Toasting Wolfowitz’s Departure? Not So Fast

As published in The Huffington Post


World Bank employees are raising champagne toasts to celebrate the departure of Paul Wolfowitz, but sober-minded critics of the neo-conservative agenda should think twice about raising a glass.

Yes, Wolfowitz embodies the arrogance and high-handed conceit of the Bush administration. Yes, his failure of judgment helped lead us into the quagmire of the Iraq war. And yes, his imperious management style and capricious campaign against corruption as Bank president alienated longtime Bank staff. All these are good reasons to despise him.

But the issue at the core of the World Bank leadership question is how the Bank can best fulfill its mission of fighting global poverty. It is not clear that Wolfowitz’s untimely departure furthers that poverty fighting mission. And for those primarily interested in seeing the Bush inner circle (and the architects of the Iraq war) fall from grace, Wolfowitz’s ouster is less advantageous than may at first appear.

If Wolfowitz had completed his term, his successor would have been selected by the next president of the United States. In other words, some one other than President Bush. Instead, Wolfowitz’s early departure gives Bush the ability to install a World Bank president for another five years. Five more years of a Bush crony at the helm of the World Bank, versus two and half if Wolfowitz had not been ousted.

We don’t know who is going to win the White House in 2008, but I am willing to wager that whoever it is, he (or she) will be less committed to a neo-conservative agenda than our current President. I am even willing to hope that whoever wins in ’08 might be interested in actually doing something about global poverty, instead of just using the rhetoric of promoting good governance and fighting corruption as a cloak for U.S. neo-imperial ambitions.

The Wolfowitz debacle gives the Bush administration another opportunity to install a fellow neo-conservative traveler as Bank president. And even if the next Bush appointee does not use the Bank to advance a neo-con agenda, Bush’s severe lack of credibility on the world stage means that anyone he appoints will be perceived as promoting U.S. interests. Whether the next president of the World Bank uses the institution to advance the Bush agenda or is just perceived as doing so, the Bank’s ability to fight poverty is undermined.

This is not good. Although the private financial sector is now capable of providing some capital to emerging markets — where once only the World Bank dared to tread — the Bank remains a crucial source of funding for projects that help the poorest of the poor. Private capital does not invest in malaria eradication, subsistence agriculture, or education for young girls. Publicly funded development banks step-in when markets fail: when the need for basic services is acute, but the beneficiaries are too poor to afford them.

Unfortunately the Bank has a long history of tragically failed projects. Although many of these development disasters long pre-date Wolfowitz’s tenure, the neo-conservative approach exacerbates the tragedy. At the heart of the neo-con analysis is the idea that there is one right way of doing things (the American way); neo-conservatives believe that these “best” institutions can be imposed by force, from outside. Like the debacle in Iraq, this ideological, technocratic approach is precisely what is wrong with the World Bank’s current way of operating. The poor need participatory, bottom-up initiatives, not top-down development projects like mining concessions and dams. Visionary leadership is required to guide the Bank towards more effective poverty alleviation strategies. Replacing Wolfowitz with another Bush crony — who will serve five more years instead of two and a half — means the Bank will ‘stay the course’ for twice as long. Another five years of Bush appointed Bank leadership will only further the failures of foreign aid.

Don’t put away the champagne just yet though. There may be cause for celebration, if the Wolfowitz debacle precipitates the introduction of a merit-based selection process for the World Bank presidency. This fiasco has emboldened a challenge to the U.S.’s traditional prerogative of choosing the World Bank president (Europe selects the head of the IMF). Nearly 200 people, including aid agency heads, recently sent a letter to the Executive Board of the World Bank, calling for a transparent selection process based on competency and open to people of all national origins.

An aid institution run by competent leaders who promote poverty reduction, not U.S. interests? Now that would be worthy of a toast.