World Bank needs change

Opinion: April 20, 2012 at 12:00a.m.

By M.G. QUIBRIA

Baltimore Sun

Few people on the street may be familiar with the World Bank. Yet, it plays a critical role in the U.S. effort to engage the world through its contribution to economic development in poor and post-conflict societies.

As current World Bank President Robert Zoellick steps down this summer, the bank will soon have a new leader. In the past, as per an unwritten convention, the U.S. — the largest single majority shareholder of the bank — got to select the president.

Although the bank at its core is a development institution, it was, surprisingly, never led by a development professional. Past presidents included individuals with strong ties with the White House whose professional credentials had little to do with development — such as law, investment banking, finance, politics and even newspaper publication.

This time, the customary process of selecting the president has been challenged both within the United States and from abroad. Columbia University Professor Jeffrey Sachs started a campaign for choosing a development professional as the head of the World Bank and floated himself as a candidate. Given that Mr. Sachs was an “outsider” candidate, he had little chance of success. He, nevertheless, intensified the pressure on the Obama administration to shun the traditional methodology of selecting the president, based more on political patronage than merit. Externally, developing countries also fielded their own candidates for the first time, thereby challenging the monopoly of the U.S.

Increased competition

Overall, this increased competition has augured well for the bank, as it has attracted a field of strong candidates.

There are three contenders. The U.S. candidate is Jim Yong Kim, the current president of Dartmouth College. Mr. Kim, a Korean-American who is a medical doctor and an anthropologist, previously worked at Harvard Medical School as a public health professor. A winner of a MacArthur “genius” award, Mr. Kim has extensive hands-on experience in delivering health care to the poor in developing countries such as Haiti, Rwanda and Peru. He directed the World Health Organization’s effort to treat HIV/AIDS and is the co-founder of the Boston-based nongovernmental organization Partners in Health, which does commendable public health work in many developing countries.

The other two candidates are the Nigerian finance minister, Ngozi Okonjo-Iweala, and a former Colombian finance minister, Jose Antonio Ocampo. Both are trained economists, with, respectively, a Ph.D. in urban studies and planning from MIT and a Ph.D. in economics from Yale. Ms. Okonjo-Iweala alternated between the World Bank, where she rose to the position of managing director, and her native country, where she is on her second stint as the finance minister. Mr. Ocampo, on the other hand, has worked mostly with the United Nations, where he was an under-secretary general for economic and social affairs and an executive secretary of the Economic Commission for Latin America and the Caribbean. In Colombia, he held ministerial positions in finance, planning and agriculture. Currently, Mr. Ocampo is a professor of professional practice at the school of international and public affairs in Columbia University.

This is, no doubt, an impressive crop of candidates — but not necessarily a perfect one. Though Mr. Kim is an inspirational candidate, his experience in public health is deep but narrow. Mr. Kim has no economic policymaking experience, and many orthodox economic commentators have found fault with his perspectives on economic growth and ways to achieve it. He was less than ebullient about growth in his book, “Dying for Growth.” He also holds a heterodox but sensible perspective that “every country must follow its own path to growth.”

Policy credentials

Ms. Okonjo-Iweala has strong policy credentials. In her first term as finance minister, she successfully negotiated Nigeria’s debt with international financial institutions, receiving rave reviews. However, Ms. Okonjo-Iweala is an orthodox economist who seldom deviates from the traditional playbook. In recent months, her performance as finance minister has been controversial. In a nation where oil wealth is not widely shared, her policy of sudden removal of fuel subsidies plunged the economy into a nose dive and led to widespread political unrest.

As a minister in Colombia, Mr. Ocampo won some accolades from the U.S. administration for his collaboration in its money-laundering effort. However, the country’s budget deficit soared on his watch as finance minister. While he is a seasoned bureaucrat, Mr. Ocampo introduced few imaginative initiatives during his tenure at the U.N.

The flaws of these candidates aside, what represents an unambiguous advance over the past is the current selection process, which is more open and transparent — an important reform for so critical a global institution.

M.G. Quibria is a professor of development economics at Morgan State University. He wrote this for the Baltimore Sun. Distributed by MCT Information Services.