Saturday, March 24, 2012

Why Ngozi Okonjo-Iweala should be the next head of the World Bank

by Lant Pritchett.

The US had a chance to lead. It abdicated that chance, to play domestic politics and put forward a US nominee who is manifestly less qualified to be head of the World Bank, than the alternative candidate nominated by African countries: Ngozi Okonjo-Iweala.

The World Bank is a full-service development institution that provides loans, grants and development advice to promote development, which is the transformation of countries towards prosperous economies that support broad based improvements in material well-being, democratic polities that respect citizen rights and respond to citizen demands, and capable administrations that allow governments to carry out their core functions: law and order, education, macro-economic management, health, infrastructure, regulation, security.

Therefore an ideal candidate should have:
  • Some experience in government and the process of policy-making (as the World Bank's clients are all governments);
  • Some acquaintance with economic policy and policy making: including the tough choices like allocation of resources across uses;
  • Some knowledge of finance (it is, after all, a bank that makes income from lending money);
  • Perhaps some management experience in a multilateral organization;
  • Exposure to the breadth of development issues.
Experience in Government.
Ngozi has been the Minister of Finance of Nigeria, twice. If one had to name a tough job in the world, I think that would be it. She did it first from 2003 to 2006 and by all accounts handled a very tough situation -- including tackling entrenched corruption -- in an admirable way. Jim (to be fair we'll use first names for both) has no experience in government. He has been engaged in development as an academic and through NGOs.
Advantage Ngozi.
Acquaintance with Economic Policy.
Ngozi has had training in economic development from MIT. Jim has been trained as doctor and anthropologist. Ngozi has been a Minister of Finance making budget allocations and dealt with the entire array of economic policies to promote growth and prosperity. Jim has worked exclusively on health issues (rightly, as he is a physician) and never been in position of responsibility about economic policy. Health was just one of many sectors for which Ngozi had to allocate budgets and promote performance.
Advantage Ngozi.
Knowledge of Finance.
Ngozi has been a Minister of Finance as such, among other things, she led the Paris Club negotiations that led to billions of dollars debt relief for Nigeria. Jim has no demonstrable experience in finance, banking, the private sector.
Advantage Ngozi.
Management Experience.
From 2007 to 2011 Ngozi was a Managing Director of the World Bank. She therefore has in-depth experience running a large and complex multi-lateral organization. Jim was director of WHO's HIV/AIDS department, from 2004 to 2006, and so has some experience in a multilateral organization. Jim has also, for two years, been president of an American university. But while Ngozi was near the top of a large organization dealing with all development issues Jim was responsible for one disease in an organization that does only health.
Advantage Ngozi.
Breadth of exposure.
There is a massive difference between doing development policy, and doing charity work to mitigate the consequences of the lack of development. Ngozi has done development policy in many settings and in many positions both in Nigeria and within the World Bank. Jim deserves praise for having devoted his time, attention and expertise in medicine to improve the health care for people in the developing world -- which is certainly one component of development -- but his development experience is limited.
Advantage Ngozi.
Passport.
Jim holds an American passport. Ngozi is a Nigerian woman.
Advantage Jim.
In this day and age, is that still really all it takes?

2 comments:

  1. I don't know why there is so much hue and cry over Western dominance of the IMF and World Bank, when it is only commensurate with the source of funding. Yes, the income of these institutions does come from loans in developing countries, so, its not just a matter of source of funding. But, even allowing for that, it should not be surprising. The better question to ask is, why are Western countries still the majority sources of funds in this day and age? And, the goal of Nigeria should be to use the talents of Ngozi to remove dependence on the World Bank. I'm pretty sure the role of the World Bank can only be minor to what Nigeria can do for themselves, if they want to, that is. Its not tough for a developing country to attract funds these days. There is just a staggering sense of entitlement going around everywhere one looks - in developed countries its about social security and in developing countries its about access to markets, technology and institutions of developed countries.

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  2. I read somewhere, that (even in today's day and age) World bank belongs to the United States and the IMF to the Europeans.

    As much as one dislikes it. they do rule the (economic) world !

    So yes, while Ngoz may be a better candidate for the world bank, in your opinion.

    In my opinion, Jim is not a bad choice. more so since I dont think the head of the world bank can decide anything against the domestic political master of US of A, even if on the face of it, world bank is an international body !!

    Saurabh

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