Don’t send Summers to the World Bank

By Felix Salmon
January 18, 2012

Please, Barack, don’t do it! Hans Nichols is reporting today that Larry Summers wants to be the next head of the World Bank — no surprise there — and that Barack Obama is thinking of nominating him. It’s a dreadful idea.

For one thing, Summers wouldn’t actually be very good at the job, since he doesn’t have any of the required qualifications.

The only way to be an effective World Bank president is to be an effective diplomat. Like all CEOs, the head of the Bank reports to a board of directors — but at the World Bank, the board of directors meets twice a week. And they’re not friendly hand-picked board members, either — they’re political appointees who fight their geographical corners, who live full-time in Washington, and who work full-time out of offices within the Bank itself. If you want to get anything done at the Bank, you need to persuade the board to leave you alone and not micromanage every decision you make.

You also need to be an almost superhuman manager. The World Bank has more than 10,000 employees from over 160 countries, with offices in more than 100 countries around the world. The range of cultural expectations they bring to their jobs is truly enormous, and the amount of political jostling and mutual incomprehension which results is entirely predictable. In order to manage this rabble, you need a very high level of cultural and interpersonal sensitivity.

And then there’s leadership: “the vision thing”, as Geoge HW Bush would put it, and the ability to get your organization to line up behind how you think the Bank — and, for that matter, the World — should work. Summers is not known for his work on global poverty reduction, and his previous tenure at the World Bank is remembered mainly for the pollution memo — an “ironic” proposal to increase pollution in poor countries, which resulted in the label “perfectly logical but totally insane” being attached to Summers for many years thereafter.

Summers, of course, lives in a world of ideas and debate — a world in which, it must be said, he invariably and loudly considers his own opinion to be correct. If he became president of the World Bank, it’s only reasonable to expect Cornel West-syle fiascos on a regular basis — with a concomitant steady erosion of the amount of faith the board has in the president.

And even Summers himself is the first to admit that he’s no diplomat: he prides himself on speaking the truth as he sees it. Which is fine if you’re making millions of dollars advising DE Shaw on their investments. But it’s not going to help you run the World Bank — or run anything larger than the Treasury Department, really. Even Harvard was too much for him to run; giving him the World Bank job would be a disaster.

On top of that, giving the job to any American is a bad idea. We’re long past the point at which it makes any sense at all that the president of the World Bank should always be an American, and I was quite heartened, back in 2009, when a trial balloon was floated suggesting that Obama might appoint Lula, or Manmohan Singh, to the job. My own favored candidate would be Ngozi Okonjo-Iweala — she should ideally have got the job back in 2007, but better late than never. And accepting it would give her a gracious way of departing her current gig, which doesn’t seem to be going so well.

Obama is the most multilateral president the US has ever had, and as such it makes perfect sense for him to show a bit of modesty with respect to the World Bank. An American has run it since 1946; it’s about time some other nationality got a chance. (And yes, Jim Wolfensohn counts as an American.) If Obama must appoint an American, it should probably be a Clinton — either Hillary or Bill, with Hillary being the much more likely of the two. But ideally he shouldn’t nominate an American at all. And if he does, it certainly shouldn’t be Summers.


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“his previous tenure at the World Bank is remembered mainly for the pollution memo”

I’ll bash Summers with the best of them, but blaming him for Lant Pritchett’s memo is beyond the pale. (If you want to be accurate, you could rephrase to “Summers’s last stint at the World Bank is not memorable for anything he accomplished or attempted.”)

Posted by klhoughton | Report as abusive

A-MEN! No Larry Summers. He’s like a Gyro Sandwich – - keeps coming back long after the time you enjoyed him is over.

Whether it’s the pollution memo, the Harvard Harassment, etc., etc., let him go gently into the good night.

I like the idea of Hillary! or B Clinton, but I love Hillary! in her current job, and B makes too much dough (and other psychic income) just palling around like he does.

Dark Horse Candidate that should but never will get it: Eliot Spitzer! A Breath of Fresh air, and, he’s very familiar with that area of DC.

Posted by sagreer70 | Report as abusive


Liked Felix Salmon’s article on Suze Orman. Hoping for brief interview by Friday 1/20/12 regarding prepaid debit cards.

My bagpipe is from Glasgow. Does that count for anything?

Posted by reuchner | Report as abusive

His Harvard job surely exposed his weaknesses, didn’t it?

