Tuesday, May 15

Ah, Mr Wolfowitz, you overlooked World Bank Staff Rule number 500,051.2, Paragraph 613

"Pundita, dear, it seems you got your wish. Paul Wolfowitz hasn't yet chained himself to his desk but he has been fighting to stay at the Bank, as you advised. I notice that after launching a series of volleys, you have been very quiet about Affaire Wolfie. Are you too busy jabbing pins into an effigy of Hilary Benn to comment on the drama or offer more advice?
Boris in Jackson Heights"

Dear Boris:
Visit Dan Riehl's blog for links, if you want to keep up with the latest well-meaning but naive impassioned defenses of Wolfy from various US media sources. And drop by World Bank President blog for all the news, analysis, speculation and delicious insider gossip about the Battle of the Bank.

I seem to recall writing an essay in 2005 that was titled "Courtiers and Indentured Servants" or something like that, in which I tried to convey a little of the world inside the World Bank. Yet the Bank is impossible for outsiders to comprehend unless they are steeped in the history of large imperial courts in Byzantine times.

The Bank evolved into a Byzantine organization. This is due to an extraordinary convergence of factors; among them, the Bank's international charter and peculiar status as a quasi-bureaucratic for-profit bank that must answer to many governments and, in many respects, to another quasi-bureaucratic transnational organization -- the International Monetary Fund.

So to see the Bank as merely a bureaucratic organization is to miss by a mile. The Bank's way of doing things is a throwback to a time that no longer exists. It reminds me of the plot of Jurassic Park; something that died out but was resurrected due to human meddling.

Here I can imagine several readers rolling their eyes in impatience. I am not taking you through all this so you can understand Wolfowitz's situation or even the Bank. I am continuing my quest to discern the outlines of the 21st Century for American foreign policy.

Yesterday Sebastian Mallaby penned a dizzy defense of the World Bank but in the course of which he highlighted a growing trend among powerful governments that is little understood by Americans -- and indeed by most people the world over. In arguing for the Bank's continued existence, Mallaby wrote:
Private investors tend not to finance global public goods -- projects that are important for the world but not a priority for any one country.
You might want to read the sentence a few times for the full import to sink in but I'll continue with the quote:
The world needs to cut carbon emissions, for example, but an individual country won't capture all the benefits of a clean coal plant, since these benefits are shared globally. Because of this "externality" problem, there is a role for the World Bank in subsidizing anti-carbon policies.(1)
Mr Mallaby is saying that the development needs of sovereign nations are not necessarily in synch with initiatives that the most powerful nations deem good for the world. This argument has been gaining steam for more than a decade in the European Union and the United Nations.

Implementing the argument has not been successful. Thus, the World Bank is now seen by governments that want to globalize certain initiatives as one means to integrate the response of developing nations to "external" issues, whether or not the nations can afford "global good" projects.

This use for the World Bank is a long, long way from the Bank's charter and intention, which is to service sovereign nations. Yet when you clear away all the smoke surrounding the attacks wafting from Europe about Wolfowitz's tenure, you find that little fire we can term "redoing the Bank's charter to accommodate global good projects."

So. Americans are not on target when they charge that the Europeans are out to get Wolfy because they want a European to lead the Bank. Honestly and truly, the Europeans who are leading the charge don't care whether someone from Mars is the president. What they want is a president who will pull the Bank in the direction of projects that are not country specific but which address external needs that the UN deems to be for the greater good.

Leave aside whether or not we agree with the goal; is Wolfowitz capable of managing this kind of transition? Yes and no. There is a litmus test to determine whether a person can get along at the World Bank:

If you can reply, "As you wish" to a directive without giving away in the memo, or to those in earshot, what you intend to imply by the remark, you are qualified to work at the Bank.

Paul Wolfowitz flunked the test, as did the Americans he brought into the Bank as his assistants. In 2005 I thought he was doing well at learning Bankese but from all accounts, he learned the lingo in the way a tourist in France speaks French by reading a guidebook of terms. In any case, learning pronunciation is only a part of getting along at the Bank.

The other side of the story is that the people who most want him out of the Bank are studiously overlooking a crucial point: if they want the World Bank to lead in externalizing project benefits, now more than ever there must be a lid on corruption. Why? Because if a government doesn't find the loan to be of immediate value to their country, why should they invest in closely monitoring the Global Good loans?

So Paul Wolfowitz has the right vision but things went horribly wrong at the implementation stage. Maybe he would say that you can't term a rocky path as a failure. My heart is with that argument but in the long run we'll all be dead. If you don't have things moving within a couple years in the business world, you need another approach.

My only advice to Wolfy at this time is to observe that when you don't understand the lay of the land, you can only fall back on playing yourself to the hilt if you insist on staying. Wolfy is very forceful and uncompromising in his approach, which is why I suggested a hunger strike and chaining himself to his desk during his fight to remain World Bank President. While he's subsisting on vitamins and water, he can remember that every day he fights on is another day that news about the World Bank will be on the front page of major newspapers. Which is exactly where discussions of the Bank need to be.

1) Endgame at the World Bank by Sebastian Mallaby, May 14, 2007, The Washington Post.

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