Former representative Barber B. Conable Jr., President Reagan's choice to head the World Bank, is a Republican fiscal conservative considered to be one of the strongest, smartest political figures of his era.

As word of his selection spread through the Senate floor yesterday afternoon, the reaction was one of elation, said Sen. Daniel Patrick Moynihan (D-N.Y.). "Barber Conable is a good man. The World Bank is intended to do good things. There's a match," Moynihan said.

Conable, 63, retired from Congress a year ago after 20 years in the House, although the upstate New York congressional district he represented would likely have returned him to his seat for the rest of his life.

The testimonials when he left overflowed: Vice President George Bush, a friend and former House colleague, called him "one of the most sane and able men in the whole United States Congress." House Ways and Means Committee Chairman Dan Rostenkowski (D-Ill.), a longtime political adversary during the years when Conable was the committee's top-ranked Republican, described him as "a remarkable intellectual and moral force."

He could easily have retired, hung out a lobbyist's shingle, and lived lavishly. But true to his political independence (he had a firm policy of rejecting campaign contributions of more than $50), Conable wanted no part of lobbying. "I don't want to be owned," he said when he retired.

But a retirement of college teaching and speech-making could not occupy Conable, friends say, and he needed little persuasion to return to Washington.

Some sources said the choice of Conable represented a recruiting victory for Treasury Secretary James A. Baker III, producing someone with a strong standing in Congress to help defend the administration's policy on the Third World debt crisis.

"Conable is a good team player for Jim Baker's efforts to introduce a new Third World policy," said David Smick, a Washington consultant with close ties to Rep. Jack Kemp (R-N.Y.). Conable was not the first choice of supply side Republicans, but they will pleased with him, Smick predicted.

The administration is counting on the World Bank to become more involved in meeting the debtor nations' financing requirements.

His work on the Ways and Means Committee, where he generally led the fight for President Reagan's tax policies, provides little direct evidence of his position on the debt crisis.

But former associates said that Conable's leading role as a supporter of free trade on the committee is an indicator of how he will approach the World Bank's economic mission.

"He's a global man," said John Meagher, vice president of LTV Corp. in Washington and the Republican chief counsel on the Ways and Means Committee from 1972 to 1980.

"He has dealt in international trade relations for years and has an understanding of the world economy and concern about the whole financial sector. . . . He is well respected on Wall Street. He's a known quantity to the financial community in the world," said Meagher.

Asked where Conable is likely to try to lead the World Bank, Meagher said:

"He will work toward dynamic democratic economics, because the paramount thing he believes in is freedom, and economic freedom is the key to that. He will try to do things to help [the Third World] become more economically free."

Moynihan predicted that Conable will be "very much open to what the new nations are going to have to have -- a vibrant world trading system in which they can sell as well as buy."

The sources of Conable's popularity in Congress included his intellect and independence. Conable was a steadfast Republican, who stuck with former president Nixon during the legislative battles over the Vietnam war and remained on Nixon's side during the impeachment debate that led to Nixon's resignation in 1974. (He said later that Nixon "probably did more to rob me of my sense of pleasure in public service than anyone else.")

But his party loyalty didn't cost him the respect of opponents, for the most part.

"He's the kind of person that has to strain to be partisan," said Rep. Sam Gibbons (D-Fla.) when Conable announced his retirement two years ago.

"I used to fight with him all the time because he was a big believer in corporate tax subsidies," said Robert S. McIntyre of Citizens for Tax Justice, a liberal tax lobbyist. "He's smart. He's honest. . . . Even people who fought with him thought he was a good guy."

Conable's loyalty has not barred him from criticizing Reagan for what Conable considers an inadequate effort to reduce federal budget deficits.

"I must say that Reagan has a much greater capacity for governing than he has exercised in the past year. He is opting for current popularity, rather than a place in history which would be impregnable," he said last year.

Most of all, associates said, Conable's standing in Congress was based upon his reputation as a legislator and his commitment to making the congressional process work.

"While politicians can advocate results, legislators must find a way to get there," Conable said several years ago.