Palace Coup? World Bank Vets Pick Okonjo-Iweala

News is becoming sparser as most of the Christian world slows for the Easter holidays. However, in the run-up to the selection of the next World Bank president which should happen in a fortnight or so, we've had ringing endorsements of Nigerian Finance Minister Ngozi Okonjo-Iweala. (See a previous post for further ruminations.) We begin with an interesting counterblast to the current climate of economist-phobia at development institutions post global financial crisis. While it may be trendy to put non-economists at these institutions, the Economist (surprise!) slams this trend in endorsing her as the best candidate for the job:

Okonjo-Iweala is an orthodox economist, which many will hold against her. But if there is one thing the world has discovered about poverty reduction in the past 15 years, it is that development is not something rich countries do to poor ones. It is something poor countries manage for themselves, mainly by the sort of policies that Ms Okonjo-Iweala has pursued with some success in Nigeria.

While I am nowhere near as partial to economists as a publication dedicated to them in name, I did enjoy the insinuation that the United States which encouraged World Bank lenders to avoid corruption was doing so by choosing its favoured candidate to yet again fill a top (international) job.

Meanwhile, the Financial Times seconded the motion, accentuating the positives of extensive work at the World Bank:

Its new leader should have a command of macroeconomics, the respect of leaders of both the funding and the funded countries, and the management skills to implement his or her vision. These requirements make Ms Okonjo-Iweala the best person for the role.

Having served as managing director under outgoing World Bank president, Robert Zoellick, she also has a unique knowledge of how the institution works. While one risk could be the temptation not to challenge the status quo, she might find it easier than other candidates to gain the respect of staff and build on Mr Zoellick’s legacy.   

More importantly for me, however, is that many World Bank veterans have come out in a strong show of support for Okonjo-Iweala. Lest you think that its employees don't matter, remember how the Ameriscum Paul Wolfowitz was eased out as World Bank president even during the Bush administration. From the Vanguard of Nigeria:

As the World Bank gets set to interview the three candidates vying for its presidency from April 9-11 before announcing its decision the following week, a group of former World Bank officials, including one-time chief economist, Francois Bourguignon, said it supported Nigerian Finance Minister, Dr Ngozi Okonjo-Iweala’s candidacy to become the lender’s president even as Governor of Central Bank of Nigeria, Mallam Sanusi Lamido Sanusi said Nigeria’s nominee was the best candidate for World Bank top job.

The 39 former managers, in a letter to the bank’s members, cited Okonjo-Iweala’s “deep experience in international and national issues of economic management” and said she had the ability to increase the bank’s effectiveness. Okonjo-Iweala, who was a managing director at the bank until last August, “would hit the ground running and get things done from the start,” the letter said.

According to the former World Bank officials, “challenges for the future president range from international fundraising to brokering agreements on global issues and while all the three presidency candidates, including former Colombian Finance Minister Jose Antonio Ocampo, have strong qualifications, Okonjo-Iweala’s skills cover the full spectrum of criteria. Uri Dadush, a former World Bank director of policy and one of the 39 signatories, provided a copy of the letter.

Before concluding I should also point out that an assortment of heterodox economists (including the LSE's own Robert Wade)--many from the Global South besides--signed on to a similar petition for the Colombian candidate Jose Antonio-Ocampo. Although they're both long shots given the history of the institution in question, Okonjo-Iweala is more of an insider to it and Ocampo an outsider.

Still, the IPE Zone comes down in favour of Okonjo-Iweala if previous merit is the criteria. Nevertheless, what's obviously fascinating about the succession race is that it not only pits vested Western interests against rising ones from the Global South but it is also a trial of sorts for mainstream economics' place in development practice. Go ask Jagdish Bhagwati.