Beyond Wolfowitz: merit and leadership at the World Bank
April 24, 2007
by ROY CULPEPER and FRASER REILLY-KING
The Globe and Mail
The World Bank’s executive directors still have yet to make a decision on the future of president Paul Wolfowitz. Having placed high stakes on tackling corruption and improving governance in developing countries, Mr. Wolfowitz’s favouritism toward a former girlfriend and bank employee shows that he is unwilling to practice what he preaches to the developing world. It would be best for him to step down if the institution is to maintain its credibility and reputation.
But the bank’s credibility and moral authority does not hinge on this decision alone; it turns on its ability to see beyond today’s crisis and embrace more far reaching reforms for tomorrow. If Mr. Wolfowitz resigns, first among these needed reforms is a selection process for the bank’s next chief executive officer — one that is transparent, democratic and merit-based.
If it is to remain credible, the selection of the next World Bank president should be open to candidates from all its member countries, and the process must be transparent and fair.
Two years ago, people around the world found U.S. President George W. Bush’s decision to make Mr. Wolfowitz the next World Bank chief incomprehensible. As former deputy defence secretary and a principal architect of the Iraq war, Mr. Wolfowitz seemed to have few of the desirable credentials for heading the world’s leading development agency.
But the appointment followed the tradition established in 1945 at the Washington-based international financial institutions. Washington appoints the president of the World Bank, just as Europe appoints the managing director of the International Monetary Fund. It is time to end this tradition in favour of an open, merit-based selection process.
Although far from perfect, other institutions are starting to go this route. The World Trade Organization has detailed procedures for selecting its secretaries-general, emphasizing openness and merit. Its secretaries-general alternate between the “developing” and “developed” worlds, many of them bringing experience from the field. The process that selected new United Nations Secretary-General Ban Ki-moon made small steps towards openness, with candidates announcing their candidacy in advance, developing platforms and giving public speeches on their vision.
The Organization for Economic Co-operation and Development broke with the tradition of electing a European or North American secretary-general when it chose Mexico’s Angel Gurria. Even the bank’s sister institution, the International Monetary Fund, is considering an open selection process for its next managing director, as well as a number of governance reforms.
If it is to be legitimate, the decision-making process must also be more democratic.
Unilateral decisions by the U.S. government will not work. Nor will selection by a board of executive directors where the seven most industrialized countries, with less than 15 per cent of the world’s population, exercise 44 per cent of the bank’s voting power.
The selection of the successful candidate should be endorsed by a double majority of all bank members. The first majority would be weighted by member countries’ populations, and the second by their economic weight. Such consensual decision-making proposals are currently being touted by some groups to address current efforts to reform the International Monetary Fund’s voting system.
Finally, candidates should be selected on the basis of their abilities and experience, and should be asked to put forward their vision for the bank. Not only would this help eliminate candidates carrying undesirable baggage (such as Mr. Wolfowitz); it might also rebuild the credibility of and trust in the institution. It would also carry great symbolic significance if the next president was from a developing country.
Canada has already publicly stated that it supports a transparent, merit-based process for selecting the heads of the International Monetary Fund and the World Bank. While Finance Minister Jim Flaherty prematurely sprang to Mr. Wolfowitz’s defence, he might correct that error in judgment by pressing for changes in the selection process.
Now, more than ever, a reformed World Bank will have to be as attuned to its own internal governance as to the governance of its developing country members.
Roy Culpeper is president of The North-South Institute, an independent research organization that focuses on issues related to international development and foreign policy.
Fraser Reilly-King is co-ordinator of the Halifax Initiative Coalition, a Canadian non-governmental organization that focuses on economic justice issues related to the World Bank and the International Monetary Fund.