Two well written pieces have caught my eye recently, with different views about what makes a good World Bank president. First, former Venezuelan Minister and Bank executive director Moisés Naím lists what he believes are five misconceptions in the Financial Times:
1. The World Bank is a bank and thus its leader should be a banker. No! The Bank is more than a bank. It is a consulting company for developing countries, a multilateral organisation, an intensely political entity as well as a highly technical one. Its role as an international lending bank is declining relative to its advisory role.
2. Its leader needs to be a politician with access to the US President and a stellar Rolodex. No! Being chums with the president and other heavyweights of course helps. But just having access to power without also having a vision for the institution has been disastrous…
3. The candidate needs to be a development expert. No! Academics and development experts may be good at understanding the challenges and perhaps even recommending smart solutions. But unless they are proven, effective managers of complex, public-sector-like systems they will fail…
4. It’s a multilateral organisation and so the head needs to be a diplomat. No! An instinctive diplomacy is critical of course, but few diplomats are sufficiently versed in economics, public finance and the other technical fields on which the bank’s core competence rests.
5. The bank is a global institution and it needs the CEO of a large multinational corporation. No! The bank is indeed an international institution, but its natural habitat – and the skills needed to survive and thrive in it – are closer to those found in a well-run public sector than in the private sector.
Meanwhile, a comment on a previous post of mine is extremely well informed and interesting – whoever you are Ross, please blog some more!
The reality is that the role of World Bank President is a cross between CEO of a Fortune 500 Company (The World Bank would rank about 350) and President of a medium size country with special global responsibilities in support of economic growth.
Of the last five World Bank Presidents: Conable was too much of a Politician (especially a US politician); Preston was too much of a Wall Street banker; Wolfowitz was Wolfowitz (too much of an ideologue along with allowing personal issues to drive that ideology); and Zoellick was essentially a civil servant. McNamara and Wolfensohn are the only two who have combined the roles reasonably effectively – though like most people they had their respective faults.
The World Bank is NOT USAID or DfID or any other bilateral aid agency or charity. It is NOT a humanitarian or emergency relief agency. It is NOT Bank of America or Citibank or Credit Suisse. It is NOT the Federal Reserve or the bank of England or the European Central Bank. It has a unique role and a unique business model that complements all of these. By borrowing money cheaply and lending money cheaply and then plowing “profits” back into grants and support to the poorest countries, this potentially allows for structured economic growth in support of all the other developmental and humanitarian interventions. Does it get it right all the time – NO. Does it staff screw up sometimes – YES. Do it need more clarity around its real role and a prune back from “mission creep” – most certainly. I will comment on reform issues below.
The World Bank needs a CEO with political acumen – in short a PRESIDENT.
As my previous posts have said, I don’t really agree with either of these positions, but I do think that if we don’t get a full slate of candidates – including non-US candidates – and a proper open selection process, we’re unlikely to get the kind of open merit-based process that’s necessary to sort the good from the bad.