13th annual Municipal Finance Conference


13th annual Municipal Finance Conference


The Nominations for the Next World Bank President

Finally, the World Bank will have a president who is born in a developing country. After a succession of appointments of U.S. born-and-bred policymakers and financiers, the World Bank looks set to have a president with a personal life experience firmly rooted in a developing country.

The two leading contenders are U.S.-nominated Dr. Jim Yong Kim and the developing country nominee Dr. Ngozi Okonjo-Iweala. Other potential nominees, including Professor Jeff Sachs and former Colombian minister Jose Antonio Ocampo may be withdrawing their candidacies, and while nominations can still be made until 6 p.m. today, it seems unlikely that further names will emerge. Both the Obama administration and developing country governors deserve credit for surfacing highly qualified and credible candidates.

The selection process for the World Bank president has long been a source of friction between those who favor true multilateralism and an open, transparent process to select the most meritocratic candidate, and those who believe that no multilateral institution, especially one that relies on budgetary contributions from advanced countries for its financial survival, can prosper without strong, sustained and unquestioned U.S. support. The World Bank is fortunate that the U.S., its largest, most powerful and founding shareholder, has rarely wavered in providing its full backing to the institution. That has allowed it to evolve over the last 60 years without major traumatic upheavals, despite significant public campaigns like “50 Years is Enough” and the Meltzer Commission Report that argued for radical change or even closure.

With the nomination of both Dr. Kim and Dr. Okonjo-Iweala there is an opportunity for the first time to make the selection of the World Bank president about the future of the institution rather than about the nationalities of the candidates. In fact, the two candidates share many common traits. Both were born in developing countries (when Dr. Kim left Korea in 1964 it had a lower GDP per capita than Nigeria where Dr. Okonjo-Iweala was and is currently living); both are development professionals with impeccable academic qualifications; both have experience in managing large bureaucracies with untidy politics; both have been passionate about improving the lives of the world’s poorest people.

But the two candidates may lead the institution in different directions. Dr. Kim has spent his life in the area of public health, organizing and delivering AIDS treatment to the poor. This experience— which includes a deep understanding of how to scale up interventions, how to reach remote, disadvantaged groups, and how to focus on results in terms of lives saved— readily translates into other interventions to reduce poverty among the poorest. Dr. Kim has worked with grassroots organizations to achieve change. His focus on poverty reduction and service delivery is certainly a priority for the World Bank.

Dr. Okonjo-Iweala has also focused on low-income countries but has increasingly been concerned with broader concepts of national development. She has fought hard to change the world’s perception of Africa away from a hopeless, charity-deserving continent to one of a continent with dynamic market opportunities and growth potential in many of Africa’s economies. With her background as finance minister of Nigeria, Dr. Okonjo-Iweala has worked diligently to restructure expenditures by reducing recurrent spending and increasing public investment in infrastructure while avoiding unsustainable budget deficits and high debt levels. She has championed the causes of transparency and anti-corruption. Her priority in Nigeria has been to create jobs and her experience has been with transformational change led by national policymakers. Her focus on national development strategies in low- and middle-income countries is also a priority for the World Bank.

The selection process for the World Bank president should be about choosing the real priority for the World Bank in the years ahead, not about the nationality of the two nominees. For too long, the World Bank has tried to be all things to all people in development. It has embraced poverty reduction as well as growth and development; national government strategies and community-driven development programs; individual projects and national transformational programs; research and knowledge as core instruments for development as well as credits and loans. But in doing so, it has spread its resources thin and is increasingly finding that its impact falls below potential.

The nominees now represent two alternative visions for the institution: one focused on poverty reduction for the poorest people, embodied by Dr. Kim, and the other focused on jobs, growth and national development strategies, embodied by Dr. Okonjo-Iweala. The bank’s governors should select the next president based on whose experience most closely mirrors the shareholders’ vision for the institution and not on the basis of nationality.