Another American World Bank President Is a Missed Opportunity

On CFR’s new Global Expert Roundup, I argue that the U.S. diplomatic push to install an American as the next World Bank president squandered a golden opportunity to promote a new era of global governance founded on contemporary economic realities, and not outdated Western prerogatives. The Obama administration could have thrown its weight behind either of the two outstanding alternatives--Ngozi Okonjo-Iweala of Nigeria or José Antonio Ocampo of Colombia--and in doing so, would have signaled that global institutional reform requires integrating the dynamic developing world. Nevertheless, the first multi-candidate competition is a historic turning point.

To be sure, the unbalanced and opaque competition fell short of the "open, transparent and merit-based" process the Bank promised in 2010. The United States called in its IOU for backing Christine Lagarde for IMF managing director--suggesting the gentleman’s agreement from 1944 survives--and applied heavy pressure on Japan and other shareholders. This naked display of power was consistent with the history of the Bretton Woods Institutions, which the United States, after all, insisted be based in Washington rather than a global financial center (even New York), to assure maximum susceptibility to its own political interests. Nevertheless, the days of hegemonic privilege are waning. In the next competition, all bets are off.

This time, good arguments can be (and were) made for all three candidates. Okonjo-Iweala, the Nigerian finance minister and World Bank insider, and Ocampo, the former Colombian finance minister and senior UN official, had impeccable macroeconomic credentials. But it is Kim--a physician and anthropologist--who was the wild card. While some lamented his lack of economic or banking expertise, his pioneering, iconoclastic work at Partners in Health and the WHO achieved impressive results. But his anthropological background may be most handy at the Bank, making him more attuned than professional economists to the context-dependent nature of development.

The incremental shift toward open competition for the Bank presidency is a positive development overall. But it carries some risk given historic U.S. ambivalence toward multilateral cooperation. As outgoing Bank president Robert Zoellick recently told a CFR audience, the United States needs to take responsibility for one part of the international system, in part to reassure the U.S. public and Congress it is in good hands. When a non-American takes the reins at the Bank, will the United States continue to support it politically and financially?

However, my colleagues around the world don’t necessarily agree. The roundup, which is a new monthly feature of the Council of Councils (CoC) initiative, gathers analysis from experts in Brazil, South Korea, and South Africa. View the entire debate, “Does Kim Signal World Bank Changes?” on CFR.org.