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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