[Mb-civic] The World Bank Wolf at the door - Economist

[Michael Butler]

The World Bank

Wolf at the door
Mar 17th 2005
>From The Economist print edition


Paul Wolfowitz is certainly an audacious choice to head the World Bank. Is
he a good one?

Reuters
Reuters


SOMETIMES George Bush's chutzpah beggars belief. On March 16th he nominated
Paul Wolfowitz‹deputy defence secretary, hard-line neoconservative and
intellectual architect of the Iraq war‹to head the World Bank, barely a week
after appointing John Bolton, another hard-liner, to be his man at the
United Nations. Europeans and others were aghast, particularly about Mr
Wolfowitz. How could Mr Bush, who promised a more conciliatory diplomatic
touch in his second term, put one of his most controversial lieutenants into
the world's top economic-development job? Clear proof, they fumed, that Mr
Bush doesn't give a fig for multilateralism.

Is that fair? The appointment of Mr Wolfowitz at least shows that the Bush
team takes the World Bank seriously. Mr Wolfowitz may be controversial, but
he is certainly no lightweight‹and the administration has appointed plenty
of those to top economic jobs (see article). If Mr Bush and his team
disdained the organisation, they would not have chosen him. Better questions
are whether Mr Wolfowitz has the right talents for the job and, even if he
does, whether his close association with Mr Bush dooms him to failure.

The World Bank is the world's biggest development agency‹a sprawling
bureaucracy that is extremely difficult to run well. Its leader needs to
know about development, be able to articulate a workable vision and be a
good manager. Mr Wolfowitz scores passably on two counts. He is not an
economist or a banker, but has first-hand experience of developing countries
(as American ambassador to Indonesia). He has public-sector management
experience‹not least as number two at the Pentagon, although the bungling in
Iraq raises questions about just how good his management skills are.

The biggest concern is that Mr Wolfowitz is an idealist, some would say a
Utopian, whose career has been guided by zeal to bring democracy to the
world‹regardless of what the world might make of that ambition. Thus far, Mr
Wolfowitz has focused on the relationship between democracy and security,
but his belief in the power of democracy will surely colour his views of
economic development as well.

So it should, you might say. But it is doubtful that Mr Wolfowitz's
zealotry, albeit in that noble cause, is right for the Bank. Its job is
alleviating poverty, and the relationship between democracy and the relief
of poverty is, let us say, complicated. Think of China. There is also a risk
in coming to the World Bank with a vision that is both grand and
idiosyncratic‹witness Robert McNamara, another Bank president fresh from the
Pentagon with a mind to change the world. Haunted by Vietnam, Mr McNamara
had big ideas for eliminating poverty and oversaw a huge expansion of the
Bank. The result was bad lending and a weakened institution. Jim Wolfensohn,
whom Mr Wolfowitz will replace, was likewise drawn to the grandiose. The
Bank needs a realist more than a visionary.

Worse than this, however, is Mr Wolfowitz's closeness to Mr Bush. His
appointment tells the world that Mr Bush wants to capture the World Bank and
make it an arm of American foreign policy. If that is his intention, it is a
mistake. As the biggest shareholder, America rightfully has outsize
influence in the Bank. That does not mean the Bank should become
Washington's tool. If Mr Wolfowitz is to be a credible and effective head of
the Bank, his first task must be to dispel the suspicion that he is Mr
Bush's lackey. His goal when he comes to make his first speech should be to
disappoint his former boss.

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