Debate Rises On World Bank Succession

The White House said yesterday that it would move quickly name a new World Bank president, affirming its traditional prerogative.

"Traditionally, the American nominee has become the World Bank president," White House spokesman Tony Fratto said at a news conference. "The president is going to try to select the individual he thinks is the best person for the job."

There were signs the Bush administration had absorbed lessons from seeing Wolfowitz driven out by a groundswell of international opposition. Treasury Secretary Henry M. Paulson Jr. said he would sound out counterparts before giving the White House a list of potential replacements. "I will consult my colleagues around the world," Paulson said in a statement.

When President Bush appointed Wolfowitz two years ago, he overrode the objections of many world leaders. Wolfowitz had been a primary architect of the Iraq war, and some people overseas, especially in Europe, saw him as a symbol of American arrogance.

There was evidence yesterday that world leaders would not immediately challenge U.S. claims on the bank presidency. European governments are intent on continuing the arrangement, thus safeguarding their claim on choosing the IMF leader.

"I don't think we should change this," Germany's finance minister, Peer Steinbrueck, told reporters near Potsdam, where he was chairing a meeting of counterparts from industrial nations.

Japan's finance minister, Koji Omi, added: "It's important that the U.S. maintains its leadership of the World Bank for the sake of the overall global economy."

That rationale underpins the arrangement. The United States and Europe contribute the largest amounts to both the IMF and the World Bank, which annually distributes about $22 billion in loans and grants. Having them in charge helps maintain their willingness to contribute.

While a merit-based system might sound appealing, it would be a morass, said Jeffrey C. Hooke, a former officer at the International Finance Corp., the private-sector lending arm of the World Bank Group, and author of a book about the bank, "The Dinosaur Among Us." "It would be too much of a radical shift for the United States to enter into a multi-country process," he said. "That would be total chaos."

Sentiments have been building for years that the World Bank cannot hold itself out as an international organization unless more countries have a say in how it is run. Earlier this month, Hilary Benn, international development minister in the British cabinet under outgoing Prime Minister Tony Blair, told Parliament that the American and European claims on the bank and the fund should be scrapped.

Gordon Brown, the finance minister who is set to succeed Blair as prime minister next month, is particularly interested in opening up the process to select the leaders of both institutions, according to several people familiar with his thinking on the issue.

Colin I. Bradford, former chief economist at the U.S. Agency for International Development and now a fellow at the Brookings Institution, said the arrangement would endure for now. He suggested the Wolfowitz debacle would force the Bush administration to find a more internationally palatable replacement. "They need a reconciliation candidate," he said.

Alex Singleton, president of Globalisation Institute, a London think tank, said given that the United States is the biggest investor in the bank, it is appropriate that the White House pick the president. He said, however, that much rests on who is picked to replace Wolfowitz. "If the choice is a right-wing conservative hawk, there will be a lot of trouble," he said. "This debate will go on and on."

Early speculation centers on Robert M. Kimmitt, a deputy Treasury secretary; Stanley Fischer, the Bank of Israel governor; and Paul A. Volcker, a former chairman of the Federal Reserve.

The reformers argue that the rationale for American and European control no longer holds: Many governments would be willing to raise their contributions in exchange for greater influence.

"This is about power, it isn't about money," said Kenneth Rogoff, a former IMF chief economist. "The World Bank just isn't going to continue to be effective if no one thinks its governance structure is fair."

Jordan reported from London. Special correspondents Karla Adam in London and Shannon Smiley in Berlin contributed to this report.