On the Blogs: Lack of Good Governance at the World Bank

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The process of selecting a new World Bank president has started. Pundits are already criticizing the process for being rushed, closed, and favoring the re-selection of the current President Jim Kim. This serves as a reminder of how political the international financial institutions are, although they often present themselves as being technical and apolitcal.

Last week’s announcement that The World Bank’s presidential selection process has started stirred up controversy, as the selection process doesn’t seem to be open, transparent, and merit-based. Ironically, this institution that preaches good governance abroad, does not live up to basic good governance standards, such as transparency and merit-based appointments, at home. The selection of Jim Kim in 2012 was in keeping with the gentlemen’s agreement that an American leads the World Bank and a European leads the IMF, although the institutions claim to have moved on from this seemingly outdated agreement to a merit-based selection process.

Although the Bank’s Executive Directors allegedly expressed “unanimous support for an open, merit-based and transparent selection,” they gave member countries only three weeks to submit their candidates – with a deadline of September 14th. Commentators have rightly pointed out the absurdity of this short deadline, as Kim’s term does not end until June next year. As the Head of the World Bank Staff Association Daniel Sellen put it: “It takes us six months to hire a junior economist. Why are we taking just a month to hire a president?”

Although the nomination period is similar to that of the IMF earlier this year (Christine Lagarde was the sole candidate), there’s speculation that the process has been accelerated in order to ensure the re-selection of Jim Kim before the next President of the United States take office – in case the President is Donald Trump, who might not automatically pick Jim Kim.

The World Bank Staff Association has even written an open letter to the Executive Directors of the Board of the Bank, calling for an open process for selecting the World Bank President and an end to backroom deals. There is really no good reason that this process should not be open to candidates across the world, as reappointments are uncommon at The World Bank (only two of twelve presidents have been reappointed, namely Robert McNamara and James Wolfensohn).

Although the Bank itself claims the selection of Jim Kim in 2012 was open, transparent and merit-based, inside sources at the Bank report of overwhelming support for Ngozi Okonjo-Iweala, former Minister of Nigeria, and political tactics by the US to secure an American candidate. According to Lant Pritchett, US officials at the time argued that Obama could not afford to either “lose” or “give away” a traditionally American position at the time, but that ‘next time’ the selection process could be more open.

There has been much discussion on the blogs already and the open World Bank President blog maintained by the Bretton Woods Project has been revitalized. Here’s a selection of blog entries:

The more things change… We’re back (September 1st 2016, worldbankpresident.org). Coordinator of the Bretton Woods Project, Luiz Vieira, picks up where this blog left off in 2012. Looks like this blog won’t be used for actual debate on the relative merits of various candidates from around the world this time around either, but instead much-needed critique of the selection process.

3 week application period – are you kidding? (September 1st 2016, worldbankpresident.org). Director of Eurodad, Jesse Griffiths, points out that apparently Eurodad’s selection of interns is more rigorous than the selection of the head of the World Bank.

Five Women Who Could Lead the World Bank (Center for Global Development, August 30th 2016). Lant Pritchett points out that The World Bank has yet to be led by a woman. He suggests a few women who he considers to be qualified candidates to lead the Bank.

Donald Trump won’t choose the next World Bank president (DEVEX August 25th 2016) Interesting reporting by Michael Igoe with several inside sources. The World Bank reacted very negatively to this article (scroll to the bottom to see their comments).

Excuse Me, World Bank, This Time Is Last Time’s Next Time (Center for Global Development, August 17th 2016). Lant Pritchett points out that there is no reason for this selection process to not be open, merit-based, and transparent. Although Obama may not have been able to afford to give away a traditionally American position at the time, US officials had argued that next time the process could be more open and transparent. This time is that next time.

Pieces from the last round that resurfaced:

How I Would Not Lead the World Bank (Foreign Affairs March 5, 2012). Funny article by Bill Easterly expressing his gratitude for not being nominated to lead the World Bank because of how fundamentally he disagrees with its purpose and practice. 

Does It Matter Who Runs the World Bank? (Center for Global Development, February 15th 2012). This post by Nancy Birdsall at CGD, resurfaced this week as pundits were discussing whether this position is actually of much significance. She points out that the World Bank management actually has a lot of power in the Bank.

Photo: Regardless of your opinion on Jim Kim’s merits as the leader of the World Bank, I think we can all agree he’s a pretty fantastic karaoke singer (Kim enters the stage at 2.00).

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