Advocates for a competitive, meritocratic selection process for the President of the World Bank are dead right. Allowing the White House to just pick is deeply unfair, inefficient, and a relic of a by-gone age. But why stop there? Here’s my list of international patronage anachronisms that should also go:
What is the biggest distortion in the world economy? A forty-percent price gap for identical widgets traded in two different markets is considered large these days. In capital markets, investors would be shocked by a price difference of one percent for the same security in two different exchanges. But in the global labor market, wage gaps for equivalent workers differ between countries by one thousand percent or more in some cases.
A Washington Post editorial today ( A Fight Over Corruption ) says that the new report by former Federal Reserve chairman Paul Volcker on the effectiveness of the World Bank's anti-corruption department, (the Institutional Integrity Department or INT)) "reserved its toughest language for the bank bureaucracy itself." The editorial then quotes from the report:
Yesterday the World Bank released its 2006 review of the effectiveness of its operations (Annual Review of Development Effectiveness 2006: Getting Results). Among other findings, "perceived governance quality has not yet responded to large-scale public sector reforms." As shown in a chart on p.
Dennis de Tray and I launched the latest CGD report for new leaders of international agencies on September 7th in Tunis, the current headquarters of the African Development Bank.
Dennis de Tray, a former senior World Bank official who became CGD vice president on Feb. 1, has urged the Bank to maintain a balanced perspective and exercise patience in the fight against corruption in developing countries.