The World Bank reappointment process

Kim had been a lame duck for some while, and few outsiders grasp how active is the role of the Board in the World Bank.  So it is probably good they got him out of there sooner rather than later.

I know you’re all aghast that Trump will pick the successor, but remember the good ol’ days when everyone fell apart when Bush picked Paul Wolfowitz, considered to be one of the architects of the Iraq War?  Whatever you think of Wolfowitz and his tenure at the Bank, it was not The End Times or even the beginning of the end.

It is very hard for a bad Bank president to shut down the works.  The World Bank has borrowed a lot of money and to pay it back the Bank needs to make profitable loans.  The mechanism for this to happen is already in place, and short of bankrupting the institution it is hard to imagine how a Bank president can totally gum up the works.  That is also why good Bank presidents find it hard to reform the place.

It is trendy to call for a “meritocratic” approach to this appointment and who could be opposed to that?  That said, there are plenty of plausible candidates ex ante, but it is not so easy to determine who will be effective ex post.  So if you read someone calling for meritocracy here, odds are they have some other political agenda in mind (which may be fine, but evaluate that agenda on its own terms).  There are plenty of Americans qualified at the highest level for this post.

I think America and yes DT should pick the next Bank president and should pick an American.  How do you think it is going to go the next time the Bank calls for more capital from the US and UK?  Whose certification there do you think is most important?  And which country is the most nervous about the World Bank doing something geopolitically unpopular, as say the UN repeatedly has done?  All this will run most smoothly if the U.S. feels, to some extent, that the Bank is its preserve.  And of course the “we’ve really got to up China’s quota and get it more involved” days are long since past.

You’re all out there saying Trump should not disengage America from the world, blah blah blah etc.  I agree.  But let’s be honest about what the terms of that engagement were in the first place, and be willing to swallow the whole package deal once again.

Here is some FT analysis, noting that not all of its suggested candidates are good ideas.

Comments

You mean Paul Wolfowitz. James Wolfensohn was appointed by Clinton

And amazingly, you can change just one word to make this exercise in punditry apply to a different president from a different party in a different decade - 'Whatever you think of Wolfensohn and his tenure at the Bank, it was not The End Times or even the beginning of the end.'

Though strangely enough, Wolfensohn was another one of those Australians who became Americans so as to ensure a place at a table generally reserved for Americans, just like Murdoch.

Get the world bank out of the U.S. and get the U.S. out of the world bank.

I think you mean Paul Wolfowitz, not James Wolfensohn.

A view from someone that has worked on World Bank projects but is too far from palace intrigue.

I contribute a little to a project funded by the World Bank. It's about hedging the risk in the development of geothermal well fields for electricity production.

The a public-private partnership is only for the risky drilling phase. It's risky because it's similar to oil, some wells work other's don't and they cost millions. During the electricity production phase, the plants will be 100% private.

The article says public-private partnerships end will the bank owning the risk and having no rewards. I thought this is precisely the mission of a development bank. A development bank is almost a charity and certainly a diplomatic tool. There are thousands of other banks specialized in the money making goal.

The project I know will end with an emergent economy country having large, cheap, reliable and environmental friendly power plants. Even if higher interest payments don't go to the WB or the local government doesn't get taxes or partially owns the facilities.....there's some value on a few million people having reliable electrical power, right?

Neat project. Let us know as it progresses.

It wasn't me ;) http://projects.worldbank.org/P151739?lang=en

The article says public-private partnerships end will the bank owning the risk and having no rewards. I thought this is precisely the mission of a development bank. A development bank is almost a charity and certainly a diplomatic tool. There are thousands of other banks specialized in the money making goal.

I think this is what Cowen is getting at. He seems to think it's better if the United States is seen as the one leading the diplomatic effort. Based on his other posts, this seems to come from concern that if the USA does not do this sort of thing, then illiberal China and Russia will take over the world. I leave it to others to judge how realistic that perspective is. I myself don't know what to think.

Not so long ago Tyler posted about the TAZARA railway in Africa funded by the Chinese in the last years of Mao.

Won't Trump prefer a banker who makes bad loans, then stiffs the people buying bonds or capitalizing the bank?

It was the lack of such banks that forced Trump out of real estate development into branding and rent seeking.

Looked, scanned their report. They do about 30 billion in loans per year. They subsidize, naturally,which causes due process issues. their priority list is subject to review. Highly restricted compared to capital flows in the private sector to developing nations,that will be in the trillions, swamping World Bank. World Bank is not career, more like being drafted.

Just a reminder that it's tradition only for the head of the WB to be American and the head of the IMF to be European. If Europe tries to break that tradition with the WB, the consequences to trade may be severe, like throwing gasoline on a cinder. Also a reminder that Ivanka Trump should have a favorable view of the WB, the Bank at her urging having adopted a program for lending that targets women in developing countries. She may have a positive influence on DT in the selection process. Also, DT has said favorable things in the past about Kim, suggesting that DT isn't entirely opposed to the WB.

Kim was a controversial pick himself, coming to the job with a background in public health rather than finance or diplomacy.

What does the statement “And which country is the most nervous about the World Bank doing something geopolitically unpopular, as say the UN repeatedly has done” mean? I suspect both advocates and opponents of Trump’s foreign policy would agree that it says the US should not and does not care about geopolitical popularity at all. The risk that a multilateral institution would do something geopolitically unpopular seems to be heightened by being under the full control of one nation that wants to use it to pursue its national interests instead of the common interests of all members.

