Wanted in the Next World Bank President: Courage for Innovation and a Healthy Dose of Humility

March 15, 2012

With eight days to go before the nomination deadline, chatter about the next World Bank President has predictably focused on whether America’s monopoly on the post is an anachronism or if it’s still a good way to keep US engagement. Speculation about potential candidates has tended to weigh the personalities, their egos, and how they might be received by shareholders and/or Bank staff. (My money is still on Secretary Clinton, although Pepsico’s management moves on Monday make me think Indra Nooyi may be the true frontrunner.) What I’ve heard less about is: what kind of person should lead an institution facing an existential crisis?The World Bank remains the leading global development institution. Even as its relative importance may shrink, it is still the go-to place for expertise, research, and policy advice. Even though the Bank has plenty of critics, it’s no coincidence that it is the first port of call for donors seeking a credible, capable agency to run things (how else to explain the 1,075 different trust funds the Bank administered in 2010 on behalf of 200+ donors?)But the World Bank is also on the precipice of major changes to remain relevant in a whole new world. India, the recipient of one-fifth of funds from the Bank’s soft loan window, is about to graduate. India’s exit from the 52-year old International Development Association (IDA) will coincide with a long line of other countries (Ghana, Vietnam, Angola, Mongolia, Nigeria, Sri Lanka, Zambia…) moving into middle-income status in coming years. In fact, Ben Leo and I project that IDA will lose more than half of its clients over the next dozen or so years; the population of those served by IDA will plummet from more than 3 billion to less than one billion by 2025.This leaves three big questions for the next President that get to the heart of the raison d'être of the World Bank:

  • How should the Bank operate in the 30 or so remaining low-income clients, nearly all in sub-Saharan Africa and mostly fragile or post-conflict states, the precise places where the Bank has had the least success?
  • In an age when capital is plentiful from private sources and new donors like China, how will the Bank continue to be relevant to its hard window and newly-graduated clients?
  • As shareholders push the Bank into new areas of global public goods, like spurring clean energy technology, how will the organization contribute?
None of these questions are adequately answered by a World Bank continuing with its current model and business-as-usual. The next Bank President should know she’ll have to shake things up.Equally important, none of these questions will eventually be answered by smart people sitting in a room in Washington DC. Unlike the pretentions of some candidates, the World Bank cannot respond by just finding smarter people or applying more science or more intensive oversight or (God help us) better coordination.The answers to the Bank’s three big metaphysical questions lie squarely in letting go. The remaining uber-challenges of development—finding new ways to encourage private sector growth, delivering services in the world’s toughest places, creating incentives for better governance—are all objectives that will require creativity and learning-by-failing. This means finding new ways to encourage innovation and experimentation by staff and clients.This is one reason why the randomized control trial movement has become so powerful: we still don’t know what works. The field still doesn’t understand the development process very well and we certainly can’t predict the impact of various interventions in complex social, political, and economic systems. We need to try, test, tweak, and then try some more.The head of the World Bank doesn’t need to be the smartest person in the room or the one with a ready-made Best Plan Ever. If the White House wants that institution to thrive in the next decade, the candidate should be someone with a model in mind that enables risk-taking and iterative approaches. If the World Bank is going to help find solutions to the lingering problems of global poverty and underdevelopment, its next President must be a person that comes to the job with a willingness to experiment and a heavy dose of, dare I say it, humility.


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.