Lant Pritchett is making an impassioned case for the Nigerian candidate, Ngozi Okonjo-Iweala, rather than Obama’s nominee, Jim Kim. See why Ngozi on the CGD blog and (maybe more important) how Ngozi can still get the Presidency in the Guardian. I admire Kim, but I’m inclined to agree with Lant.
One important bit:
Not every admirable individual is qualified to be head of the World Bank. Kim’s views against economic growth and private investment (detailed in his book, Dying for Growth) are already raising eyebrows in the press and causing concern among world leaders. Political leaders in the UK and Germany must wonder how Kim’s negative views about fiscal austerity and neoliberal structural adjustment apply to Europe.
…Moreover, Kim is a doctor and the narrowness of his expertise is likely to raise concerns among the bank’s big borrowers, given the array of issues a full service development organisation must address. If Kim really is the best-qualified candidate to head the World Bank, countries will want to know why, in months of search, speculation, media discussions, and blog debates, his name was never raised, even by those now endorsing his candidacy.
This is more important than you might think.
Most people underestimate the World Bank. It is the biggest development actor in the world, by a lot. Add up every single NGO in the world and their combined giving, and you might get what the Bank gives in a month. Add up all the countries and all their individual giving direct to poor countries (throwing away the military bits) and you get close. At the same time, with DFID and a handful of others, the bank is the intellectual leader in aid. Where they lead many follow.
Of course, many people overestimate how influential is the President of the Bank. It is a huge and decentralized agency. It does not turn on a dime. And there are overseers and executives and (never forget) interfering donor countries. So a new president’s power is not absolute.
Even so, it makes a big difference. Even a little control over something enormous is still huge. the new president can and will steer the Bank over the course of four or eight years. I feel more confident in Ngozi’s direction.
13 Responses
Interesting post. I worked for the World Bank before starting grad school and I have the impression that who leads the Bank is not that important as your post suggest. The Bank has its own logic and the Bank bureaucrats are a very powerful group, so institutional inertia is so strong. The WB president can promote some initiatives but in 5 years is little what he or she can do to change this institutional inertia.
Best,
Stan
China is now a bigger lender to Africa than the World Bank. This is a very important fact that somehow gets lost in a lot of the discussion about Ngozi Okonjo-Iweala, Ocampo and the World Bank.
That opening statement leads me three important questions. How important is the World Bank to the future of Africa (short term, medium term and long term), how successful has the World Bank been in the past and how much impact would an African woman at the helm of the World Bank have on African economies?
How important is the World Bank to the future of Africa? In the short and medium term, quite important. In the long-term probably not so important, we expect emerging market lenders to rise in prominence and the structure of the relationship between Africa and the Western World to transit from donor/recipient to trade partner.
Isn’t it better we plan on how to engage more effectively with emerging market partners like China (the largest infrastructure financier by far on the African continent), than looking for ways to dominate an institution that will decline in importance?
How successful has the World Bank/Washington Consensus been in the past? Not very successful. The main focus of the World Bank today is to reverse the mistakes it made in the eighties and nineties. It encouraged African governments to cut spending on social programmes like education and healthcare then. The result was that many institutions responsible for the provision of public goods collapsed. Today it is heavily involved in rebuilding the very same institutions that its policies helped destroy in the first place.
Then there was “shock therapy” capitalism that led to the privatisation of wide swathes of the economy before proper checks and balances could be put in place (regulatory mechanisms). This of course led to crony capitalism, inflation and the sudden removal of social welfare schemes. (Russia in the nineties is a classic example).
How much impact would an African woman at the helm of the World Bank have on African economies? This depends on how much latitude the World Bank presidency has to change the direction of that institution. The World Bank is still controlled by the Americans and it will still dance to the tune of the “NGO lobby” — estimates are that the “NGO” industry employs hundreds of thousands of Westerners — and they want a World Bank that gives them what they want — more funding for social welfare and “capacity building” type projects.
Unfortunately those kinds of projects, for all their benefits do not lead to significant economic growth. Africa desperately needs infrastructure to drive economic growth and if the presence of an African woman at the helm could help us obtain financing for infrastructure projects at cheaper rates, that would be a real advantage.
All said, the World Bank is a very complex organisation with a deeply troubled past. It is not as omnipotent or as efficient as we think it is. It doesn’t have any competitors so we have no way of measuring its performance against its peers (although that may change with the arrival of the Chinese). Finally, the degree to which a nation is dependent on the World Bank is a very good indicator of the lack of sophistication of its economy.
Chris, why was my comment deleted???
Ngozi is an orthodox economist who will maintain the status-quo in the World Bank – doesn’t matter if she is African or a woman – you have to hear her speak on telly to judge! No wonder even The Economist is rooting for her, “to promote private foreign investment.” Business as usual it will be – literally.