And what repeated geopolitically unpopular actions of the UN does this statement refer to? The UN is overwhelmingly popular in most countries including the United States: http://www.pewresearch.org/fact-tank/2016/09/20/favorable-views-of-the-un-prevail-in-europe-asia-and-u-s/

There's a Canadian going spare at the Bank of England. Would he do?

Even better, ignore bankers. That strange marxist cove who was the finance minister of Greece seems, oddly, to have a better grip of what goes on in the world than most. Give him a go.

"I know you’re all aghast that Trump will pick the successor"

No, not really. As erratic Trump is personally, he hires quite competent people to work for him. A real nice change of pace.

Just like Scott the Telephone Booth Pruitt, Rick Felon Gates, and Paul Collusion Manafort?

Manafort was part of the campaign for a short time. Pruitt was pretty good. Name a post where Trump's pick wasn't better than the person they replaced. Devos is very good, Nikki Haley was awesome. Mattis, Kelly... I wish he's just keep them around longer. Too much turnover.

'Pretty good' at what? Corruption? Destroying what he was mandated to protect?

Come on man, this kind of partisan bullshit is as dumb as the libs saying how awesome AOC is.

And that turnover is the good ones leaving, not Trump choosing not to 'keep them around'. Mattis and Kelly got the hell out of there. His worst firing was Yellen.

Trump's nepotism is pretty much proof that he can't get good people to work for him.

Yep. Does anyone actually like the man? He has no friends, his own wife disdains him. Dude's a miserable SOB, I don't think I've ever seen him laugh with true humor or joy.

How have we gotten to confusing Paul Wolfowitz and James Wolfensohn so soon?

I know you’re all aghast that Trump will pick the successor,

I'm aghast the World Bank exists. With all the public and private grants, public and private credit, and private sector philanthropy, there are no "un-serviced" niches out there; just boondoggles so bad they still can't attract any of the trillions in public and private spending.

The World Bank has borrowed a lot of money and to pay it back the Bank needs to make profitable loans.

If the World Bank needs to make profitable loans then it can duke it out in the free market with everybody else. Anybody who loans money to the World Bank is just rent-seeking.

Tyler is one of libertarians who love large, state-sponsored bureaucracies which attempt to micromanage economic activity. If those bureaucracies can meddle in foreign countries, so much the better. I know it makes no sense, but it's hard to maintain intellectual coherence in the contemporary academy, and Tyler has failed in the attempt.

Yeah. It's funny the things that pass without comment. State licensing boards for barbers are a crime against nature but let's discuss which apparatchik gets to run an opaque, anti-market, international bureaucracy.

Or how price caps on plywood and fuel after a hurricane will get you laughed out of the room but a central committee pricing bank and government credit is the Lord's work.

>"you're all aghast" .... "everyone fell apart" ....

Serious question, Tyler:

At any point during a typical day of yours, do you ever speak to an adult who did NOT vote for Hillary?

I know I don't pay you any rent here in your head, but could you keep it down? It's so empty here that your blather makes loud echoes.

The loud echoes are distracting my detailed planning on how to jump start my election campaign. For some reason, no one wants to seriously consider my candidacy. Even though it's clear that I am the most qualified.

#StillWithHer

U.S. should sever all ties to the World Bank.

World Bank credits are really not loans at all, but instead a very peculiar form of foreign aid underwritten by private debt.

World Bank's paid-in capital is a tiny fraction of the total loans and guarantees outstanding, normally about 10% of total assets -- the difference being financed by private obligations issued in dollars and other currencies. The World Bank has only rarely had a positive net-cash flow from its clients, meaning that the loans are never really repaid in an economic, accounting sense. Consequently, the World Bank's balance sheet continues to expand as member nations are forced to pay in new capital and accept responsibility for much larger "callable" capital contributions in the future.

U..S. government is technically bankrupt and unable even to enact basic formal budget structures for past 22 years .... thus, supporting a frivolous unproductive bureaucracy like the World Bank is absurd.

The guy spells it as "Forrest Management," but sure, picking a World Banker he'll be great.

Trump should appoint Dambisa Moyo.

Trump should appoint Jared Kushner. #MAGA2020

That would certainly be the maximum looting appointment.

I didn't read thru the linked thread but a Jan 7 2019 post *claiming* a rumor exists that Kim's been job hunting "for some while" is considered reliable evidence in who's world? (I hope not TC's, but it seems so.) Man, keep this up TC, and your fairly reliable blog will not be...you DO know the difference between gossip and fact, right?

"Your brush is amazingly large as it attempts to paint everyone the way you wish to see them to score some sort of rhetorical point, apparently"

Best satire poster on the internet

Thanks - enjoy the lab grown veal, Prof. Cowen will be here for the foreseeable future.

And don't forget to donate to keep those Conversations coming.

Talking about you, genius.

Oh the irony.

But it seems as if adapting an old fashioned schtick, with a couple of updated references - lab grown, for example - went over the heads of those not able to appreciate the best satire poster on the internet.

'I’m here all week, try the veal! This line is very much in the style of a line that a stand-up comic in an old Borscht Belt hotel would have cracked. The “Borscht Belt” was a series of hotels in New York State’s Catskill Mountains that were summer vacation destinations for a Jewish audience from New York City and the Tri-State region. These hotels all featured live entertainment and organized social activities, along with a stupendous food menu offering meals all day long. In this regard they resembled stationary cruise ships. The comedians would snap off this line or one like it after delivering a joke that failed.' https://www.quora.com/What-is-the-root-of-the-cultural-reference-Im-here-all-week-try-the-veal

Guess it is time to hand back that best satire poster award.

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