Don’t send Easterly to the World Bank

By Felix Salmon
March 5, 2012
Bill Easterly has a wonderful riff at Foreign Policy today, entitled "How I Would Not Lead the World Bank".

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Bill Easterly has a wonderful riff at Foreign Policy today, entitled “How I Would Not Lead the World Bank”. He urges us all not to pick him as the next World Bank president, and concludes that he wouldn’t even hire himself. And he gives lots of reasons why he’d be rather bad at the job, all of which, in a kind of indirect way, actually help to bolster my idea that Indra Nooyi would be perfect for it.

I would not lead the World Bank by assembling an expert task force of my fellow social scientists, natural scientists, and random unemployed politicians. I would not ask such a well-qualified expert task force to answer the question “What must we do to end world poverty?” — especially if we forget to answer the question “Who put us in charge?”

I would not lead the World Bank to ever use the words “civil society.” I would not emulate my deservedly respected non-predecessor as World Bank president by giving a speech on the Arab Spring without using the word “democracy,” even in a purely descriptive sense. I could not possibly attain a remarkable record of five years of speeches without ever using the word d_m_cr_cy at all.

I would not appoint U.S.-educated elites vetted by their autocratic home governments to represent the underrepresented peoples of the world. I would not negotiate the contents of World Bank reports with governments in either the West or the Rest, except possibly for correcting typos.

I would not lead the World Bank by perpetuating the technocratic illusion that development is something “we” do to “them.” I would not ignore the rights of “them.” If the New York Times should happen to report on the front page that a World Bank-financed project torched the homes and crops of Ugandan farmers, I would not stonewall the investigation for the next 165 days, 4 hours, 37 minutes, and 20 seconds up to now.

The point here is that the president of the World Bank is hamstrung in all manner of ways, both obvious and non-. There’s a reason why Bob Zoellick has never used the word “democracy” in a speech — and that reason is Article IV, Section 10 of the Bank’s Articles of Agreement. “The Bank and its officers shall not interfere in the political affairs of any member,” it says; “nor shall they be influenced in their decisions by the political character of the member or members concerned.”

The political structure of the bank is similarly responsible for the fact that substantially everything the president says, even more than the president’s subordinates, is vetted by the political appointees on the Bank’s board. The World Bank is owned and run by sovereign governments, who will talk until they’re blue in the face about how they’re working for the world’s poorest, but who ultimately are not going to sign on to anything which they don’t perceive as being in their own best interest.

As a result, what’s needed at the World Bank is someone who knows development, but who isn’t deeply invested in their own normative ideas of what must be done. Running the Bank involves a delicate dance with extremely important and powerful shareholders who can effectively shut you down at any time. As Moisés Naím says, “In this case you have to know how to get a large, culturally heterogeneous, technically sophisticated and, at times, recalcitrant bureaucracy to move in the direction you set.”

Naím does a very good job of laying out who the US should not nominate, but is weaker when it comes to who it should be:

Mr Obama should look for a professional who already knows this field, its ideas, players and traps, who has a vision for the World Bank rooted in practical experience with development and who has already run successfully a global organisation.

He does say that picking the CEO of a large multinational corporation is not necessarily a good idea, on the grounds that “the skills needed to survive and thrive” in the Bank “are closer to those found in a well-run public sector than in the private sector”. But the fact is that if you’re looking for an American who has successfully run a global organisation in the public sector, you’re going to end up with a very short list of possible candidates. Americans don’t run big multilateral organizations: the World Bank is the exception to that rule. And maybe Unicef.

Pepsico is big enough — with more than 285,000 employees spread across pretty much every country of the world — that it resembles to some degree the sprawling bureaucracy of the World Bank. At the same time, Nooyi is blandly corporate enough that she’d be able to build a strategy around the art of the possible, rather than around her preconceived notions of how development can and must work. She has demonstrated that she knows development; she’s well versed in the art of diplomacy; and she’s clearly capable of running a large global organization. She’s not the only possible candidate; I for one would love to see Nancy Birdsall nominated. But Easterly’s piece shows how nominating any kind of ideologue is almost certain to end in tears.

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