Will this time be different?

Robert Zoellick's announcement that he will not seek reelection as President of the World Bank has led to a media frenzy about who should be the next chief. Demands are growing to break the 68-year old tradition of automatically selecting an American as the next head of the World Bank.
The Bank's 25-member Executive Board said it will accept nominations until March 23. Three candidates would be selected for interview. The Board wants to finalise its' selection by the time of the April 20-22 Annual Meetings of the World Bank and the International Monetary Fund (IMF).
Beginning in the late 1990's, confronted with the fall of communism, the Bank began an intense process of self-reflection. This opened the way to interesting new fields of operations, such as governance and anti-corruption, in addition to the traditional role of providing aid and loans. But the changes were incremental, and deeper questions about the organisation and its governance were never addressed. Two major organisational challenges face the World Bank today. First, structure and internal function; and second, governance reform.
With the majority of its professional staff located in Washington, DC, consisting of life-tenured experts and countless consultants, the Bank needs to reorganise its workforce. This would help to overcome the rigidities that affect the organisation. Furthermore, the organisation, conceived first and foremost as a bank, is still the turf of economists and finance specialists, even though lending operations are gradually losing importance within the Bank. In order to function more efficiently, a decentralised, and, most importantly, flexible workforce should be among the Bank's top priorities.
Moreover, a lack of inertia impedes the organisation. This requires governance and management reforms. Take China as an example. A key development player and the world's second-largest economy, China still accounts for less than 5% of the Bank's voting shares, while the European Union controls around 37% and the United States holds 16%. With eight Europeans on the Bank's 25-member Executive Board, the Bank remains a poor reflection of today's emerging world order.
The Bank's major shareholders also face another important choice. Emerging markets, including the BRIC countries, rightly demand a greater voice in running the Bank, especially if the Bank's focus shifts towards global public goods. But if the US and European countries are unwilling to give up control, the system of official international financing established by Bretton Woods in 1944 will become increasingly fragmented. Many of the leading emerging markets, like China and Brazil, may decide to go on their own. This would have negative consequences for multilateralism.
Over the last few decades, a number of emerging markets have achieved significant economic growth. The list of their development successes is growing. This means that many of these countries have already graduated, or in the near future will graduate, out of the need for concessional lending from the Bank. Also, easier access to private finance will force a re-evaluation of the methods and magnitude of the Bank's non-concessional loans.
These daunting challenges mean that the World Bank's next president will have to be someone whose primary task is to initiate and sustain change while commanding support and legitimacy across the Bank's membership. He or she will also require a demonstrated capacity for political leadership and a core conviction that the Bank needs a new vision and path forward. The new president should understand that development is more than a growth in overall economic activity measured by GDP. So where could the Bank find such a leader?
The next World Bank chief shouldn't be selected in a behind-the-scenes stitch-up. Certainly, selection criteria should include understanding and experience of the concerns of developing countries. A candidate from an emerging market would be a welcome change.
But who could that be?
Last week Prime Minister Sheikh Hasina proposed Professor Yunus's name. He would have been a formidable candidate. But he has declined to be considered. A number of other names have also been floated -- Lula da Silva of Brazil, Ernest Zedillo of Mexico and Ngozi Okonjo-Iweala of Nigeria -- to name a few.
There is no guarantee that a non-American will be selected to head the Bank, although China, Brazil and other countries with growing economic clout have been exerting pressure for a change in the US-European arrangement of controlling the top positions in the World Bank and IMF, respectively.
But the forces perpetuating the status quo -- European and American resistance to change and emerging-market countries' passivity and lack of unity -- remain powerful. This was evident last year during the selection of Christine Lagarde to head the IMF. Election-year politics in the US will strengthen these forces further, with President Barack Obama's administration unlikely to relinquish a symbol of global power, which would invite Republican opponents' charges of weak leadership.
It seems implausible that the World Bank's clients -- the countries that have to live with its policies and programmes -- have little say in who leads this institution. With a new international economic architecture emerging, the Bank needs a different selection process that would help to choose the most qualified person, regardless of nationality. Such a leader should be able to carve out a new role for the Bank in a globalised and interconnected world.
So, will this time be different? Most likely, no.

The writer is a Professor and Chair, Department of Economics, Marquette University. E-mail: [email protected]