Despite the best efforts of the Financial Times and just about everybody who works at the World Bank, Paul Wolfowitz is still in charge of the global lending (and ostensibly poverty-fighting) institution. He’s also hired Bob Bennett (Bill Clinton’s lawyer back in the day) to joust on his behalf and has promised, in the helpful words of the Washington Post, “unspecified changes in his leadership.”
As this thing drags on and on, I can’t decide whether it reflects more badly on Wolfowitz or on the World Bank itself. Former IMF chief economist Ken Rogoff and World Banker turned World Bank critic William Easterly have both weighed in on the subject recently. Both seem to think that (a) the World Bank is seriously messed up but (b) Wolfowitz is the wrong guy to fix it.
I am sympathetic to the Bush administration’s desire to catalyze change at the Bank. I have long advocated shifting the Bank’s centre of gravity from lending to outright grants, a policy that the Bush administration strongly endorses. But choosing someone with no obvious background or experience in economic development was not the way to make progress on this front.
Wolfowitz came to the bank determined to fight corruption and perhaps redeem himself after Iraq by offering a compassionate, conservative brand of help for the world’s poor. But Wolfowitz’s program never really took wing. Trying to fight the corruption that all too often saps foreign aid was noble, of course. But bank staffers bristled because some corrupt regimes seemed to bother Wolfowitz more than others. Worse, his main objective — transforming bad governments into good governments — was simply unworkable.
Update: Bret Stephens has an interesting take on this in his column in the Journal today that’s not the usual full-on WSJ editorialista defense of Wolfowitz. And wonder of wonders, they’ve made it available for all to read.