Opinion

Felix Salmon

The ideal nominee for World Bank president

By Felix Salmon
March 22, 2012

Now things are getting interesting. Lesley Wroughton has the wonderful news: two very highly qualified non-American candidates — Ngozi Okonjo-Iweala and  Jose Antonio Ocampo — are going to be nominated to be president of the World Bank. This really puts the pressure on the White House to knock it out of the park with their nomination, because Ngozi, in particular, is broadly regarded both within and outside the Bank as being pretty much perfect for the job. She’s a whip-smart economist, she’s honest, she’s imaginative, she’s dedicated, she’s expert at navigating the Bank’s labyrinthine bureaucracy and politics, and she’s passionate about the way that the Bank can really make the world a better place.

In 2008, I “interviewed” Ngozi for Portfolio magazine. Which means that I went down to Washington and got escorted in to her office. She then arrived, I asked her one short question, she gave me a fluent and wonderful 2,000-word answer while barely pausing for breath, and then she left for a meeting with Bob Zoellick.

It’s been five years since I first said that Ngozi would make an excellent World Bank president, and this nomination is long overdue. What’s more, she will have a lot of support within the World Bank’s board — the body which ultimately will make the decision as to whom to choose.

Of course, the board members do what they’re told to do by the bank’s shareholders — the world’s countries. And if the Europeans and the Americans all vote for the US candidate, then the US candidate will win. That’s the simple truth. But here’s the thing: everybody on the board pays at least a modicum of lip service to the idea that the job will go to the best candidate. When Christine Lagarde took over at the IMF, she got the job because she was European, and the European candidate always gets the job. But at the same time, everybody voting for her could say with a straight face that she was, in fact, the best candidate as well.

Now that Ngozi’s in the running, the US is going to find it incredibly difficult to nominate a relatively low-profile person like Susan Rice, because it’s almost impossible to make a credible case that Rice is a superior candidate to Ngozi on the merits. And other big names seem to be falling away:

U.S. Senator John Kerry and PepsiCo’s Indian-born CEO Indra Nooyi also made an Obama administration shortlist, according to a source, although Kerry has publicly ruled out the job and Nooyi is no longer in contention, according to another source.

This is really bad news, because by a process of elimination it more or less forces Obama to go with Larry Summers. Larry would be a dreadful nominee, and a worse president, in a job whose primary prerequisite is diplomacy. And before he’s even nominated, there’s already a website up, ForgetLarry.org, devoted to campaigning against him for the job. It covers pretty much all the bases, although it weirdly misses the Russia/Shleifer scandal: for that, check out Cathy O’Neil’s post from a couple of weeks ago.

I’ve talked to a fair number of people about this position, including a few who are quite sympathetic to Larry, and not one of them thinks that he would be good in the post. If the US forced the world to choose between Larry and Ngozi, it would have to expend an astonishing amount of diplomatic capital to twist the requisite number of arms to get him the job, just because no one would actually want to vote for him. Their hearts would be with Ngozi.

Remember that Larry has never held elective office: it’s pretty much inconceivable he ever could. And yet, in its own way, the president of the World Bank is indeed an elected office. The electorate is tiny and extremely elite, to be sure. But the board is still going to want to meet with him, and he’s going to give them his insincere I’m-just-humoring-you-because-I’m-smarter-than-you smile, and even the Europeans are going to start wondering whether they really have to give Larry the job, just because they want to retain their own grip on the IMF.

It’s entirely conceivable, in fact, that an anti-Larry faction might vote instead for Jeff Sachs, who has already been formally nominated by some very small countries, on the grounds that convention holds that the president of the World Bank has to be an American, rather than that it has to be the US nominee. Up until now, the US nominee has always been the only American nominee: this is the first time that isn’t the case. Which means that we might yet see Larry and Jeff split the status-quo votes, allowing unstoppable momentum to gather behind Ngozi.

So here’s one clever idea: Joe Stiglitz and Stan Fischer should throw their hats in the ring as well; I think that both of them would be able to find a country willing to nominate them. There would then be no fewer than four American nominees for the Bank’s board to choose from. Stiglitz is on the record saying that the most qualified candidate is likely to come from a developing country; his candidacy would be a way of providing the greatest possible range of candidates for anybody who feels like they have to vote for an American candidate but who doesn’t want to vote for Larry.

More realistically, Obama is going to have to come up with a real knock-out of a nominee, someone who would waltz into the job no matter who she was up against. Which is to say, Obama is going to have to nominate Hillary. Hillary has, we’re credibly told, ruled herself out for the job. Well, she might have to change her mind.