Posted by GRRR | Report as abusive

Larry Summers should never have been an integral part of the Obama Administration from the get go much less be considered for an appointment to the World Bank in any capacity.

Posted by Strych09 | Report as abusive

Can you imagine the Republican reaction to Obama naming someone other than an American? BALLISTIC!!!!!! They’ll call it the ultimate example of his disdain for “American Exceptionalism” ….. his “otherness”. Epic red meat

Posted by JimInPanama | Report as abusive

Has someone started a petition to keep this from happening yet? I don’t know the whole skinny on summers, but he seems to be a self obsessed academic who doesn’t play well with others.

Posted by junkwaffle | Report as abusive

I’d agree with Felix’s sentiment here – assuming the runner-up candidate isn’t Jeff Sachs. I’ll take Fat Larry any day over Sachs, who is simply unbearable, as well as one of the 10 most overrated public intellectuals of our era.

Posted by ErikD | Report as abusive

From now on the US’ nominee is no longer guaranteed to be appointed by the World Bank’s Board to the post of World Bank President. The 187 members of the World Bank and IMF revoked the 66 year old Gentlemen’s Agreement for the US to nominate the President of the World Bank in April, 2010. 42510.htm This is because Robert Zoellick has abused his authority and broken the securities laws. On September 15, 2007 I informed Senator Evan Bayh, “[t]he ongoing cover-up is an indictment of the probity of US oversight at the Bank and I would encourage the Senate to request GAO to look into it.” On April 17, 2008 Senators Lugar, Bayh and Leahy requested GAO to investigat­e “internal resistance to increased transparen­cy and accountabi­lity at the World Bank.” On November 4, 2008 Congressma­n Chris Van Hollen informed me that he noted “that my claims and concerns have already been provided to the GAO…. and to the relevant congressio­nal committees­”. In March 2009 GAO stated that it could not commence the inquiry “because of challenges we recently faced in gaining access to World Bank officials.­” (see p. 24) doc/55285.pdf Senator Lugar asked about the delay in the GAO review during hearings on the IBRD capital increase anking-on-reform-capital-increase-propos als-from-the-multilateral-development-ba nks On January 9, 2012 I asked the Internatio­nal Organizati­on of Supreme Audit Institutio­ns to bring the World Bank into compliance­.

Posted by KarenHudes | Report as abusive

This is true as far as it goes, but there is the assumption that an effective WB president who gets things done is actually a desirable thing. Usually when the institutions like the WB or the IMF actually do anything, it’s with the intent of looting third world nations to profit the oligarchy. (And how many times has Summers already had a hand in this?)

Posted by Moopheus | Report as abusive

The last WB President I had any respect for was James Wolfenson, an Aussie-American

Larry Summers is the worst possible choice Obama could make, Clinton is the second worse choice Obama could make

Give the job to George Mitchell if he wants it, otherwise another Aussie – Peter Costello, a thoroughly decent man and a proven manager of other peoples money – trouble is he’s linked to the wrong party, he’s Burkeian Conservative.

Posted by RightPaddock | Report as abusive

Having criticized your last post on greek debt default and CDS triggering it’s only fair I note that you are absolutely correct here. Larry Summers might well be the worst possible choice to head the World Bank.

One minor quibble. Summers didn’t get paid millions of dollars to speak his mind at D.E. Shaw. Nobody in the financial world gets paid that kind of money to speak their mind. They get paid to tell their bosses what they want to hear. Summers, like his old boss Bob Rubin, was no exception to this rule,

Posted by chris9059 | Report as abusive

Are they serious? If that is the case you might as well consider their latest “Global Economic Prospects” report the last resemblanc­e of reality to ever come from the organizati­on (not that the IMF or World Bank are known for living in the real world). I was actually surprised that their most recent report actually had shades of reality in it! With Larry Summers in charge you can be sure not even “shades” of reality would be accepted!

http://www­.wallstree­­2012  /01/wo­rld-bank-i­ssues-worl­d-rare- rea­lity.html

Posted by WallStRanter | Report as abusive

Larry Summers does not deserve this.

Posted by emm305 | Report as abusive

Why not Joe Stiglitz?

Posted by kittylynn | Report as abusive

continuously i used to read smaller posts which also clear their motive, and that is also happening with this paragraph which I am reading at this time.

Posted by traducator romana daneza | Report as abusive