World Bank Stitch-Up to Continue

When it comes to cozy duopolists, any future friendliness between Thomson-Reuters

and Bloomberg pales next to the selfishness and nearsightedness of the G2 when

it comes to leading

the World Bank and the IMF. No sooner had Paul Wolfowitz

resigned than Hank Paulson was telling PBS that his replacement

would be chosen by the Americans, and it wasn’t long until the Germans chimed

in too:

German Chancellor Angela Merkel‘s spokesman today rejected

a suggestion by Finance Minister Peer Steinbrueck that the

U.S. should consider giving up its lock on the World Bank presidency.

"For the German government, it’s completely beyond all question that

the United States of America will continue to occupy the top job at the World

Bank and has the first choice," spokesman Thomas Steg said at a press

conference in Berlin today.

What’s fascinating to me is that no one seems to be spending any time drawing

the distinction between America nominating the next president, on the one hand,

and it nominating an American, on the other. For reasons I genuinely don’t understand,

it seems to be some kind of inviolable rule that if the US has the privilege

of choosing the next president, it will always choose an American citizen.

Never mind that the result of such idiocies is that you end up with people

like Jim Wolfensohn actually taking US citizenship for no other

reason than to become World Bank president. (Note to self: Ngozi

Okonjo-Iweala has lived in America since 1972, and her children are American;

could she do the same thing?) The bigger point is that it’s trivially true that

America’s best interests are not necessarily served by having an American in

the top job — even assuming that the White House is so selfless as to be trying

to serve its own best interests here, rather than those of the world’s poor.

Even if the Americans do show the imagination necessary to nominate a non-American,

however, the process remains fundamentally flawed. As dsquared notes in a comment

on this blog,

Going in for rushed and non-transparent selection was how we got into this

mess in the first place. Replacing Wolfowitz has to be used as the opportunity

to put in place a proper selection process. The WB can function without a

President for a short while, but it can’t go on without big changes to the

top job system. I would be much keener to see an interim appointment of one

of his deputies (or even a real steady-the-ship exercise, appointing someone

like Michel Camdessus pro tem) and taking the opportunity for some real sensible

long term thinking about how to fill these jobs (which would obviously have

to chuck the IMF top job into the pot too as it is only pure chance that this

broken system happened to have its first meltdown at the WB rather than IMF).

The only thing I’d add to that is that the IMF top job (managing director)

— which always goes to a European — is balanced out somewhat by the IMF number-two

job (first deputy managing director) who is in many ways more important, on

a day-to-day basis, and who is, naturally, an American.

I’m not at all sure what a proper selection process would look like, although

there’s no doubt that it would give great weight to the views of the developing

world. But I do know that just about any process would be better than what we

have now, which is no process at all.

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