At the World Bank, Americans Need Not Apply

The Future of American Power
March 23 2012 11:06 AM

At the World Bank, Americans Need Not Apply

Kim nominated by Obama
President Obama shakes hands with newly announced nominee for president of the World Bank, Dartmouth College President Jim Yong Kim, for president of the World Bank as Secretary of State Hillary Clinton and Treasury Secretary Timothy Geithner look Friday.

Photograph by Win McNamee/Getty Images

There are times when living up to one’s rhetoric is the path of least resistance. Consistency, in economic policy, foreign affairs, and other politically tinged endeavors, is an overrated quality.

Michael Moran Michael Moran

Michael Moran is an author and geopolitical analyst.

Nonetheless, when something self-affirming can be accomplished without damaging national interests, it should be embraced. The debate over whether the U.S. will continue to insist that its monopoly on leadership of the World Bank is a classic of the genre. The decision to essentially thumb its nose at the rest of the world and nominate an American is short-sighted. 

Advertisement

Since the creation of the two global lenders of last resort—the World Bank and International Monetary Fund—in the years just after World War II, a gentlemen’s agreement between the U.S. and Europe essentially ensured that a European would run the IMF and an American the World Bank.

Bestowing—and that is the word—such power on the G6 may have made sense in 1975, when the grouping (U.S., Japan, Germany, U.K., France, and Italy) made up 85 percent of global GDP. But today, the world has changed enormously. With European nations looking to China rather than the U.S. for help weathering their sovereign debt woes, does it make sense to perpetuate this “fix” at the top of the bank?

Certainly, the U.S. nominee, Jim Kim, is qualified to lead the bank. The Dartmouth professor is no economist—but that's not a requirement of bank leadership. He's a great deal better than some other past choices who seemed to have won the job primarily because the U.S. president of the day had tired of the disastrous effect the person was having on American policy (Paul Wolfowitz and Robert McNamara come to mind).

Some Americans also argue that Europe, and not Washington, should be the first to relinquish the traditional lock on these top financial slots. The U.S., after all, hasn’t really lost much of its own share of global output when compared to Europe, which  has gone from about 35 percent of global GDP in 1970 to just about 26 percent today.

Europe shrugged off such pressure last year, and Washington apparently feels that gives it the cover it needs to do the same. Only last summer, in the wake of the spectacular flame out of the IMF’s playboy director general, Dominique Strauss-Kahn, that institution not only reaffirmed Europe’s prerogative but even nominated DSK’s compatriot, Christine Lagarde, for the post. The argument that she would be the first female to occupy it doubtless left BRICS and other rising powers cold.

Yet Europe’s imperiousness last year is no excuse for the U.S. to live in the past. Even if the case for an American at the top of the World Bank is slightly stronger, the principle is equally flawed. No country has done so much to raise expectations of genuine global democracy as the United States—indeed, we created the U.N., the Marshall Plan, and the banks that grew out of these post-war reconstruction schemes.

So Obama missed a chance to lead from the front. It wouldn't have won him any points at home—think Jimmy Carter and the Panama Canal—but playing the long game makes sense sometimes, and by insisting on an American nominee, he's hardly won over any of his critics.

Alllowing a World Bank president to ascend from the world that is most relevant to the bank's charter—the developing world—would have shown that Obama understands that the West no longer has any lock on the talents needed to drive intelligent global development and fiscal policy from the World Bank’s executive suite. If anything, the West’s dogma gets in the way of designing intelligent packages that meet the needs of countries that are in different stages of development than, say, the requirements of a bankrupt so-called advanced economy like Italy or Greece.

TODAY IN SLATE

The Juice

Ford’s Big Gamble

It’s completely transforming America’s best-selling vehicle.

Should the United States Grant Asylum to Victims of Domestic Violence?

The Apple Watch Will Make Everyone Around You Just a Little Worse Off

This Was the First Object Ever Designed

Don’t Expect Adrian Peterson to Go to Prison

In much of America, beating your kids is perfectly legal. 

Moneybox

How the Apple Watch Will Annoy Us

A glowing screen attached to someone else’s wrist is shinier than all but the blingiest jewels.

Music

A Little Bit Softer Now, a Little Bit Softer Now …

The sad, gradual decline of the fade-out in popular music.

Is Everyone Going to Declare Independence if Scotland Does It? 

I Tried to Write an Honest Profile of One of Bollywood’s Biggest Stars. It Didn’t Go Well.

Trending News Channel
Sept. 12 2014 11:26 AM Identical Twins Aren’t Really Identical
  News & Politics
Jurisprudence
Sept. 14 2014 2:37 PM When Abuse Is Not Abuse Don’t expect Adrian Peterson to go to prison. In much of America, beating your kids is perfectly legal. 
  Business
Moneybox
Sept. 12 2014 5:54 PM Olive Garden Has Been Committing a Culinary Crime Against Humanity
  Life
Inside Higher Ed
Sept. 13 2014 8:38 AM “You’re More Than Just a Number” Goucher College goes transcript-free in admissions.
  Double X
The XX Factor
Sept. 12 2014 4:05 PM Life as an NFL Wife: “He's the Star. Keep Him Happy.”
  Slate Plus
Behind the Scenes
Sept. 12 2014 5:55 PM “Do You Know What Porn Is?” Conversations with Dahlia Lithwick’s 11-year-old son.
  Arts
Music
Sept. 14 2014 11:44 PM A Little Bit Softer Now, a Little Bit Softer Now … The sad, gradual decline of the fade-out in popular music.
  Technology
Future Tense
Sept. 12 2014 3:53 PM We Need to Pass Legislation on Artificial Intelligence Early and Often
  Health & Science
New Scientist
Sept. 14 2014 8:38 AM Scientific Misconduct Should Be a Crime It’s as bad as fraud or theft, only potentially more dangerous.
  Sports
Sports Nut
Sept. 12 2014 4:36 PM “There’s No Tolerance for That” Pete Carroll and Jim Harbaugh say they don’t abide domestic abuse. So why do the Seahawks and 49ers have a combined six players accused of violence against women?