The World Bank grew out of the post-World War II consensus that the global economy does not need to be a zero-sum proposition, and that achieving peace requires a commitment to shared prosperity. Since the Bretton Woods conference in 1944, the United States has traditionally chosen the head of the World Bank, while European leaders have selected the director of its sibling organization, the International Monetary Fund.
In 2012, for the first time, countries other than the United States put forward strong candidates to lead the World Bank, including Ngozi Okonjo-Iweala, an eminent Nigerian economist and dedicated public servant. The non-U.S. nominations were a long-overdue recognition that regions that are often recipients of aid need not be subservient to traditional donor nations. But the United States put forward a well-qualified candidate, Jim Yong Kim, with a demonstrated commitment to global development, and the World Bank’s directors selected him.
They should feel no such obligation this time around. President Trump’s candidate to run the World Bank, David Malpass, is unfit for the post.
By the World Bank Group executive directors’ own publicly stated list of qualifications, Malpass is an undeserving candidate. The 25 executive directors want a candidate with “a proven track record of leadership.” At the onset of the global financial crisis in 2007, Malpass wrote a Wall Street Journal op-ed entitled “Don’t Panic About the Credit Market.” At the time, he was chief economist at Bear Stearns, which collapsed under the weight of its risky subprime bets and had to be bailed out just seven months after Malpass’s reassuring message.
Rather than showing a sense of humility or responsibility for the wreckage that the Great Recession caused everyday people, Malpass spent years publicly urging the Federal Reserve to raise interest rates — long before most experts thought the economy could handle such increases. In 2012, again in the Wall Street Journal, he predicted that another downturn would come the following year. It didn’t. Malpass has a “proven track record,” all right, but it’s not one that inspires confidence in his judgment.
The bank’s executive directors additionally want a candidate with “the ability to articulate a clear vision of the World Bank Group’s development mission” and “a firm commitment to and appreciation for multilateral cooperation.”
Malpass, the undersecretary of the treasury for international affairs, has articulated a vision that is diametrically opposed to the goals and tactics set out in the World Bank’s own strategic planning documents. He has argued to cap the World Bank’s size and limit the number of countries it can lend to. In congressional testimony last year, he criticized the World Bank for its increasing emphasis on providing policy advice and coordination, in addition to traditional financial support, and alleged that World Bank officials “are often corrupt in their lending practices.”
After his nomination became public last month, Malpass published an op-ed in the Financial Times outlining what he would do as president of the World Bank. He hewed to the Trump party line: More power to the free market, and less to the public sector and civil society. Notably, he made no mention of the World Bank’s decision in 2016 to put the United Nations’ Sustainable Development Goals at the center of its strategic planning.
The World Bank has taken seriously the need to incorporate climate risks into its investments and policy advice; the risks go unmentioned in Malpass’s “what I would do” essay.
The position of World Bank president will be decided by a simple majority vote of its executive directors this spring, after the window for nominations closes March 14 and the field is narrowed to a shortlist of up to three candidates. Unlike at the U.N. Security Council, the United States has no veto.
There will be other candidates for the position of World Bank president who will have global development experience, who will have a constructive vision for how the bank can contribute to eradicating global poverty and who will believe in strengthening multilateralism. The World Bank directors must reject David Malpass — and empower developing nations to shape the future.