Excuse Me, World Bank, This Time Is Last Time’s Next Time

August 17, 2016

Historically the World Bank’s President was nominated by the USA and that person was then approved by the World Bank’s Board (and in a reciprocal agreement Europe nominated the head of the IMF).  Now, discussions have begun “over how and whether to reappoint” Jim Yong Kim, when his first term ends next June. I agree with the World Bank Staff Association that we need to be able to have confidence in this process.

In April 2011, in part still smarting from the disastrous experience with Paul Wolfowitz, the World Bank’s Board of Governors unanimously committed to an “open, merit-based and transparent” process for the selection of the President. 

In the selection process of 2012 there were for the first time multiple nominees including an African woman, Ngozi Okonjo-Iweala, who many argued was more qualified to be head of a development bank than the American nominee. Just compare the relevant training and work experience of having been an economist, Minister of Finance, and Managing Director of the World Bank (Okonjo-Iweala) to having been a medical doctor, one part of a small NGO, and briefly the president of a small liberal arts college (Kim). But to the disappointment of many, and the surprise of no cynic, the key actual qualification was American nationality and Dr. Kim was appointed to a five year term. (For full transparency, Ngozi Okonjo-Iweala became a CGD distinguished visiting fellow in 2015 and has been a CGD Board member since 2007).

What I heard from many US officials at the time was that the American election in November of 2012 meant Obama could not afford to either “lose” or “give away” a traditionally American position (especially to an African). A common position, privately expressed, was an acknowledgement that this was a weak appointment but the suggestion that “next time” it might be possible to consider American support for a truly “open, merit-based, and transparent” process, one that might even result in the appointment of a non-American.

This time is last time’s next time. To accept the “next time” rationale this time would be to accept that “next time” will never come.    

Three points.

First, this time is a time. There has never been any expectation that World Bank Presidents would be reappointed. Only two of twelve presidents have been reappointed for a second five year term: Robert McNamara and James Wolfensohn. Reappointment, then, is the exception rather than the rule. The argument that the selection process for a reappointment should be different and isn’t a “time” is a non-starter, as it thwarts the very idea of having limited five year terms. Every President would love to declare that a re-election doesn’t need a full blown election, which is precisely why democracy requires that re-elections are just the same as elections.  

Second, I am not (now) arguing that Jim Kim should not be reappointed because of poor performance. I am just arguing that the context within which his performance should be assessed is an “open, merit-based and transparent” process for considering who should lead the World Bank this time. Certainly it is possible that one of the candidates to be the next president will be Jim Kim. Assessing his strengths and weaknesses in his current term will be important factors in deciding whether he or some other nominee should be the World Bank’s next leader.

But even if, counter-factually, there were broad and deep consensus among all stakeholders that Jim Kim had done a fantastic job in his first term, this time would still be last time’s next time and it still would be necessary to go through a full-blown selection process in order to ensure the legitimacy of the selection, even if the result of that process is a re-appointment.  Given the World Bank Staff Association’s recent open letter, it is clear there is not a broad and deep consensus on Jim Kim’s performance, which makes the legitimacy of the process even more important.

Third, this is not saying that the USA should not take its responsibility as major shareholder seriously.  But as a major shareholder, it should honor its April 2011 commitment to an open, merit-based and transparent process. Announcing (privately or publicly) support for the re-appointment of Jim Kim even before the process has gotten underway is a trifecta: it undermines "open," undermines "merit-based" and undermines "transparent." 

There have been many voices out there for many years saying that reserving the leadership of the World Bank exclusively for an American increasingly undermines the legitimacy of the leader and the organization (see Raghuram Rajan here in 2008 and Michaels Clemens and Kremer here in 2016).  This doesn’t mean that an American might not emerge as the best candidate, but that this choice would only have legitimacy if it emerges from a process all agree was a vigorous and open global search for the best leader that considered more than the history of only American males.

This time is next time, so this time of selection of the leader of the World Bank should be the best time. 


CGD blog posts reflect the views of the authors, drawing on prior research and experience in their areas of expertise. CGD is a nonpartisan, independent organization and does not take institutional positions.