Why the World Bank top post will go to (another) American
The deadline for the White House to nominate a candidate to lead the World Bank is 6 p.m. Friday. They will choose someone. And that someone will be an American.
At first glance, this seems absurd. The World Bank exists to serve developing nations. All of its operations take place in developing nations. And so you might think it would make sense to name someone from a developing nation to lead the institution. That’s certainly how at least some developing nations feel.
A number of them are throwing their support behind Ngozi Okonjo-Iweala, a Nigerian economist and finance minister who was previously a managing director at the World Bank, and Jose Antonio Ocampo, a former Colombian finance minister U.N. under-secretary for economic and social affairs. And it’s not just the small, poor countries who want to see a non-American in the seat: Reuters reports that South Africa will back Okonjo-Iweala, while Brazil will push for Ocampo.
The United States will ignore them.
This is, in part, for a grimy political reason. As Nancy Birdsall, director of the Center on Global Development, puts it, “can the Obama White House in an election year, facing a Congress suspicious of a globally honored president, eschew pushing through its own American candidate?” The answer, of course, is “probably not.”
But, according to some in the development community and in the White House, there’s also a good reason for it: What matters for the World Bank is resources. And keeping an American in charge helps protect those resources.
The United States is the World Bank’s largest donor. That’s been true under both Democratic and Republican administrations. And one of the reasons it’s held so steady, some think, is that the World Bank tends to be led by a high-ranking American official who is able to persuade the White House and Congress to continue supporting the body.
The outgoing World Bank president, for instance, is Bob Zoellick, a highly regarded Republican who served in key positions under both George W. Bush and his father. He was preceded by Paul Wolfowitz, another key Republican policymaker. Many believe the two men played an important role in keeping American financial support for the bank high in years when Republicans controlled the government.
So, for developing countries, the long-term cost of America giving up control of the World Bank might be that the World Bank has fewer resources. That’s not an obviously helpful trade. Perhaps that could be blunted if control went to China, or some other wealthy developing country that was willing to sharply increase its donations in order to purchase the prestige of the World Bank presidency, but that would carry its own set of new problems and challenges.