Financial Times Editorial: The World Bank after Wolfowitz
Financial Times Editorial: The World Bank after Wolfowitz
Copyright The Financial Times Limited 2007
Published: May 18 2007 21:56 | Last updated: May 18 2007 21:56
The departure of Paul Wolfowitz is a sad moment. It was necessary, indeed inevitable, once revelations about his role in securing a generous settlement for his girlfriend emerged. But it is sad both personally and for the institution. It is now necessary to learn lessons and look forward. The World Bank will never be the same again. Indeed, it must not be the same again.
Perhaps the most important lesson is that foisting a boss on the bank who has the backing of just one person, even if the latter is the most powerful in the world, does not give him enough legitimacy to run the institution effectively. That was evident even before the scandal showed that the incumbent held no credit in the bank of global support.
It is evident to almost everybody that the old stitch-up, which gave the World Bank to an American and the International Monetary Fund to a European, is no longer workable. Ideally, the heads of both organisations would be selected by the respective boards (themselves, ideally, much reformed) from a global pool of qualified candidates. There are many such people with the requisite expertise and competence. It should be remembered, too, that the pressing need is for a leader who can always find a manager.
If, in the aftermath of this emergency, such a shift proves impossible, the least that can be asked is that the US puts up several candidates, not all of whom need (indeed should) be Americans. That would give the board the possibility of selecting a new president after examining their credentials and their proposals for the future.
This brings us to the second big lesson of the affair. The turmoil has rightly raised big questions about the future of this huge public sector bureaucracy in a world so different from that of a decade ago, let alone of six decades ago when it was founded. The bank’s role as a financial intermediary is much less relevant and its role as a unique source of knowledge far less compelling than ever before.
The right question to ask is what public goods should such institutions – including the regional development banks – provide in today’s world. Finance and technical assistance to the world’s poorest countries are a part of the answer. So are finance of cross-border infrastructure and research, support for public-private partnerships, provision of information and analysis and a push for better governance.
The bank needs a more legitimate boss and a new sense of purpose. The challenge is large. But if the institution is to survive this sad episode, it must be met. Business as usual is not a tolerable alternative.
Copyright The Financial Times Limited 2007
Published: May 18 2007 21:56 | Last updated: May 18 2007 21:56
The departure of Paul Wolfowitz is a sad moment. It was necessary, indeed inevitable, once revelations about his role in securing a generous settlement for his girlfriend emerged. But it is sad both personally and for the institution. It is now necessary to learn lessons and look forward. The World Bank will never be the same again. Indeed, it must not be the same again.
Perhaps the most important lesson is that foisting a boss on the bank who has the backing of just one person, even if the latter is the most powerful in the world, does not give him enough legitimacy to run the institution effectively. That was evident even before the scandal showed that the incumbent held no credit in the bank of global support.
It is evident to almost everybody that the old stitch-up, which gave the World Bank to an American and the International Monetary Fund to a European, is no longer workable. Ideally, the heads of both organisations would be selected by the respective boards (themselves, ideally, much reformed) from a global pool of qualified candidates. There are many such people with the requisite expertise and competence. It should be remembered, too, that the pressing need is for a leader who can always find a manager.
If, in the aftermath of this emergency, such a shift proves impossible, the least that can be asked is that the US puts up several candidates, not all of whom need (indeed should) be Americans. That would give the board the possibility of selecting a new president after examining their credentials and their proposals for the future.
This brings us to the second big lesson of the affair. The turmoil has rightly raised big questions about the future of this huge public sector bureaucracy in a world so different from that of a decade ago, let alone of six decades ago when it was founded. The bank’s role as a financial intermediary is much less relevant and its role as a unique source of knowledge far less compelling than ever before.
The right question to ask is what public goods should such institutions – including the regional development banks – provide in today’s world. Finance and technical assistance to the world’s poorest countries are a part of the answer. So are finance of cross-border infrastructure and research, support for public-private partnerships, provision of information and analysis and a push for better governance.
The bank needs a more legitimate boss and a new sense of purpose. The challenge is large. But if the institution is to survive this sad episode, it must be met. Business as usual is not a tolerable alternative.
posted by Carlos T Mock @ 7:30 AM
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