Only by embracing a competitive election process can the U.S.
ensure that its pick will have a mandate for reform.
For the first time since the World Bank's creation at the end of
World War II, the United States is facing a real challenge over the
bank's leadership. Leaders of some developing and emerging economies
have refused to support President Obama's unexpected choice of Jim
Yong Kim, the president of Dartmouth College, to lead the bank.
As the bank's executive board prepares to vote on April 18, the
Americans are likely to get their way, since an 85 percent
supermajority of the bank's voting shares are needed to appoint a
president, and the United States is the largest shareholder. But the
controversy is not going away. The Economist and Financial Times
have endorsed Dr. Kim's main competitor, Ngozi Okonjo-Iweala, an
economist who is Nigeria's finance minister and a former managing
director of the bank. Jose Antonio Ocampo, a former Colombian
finance minister and high-ranking United Nations official, has also
been put forward as an alternative. Petitions are circulating among
former bank officials and economists supporting the alternatives to
The controversy around Dr. Kim's nomination is understandable.
For decades, America has effectively had unilateral control over who
gets to lead the World Bank. Mr. Obama's unconventional pick of Dr.
Kim, a physician and anthropologist, has opened the door to
developing countries to put forward their own candidates whose
economic and banking qualifications more closely resemble those of
past leaders of the bank.
Regardless of whether Dr. Kim is the right choice -- and I happen
to believe he is an inspired choice -- his candidacy and the bank
will suffer unless the United States takes the high ground and uses
this controversy to reform how the institution is governed. Only by
embracing a competitive election process can the United States
ensure that Dr. Kim will have the mandate to revitalize an
institution long resistant to change.
Having an American at the helm of the bank partly served to
reassure Wall Street, originally the main supplier of the bank's
capital. With the globalization of capital markets, this
justification for the arrangement is long outdated.
Without a competitive selection process, the best leadership
ideas cannot emerge. Conversely, an election based on American
citizenship, as opposed to a vision for institutional leadership,
limits the support from shareholders that the president of the World
Bank needs to enact bold reforms.
As a result, the World Bank remains largely stuck in an
operational model of providing country-specific loans and grants
that are increasingly irrelevant to its institutional mission of
reducing global poverty. With the spectacular economic growth of
many developing countries in the last decade, commercial investment
in many emerging markets is booming. The typical aid-recipient
country receives donor financing worth less than 1 percent of its
The pressing challenges in international development have also
changed. While fewer countries are very poor, many of their citizens
remain so. The number of people living on less than $2 per day has
declined as a share of the world's population but has stayed around
2.5 billion since 1981. Income disparities have increased. More than
two-thirds of the world's poorest people now live in middle-income
countries, where health care, education and environmental
regulations lag far behind economic growth. Persistent poverty, when
combined with limited governance and unprecedented rates of
urbanization, has produced huge slums, which now house nearly one
billion people in developing countries. Many of the emerging threats
to global prosperity are collective problems that no government
alone can solve: climate change, water shortages, inadequate
agricultural productivity. …