IFI governance


World Bank or US Bank?

President selection debate launched

7 February 2012

Rumours that Robert Zoellick will not seek another term as World Bank president after his term ends in June have thrown open the debate about leadership selection at the Bank.

In November 2011, political analysts and news reports began speculating that Zoellick would not seek a second term as Bank president, but by early February he still had not said anything in public. The Bank board was also silent on the issue, as Sunil Chacko, an academic at Simon Fraser University in Canada, wrote in a January piece for the website Huffington Post: “By not producing and leading an open, merit-based selection process the World Bank board is opening the doors for machinations of all kinds frequently seen in the international system, otherwise known as horse-trading.” Chacko called for the next Bank president to be selected in a transparent manner before Zoellick’s term ends on 30 June.

Since October 2008, the Development Committee, a group of finance and development ministers that guides the Bank’s direction, has endorsed an “open, merit-based and transparent” selection process “with nominations open to all board members and transparent board consideration of all candidates” (see Update 63). In April 2011, the Bank’s executive board approved a paper that “regularised the selection process for the president based on the Bank’s past experience and practice”.

The paper lays out recommendations for nomination, shortlisting and final selection of the president, but fails to go beyond the Bank’s own past practice, which has long been criticised by many civil society groups as weak and unfair due to the gentlemen’s agreement that allows the US to appoint the president of the Bank, while European leaders get to choose the head of the IMF. Collins Magalasi, of the African Forum and Network on Debt and Development, argued that “it’s a World Bank, not a US Bank. It needs the best candidate to get the job with support of wide Bank membership, not just the US.”

The process recommended in the paper is closed to any kind of external input and leaves many details to be decided by the board during each selection round, including the duration of the candidate nomination period. Moreover, development experience is not mentioned as a qualification criterion, even though the Bank only operates in developing countries. This fact has long prompted many civil society groups to argue that any candidate to the Bank presidency, as well as to the IMF’s top job, who is not supported by a majority of developing countries would lack legitimacy (see Update 75). Calls for a presidential selection that is truly competitive and rewards the best candidate available are being further discussed at worldbankpresident.org, a blog relaunched in January 2012 to provide a space for debate around the selection process.

Other international forums are also pushing for change at the Bank. In December last year, the United Nations’ General Assembly adopted a resolution that called for the reform of governance structures at the Bank and IMF, including regarding the representation of developing countries in quotas and voting rights. The resolution also “reiterates that the heads and senior leadership of the international financial institutions, particularly the Bretton Woods institutions, should be appointed through open, transparent and merit-based selection processes, with due regard to gender equality and geographical and regional representation.”

The G20 made this same commitment in a June 2010 communiqué that endorses “open, transparent and merit-based selection processes for the heads and senior leadership of all the international financial institutions (IFIs)” (see Update 71). Even Bank staff recognised the need for “merit-based” appointments to civil service posts in the Bank’s new draft governance and anti-corruption strategy and implementation plan, which was published in January.

European dominance of the IMF was reinforced in June 2011 when Mexico’s central bank governor, Agustín Carstens, was sidelined in the race for the Fund’s top job and European candidate Christine Lagarde sailed through a hasty selection process (see Update 76). It seems certain that the US will push to hold its grip on the Bank presidency when Zoellick leaves. The media has reported that US Secretary of State Hillary Clinton is interested in the job, while in January the name of former Obama administration economic adviser and former Bank chief economist, Lawrence Summers, emerged as another potential US candidate.

Soren Ambrose of NGO ActionAid said: “If Bank members want a genuine reformer, the best candidates could be developing countries academics and officials, like Chilean Michelle Bachelet, Costa Rican Rebeca Grynspan or Malaysian Jomo K.S. Even if they only want to preserve the status quo, there are plenty from the South who would do as good a job as Summers or Clinton.”