Ocampo on the other hand is an heterodox economists and Kim seems even better as a rank outsider, and not an economist!
@Chris
The question you ask is of course the one that should be at the center of this discussion, but never is. And you can ask it over and over, and it will always be ignored because too much is at stake. A whole industry is build on the premise that there exists expertise in something called “Development”, and the high priests of Development warship at the alter of the Bank. The loyal subjects are simply unwilling to acknowledge the emperor’s nudity.
BTW…previous post not to be confused with Chris Blattman. Didn’t put my last initial.
Can we back up a minute?
Is there any evidence, and I ask sincerely, that the World Bank has done more good than harm on the whole? Is the effect of their monetary policy, loans, etc perhaps simply neutral? Some good here, some bad there? Is there overwhelming evidence that says yes the World is a far better place because the World Bank is in it, supplies loans, etc?
This is not a loaded question. I simply don’t know other than anecdotal evidence I have seen, or more poignantly, haven’t seen in places like W. Africa and Brazil.
I had several friends that worked at the World Bank. Highly educated and fairly smart. Good pedigrees all around and very well intentioned.
But I’m skeptical that on the balance what they are doing is making significant progress in relation to the financial resources that are deployed.
Open to any thoughts….
I don’t think this is right Chris: “Add up every single NGO in the world and their combined giving, and you might get what the Bank gives in a month.” Given IBRD does not “give” the focus should be on IDA, the World Bank website says: “In fiscal year 2011… IDA commitments totaled US$16.3 billion”. In comparison the World Vision Partnership alone contributes around $3 billion and the Hudson Institute estimates global philanthropic flows to overseas aid in excess of $50 billion per annum. Even with IBRD added total World Bank flows would not be many times that of NGOs.
I was pretty taken back by criticisms of Easterly and Pritchett (among others) and agree with Patrick’s observation about an economist superiority complex. Over decades and thousands of pages of criticism of narrow-minded Bank technocrats relying on and blindly applying faulty models of development assistance and now some of those same critics are using Kim’s anti-neoclassical wash. consensus views (and lack of economics experience/training) against him? Okonjo-Iweala or Ocampo might have expertise in dealing with the Bank, donor states, and other partners from a developing country’s perspective. But Kim has expertise on the feedback and accountability side, two words I read over and over again in criticisms of the Bank. His experience in witnessing and evaluating the success of often ill-fated partnerships between developing country governments and the Bank, along with his medical and anthropological training, put him in a unique position to apply that feedback in a meaningful way. Plus his leadership might end the Bank’s tendency towards mission creep by refocusing its strategies and tactics. The U.S. still picked him, to be sure. But it’s a huge step forward from previous selections.
This article is indirectly about Dr. Kim but should raise questions about his candidacy: (Warning: This is about hazing at Dartmouth, and is pretty disturbing and gross).
http://www.rollingstone.com/culture/news/confessions-of-an-ivy-league-frat-boy-inside-dartmouths-hazing-abuses-20120328?page=6
Good post, Chris. I think this one of those rare cases where there are many good candidates for the position. I can’t see the Bank going wrong with either Kim or Okonjo-Iweala (or Ocampo, for that matter), although it would certainly be great, at least symbolically, for the World Bank president to be an African woman.
But I do agree with Gregg that we shouldn’t be so quick to consider Kim’s lack of economic bona fides a handicap. The Bank could certainly use some fresh thinking, and his non-traditional academic and policy background might help the organization grow in useful and unexpected ways.
It could just be me, but I detect an economist superiority complex at work with some of the criticism of Kim. To me, Kim’s most relevant qualification for Bank president might be his training as an anthropologist, since anthropologists have long had really important things to say about development (as you know and have said before: https://chrisblattman.com/2011/06/21/books-development-economists-and-aid-workers-seldom-read-but-should/).
I’d also point people towards Daron Acemoglu and James Robinson’s deconstruction of Lant Pritchett and Bill Easterly’s opposition to Jim Kim’s nomination by President Obama at http://whynationsfail.com/blog/2012/3/27/mr-kim-vs-the-world-bank.html.
Pritchett and Easterly are backing a candidate who really represents more of the same at the Bank, while avoiding this point by questioning Kim’s CV. In fact, Pritchett and particularly Easterly, who has been a strong critic of the Bank, are now making a strong defense of the status quo. Ngozi Okonjo-Iweala may be African but she is a straight-up neoliberal on macro issues, frankly at high cost for average people (her challenge to fuel subsidies in Nigeria while making sense on paper, were roundly criticized at home and would have sunk thousands into misery).
Kim is a strong manager, visionary leader and has ideas that will at the least create discussions at the Bank that never really get to happen.
I care, but I can’t vote.