If Hillary is nominated, the job is hers: it’s as simple as that. And she would be very good at it, too. She wouldn’t even need to serve out a full term. While she had the job, she might even be able to engineer a way in which she could be succeeded by Ngozi, or some other highly-qualified candidate without a US passport. Which alone would make her one of the most important and revolutionary presidents in the Bank’s history.

Hillary is 64 years old — easily young enough to have one more big job before she retires. Does she want the job? Probably not. But she’d be great at it anyway. And she might have to accept the nomination, if only to ensure what she will be certainly working behind the scenes to achieve in any case — US continuity at the Bank at least through the 2012 elections. After that, I’m sure she can find a way to ease herself out if she really wants.

Comments
13 comments so far | RSS Comments RSS

The coolest way to play it would be to nominate Larry (pleasing his cronies) and have him be voted down by the Board – pleasing me and everyone else in the world with a functioning brain.

I’m no fan of the WB, but imposing Larry on them is cruel and unusual ….

Posted by MrRFox | Report as abusive
 

The ideal candidate is actually Goh Chok Tong, former PM of Singapore. GCT is one of the smartest guys around, and he has a record of success at economic and national development – second to none.

His problems would be a) he’s Chinese and b) he’s a plain speaking man, and c) at 70 he’s probably considered too old.

Posted by RightPaddock | Report as abusive
 

The really good news would be the shut down of this totally useless organization.

Posted by alea | Report as abusive
 

alea, damn u beat me to it

Posted by Danny_Black | Report as abusive
 

I might have missed it from a previous post by Felix – but what should be the agenda of the ideal WB president, according to Felix? And in what way would Ngozi be ideally suited for THAT agenda? I’m really curious.

Posted by Abulili | Report as abusive
 

There’s too much corruption in developing countries so a good candidate from that sector who could clean it up could be good; on the other hand, you run the risk of promoting one of the sympathisers of that cockeyed status quo.

Whoever the person eventually in post, I hope they lose this counter-developmental requirement for aid to depend on children paying for their education, a rule insisted on by the US decades ago the results of which have been less education and more turmoil in Africa. It could also be argued it results in more child labour, lower literacy, and has given an opening to Africa for the Chinese way of doing things.

Education is the way forward, ignorance and ideology are backward looking and should be rejected out of hand.

Posted by FifthDecade | Report as abusive
 

Fifth Decade, I have huge respect for your comments, but this one left me puzzling: “There’s too much corruption in developing countries so a good candidate from that sector who could clean it up could be good”. What makes you think a WB president, from a developing country or otherwise, “could clean it up”? Do we have any solid evidence of corruption fighting measures not entirely driven from a domestic constituency being successful, much less those insisted upon by a development agency? Especially given the board of this particular development agency?

Posted by Abulili | Report as abusive
 

Felix,

If Ngozi is such a great candidate, why can’t the US simply agree on a non-American like her and call it a day? They get a solid President, win kudos for not pushing the issue for reasons of vanity, and everyone goes home happy.’

Honest question – it doesn’t seem like something you contemplate in the above.

Posted by worm600 | Report as abusive
 

Felix,
Insightful piece, and I strongly believe Jeffrey Sachs is the best fit for the post. He has made invaluable contributions at the international level (through the UN, WB, Global Fund), and I can think of no one who will add more to the World Bank as a convener and visionary. I hope he receives the US nomination.

Posted by SamVaghar | Report as abusive
 

A 2000 word answer to a simple question? Sounds like she talks too much.

Posted by Bernanke | Report as abusive
 

Alea and Danny_Black above: +1

Posted by crocodilechuck | Report as abusive
 

@ Abulili OK, you got me, I was being slightly mischievous here! It would be good if 3rd world corruption could be cleaned up, and certainly the influence the World Bank has had over the last 30 years on insisting loans are tied to charging for education has made a significant contribution to how ignorant many of the world’s poor are today, so by the same logic, maybe getting someone in from the 3rd world as boss of the WB to fight corruption might end up actually having the opposite effect too.

I was basically disagreeing with Felix… but it was rather subtle, I admit.

Posted by FifthDecade | Report as abusive
 

FifthDecade, that clarifies, thanks. I would suggest that while education is indeed paramount, “the way forward” in eliminating corruption, as you suggest, is not just education, but a firm grounding in ethics. That is arguably even harder to achieve, but may be driven locally and rely less on foreign tutoring, which should restrict itself to technical assistance if certain conditions (in terms of accountability and cooperation) are met.

Posted by Abulili | Report as abusive
 

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