be in the country that contributes the most. Experts say that if the U.S. were to withdraw, the headquarters could shift and thousands of people could lose their right to work. It is also likely to hurt the bank itself. Three top agencies, Moody’s, S&P, and Fitch, have recently warned that the World Bank’s triple-A rating would be at risk if Trump were to withdraw support. The bank’s triple-A rating allows it to do what it does: borrow money at extremely low interest rates, which it then lends to low- and middle-income countries at more favorable terms. If they were to get downgraded, the cost of borrowing would go up and the cost of loans would follow. “This would fly in the face of U.S. interests,” said Landers. “And it seems so against the ‘America First’ agenda.” Update, Feb. 19, 2025: This article has been updated to reflect Daniel Bradlow’s current affiliation.