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Obama Has Made a Mess of the World Bank Succession

By on March 28, 2012

Barack Obama’s decision to nominate Dartmouth College President Jim Yong Kim to head theWorld Bank has been well received.

The prevailing view is that Kim is a smart solution to a tricky little problem: How to maintain a strong U.S. role in the bank while bowing to the growing economic might of developing nations such as China.

I don’t think so.

First and foremost, the appointment of Kim, a U.S. citizen, would perpetuate the indefensible custom by which an American heads the World Bank and a European runs the International Monetary Fund. Until Kim’s name was put forward, there was wide agreement that the job calls for a highly qualified non- American. The strength of sentiment against the traditional stitch-up is what made the nomination to succeed Robert Zoellick, who steps down from the bank this summer, more awkward for the White House than usual.

The unstated position of those who praise the choice seems to be that Kim isn’t entirely American, that his Asian name makes him the next best thing to a foreigner. How clever: The White House gets to appoint both an American, thus preserving its feudal privilege, and a non-American, thus being an enlightened world citizen. The core of this reasoning is the dumbest kind of racism. So far as I know, the U.S. has just one class of citizenship. Kim is an American.

Let’s remind ourselves, as we apparently need to, why the current arrangement is wrong. The World Bank and the IMF are the pre-eminent institutions of global economic governance. The recent worldwide contraction suggests that their role should be enlarged, not diminished. Both outfits are called on to advise or require governments to be better run, to attack corruption and the power of special interests, to uphold the highest standards of propriety.

It is odd, then, that the U.S. and Europe — with their diminishing weight in the global economy — reserve the right to grant the top jobs in those institutions to their own nationals, according to any criteria they think fit, including bestowing rewards on old friends. This spoils system extends to lower layers, tainting the entire leadership structure in both agencies. Europe and the U.S. then add insult to injury by prating about their commitment to “open, merit-based competition” in appointments. It’s a gross abuse, one that Europe and the U.S. would never tolerate were they on the receiving end.

Granted, it is vital to appoint an outstanding candidate. This does in fact trump all other considerations. Even more than the IMF, the World Bank will have to change its ways. Today’s fast-growing middle-income countries can access the capital markets directly. It’s widely acknowledged that in the future the institution should be less a bank and more a repository of knowledge about what works in development. Supervising this transition is a management challenge of the highest order.

If the U.S. had nominated someone superbly qualified, that ought to weigh heavily in the balance — even if it would preserve the spoils system, and even though it wrongly implies that no other country could furnish as strong a candidate.

Is Kim superbly qualified? He’s a doctor and anthropologist, a health-policy specialist, a former leader of the World Health Organization’s HIV-AIDS program. That experience would be valuable at the bank, but it’s a narrow area of expertise. Kim has no credentials in development economics or finance, which must remain the bank’s core competencies.

Also, it’s disturbing — to me at least — that his record includes co-editorship of a 2000 volumepointedly titled “Dying for Growth,” an attack on markets, capitalism, globalization and the policies of the bank and the IMF trenchant enough to win praise from Noam Chomsky and a respectful review in the Review of Radical Political Economics.

At the top of the bank I expect that Kim would soon learn, if he hasn’t already, that market-driven economic growth is the only basis for lasting success against poverty and the disease and environmental degradation that go with it. Growth might not be a sufficient condition for social progress, but it’s certainly a necessary one (notwithstanding Cuba, where “Dying for Growth” finds much to admire). Nobody who questions this should be running the World Bank.

One of the other candidates in contention for the job is Ngozi Okonjo-Iweala. She’s a two-time minister of finance in Nigeria, where by all accounts she acquitted herself with distinction. She has also worked as a senior manager at the bank, so she knows what needs mending. You could argue she’s too much of an insider to be radical — in advance, who knows? But on paper, at least, her qualifications are far better than Kim’s.

Look at it this way: If the two could swap passports, would anybody in the White House be making the case for Kim?

The White House should have supported Okonjo-Iweala, and would have been widely praised for doing so. Now that the U.S. has put forward its nominee, the betting is that it will get its way. Europe, keen to preserve its standing in the spoils system, is unlikely to object. One can only hope that the rest of the world complains so loudly that next time things will be different, and an American president will finally bring this ridiculous tradition to an end.

(Clive Crook is a Bloomberg View columnist. The opinions expressed are his own.)


One Comment

  1. Dede

    March 28, 2012 at 10:58 pm

    Obama is playing the ethnicty politics.