Democracy Gone Astray

Democracy, being a human construct, needs to be thought of as directionality rather than an object. As such, to understand it requires not so much a description of existing structures and/or other related phenomena but a declaration of intentionality.
This blog aims at creating labeled lists of published infringements of such intentionality, of points in time where democracy strays from its intended directionality. In addition to outright infringements, this blog also collects important contemporary information and/or discussions that impact our socio-political landscape.

All the posts here were published in the electronic media – main-stream as well as fringe, and maintain links to the original texts.

[NOTE: Due to changes I haven't caught on time in the blogging software, all of the 'Original Article' links were nullified between September 11, 2012 and December 11, 2012. My apologies.]

Monday, April 02, 2012

Can the World Bank Be Transformed?

The election of the next president is important, but so, too, will be fundamental change to the bank's institutional structure and its relationship with the BRICS countries and the Global South.

There are three candidates left standing for the World Bank presidency, including two non-Americans. Now, they are proceeding directly to the final, and nominally “transparent,” step: private interviews with the World Bank executive board.

The choice for president is always important, but even more so this time around. Members of the executive board must ask themselves what sort of World Bank is needed in this post-Washington Consensus, BRICS-ascendant, era. Too big to fail – or even, as now, to atrophy – it is clear that the bank must play a more focused role in fighting for inclusiveness and sustainability in the development process. But what should the board be looking for in an innovative and inspirational leader? Are the old “owners” – the United States and Europeans – and the board itself, really ready for change? Or is all this a charade that will simply return us to business as usual?

The signals are confusing. U.S. President Barack Obama has cleverly finessed the process, rejecting the conventional wisdom of selecting a banker or a politician. All who feared the new president might be Larry Summers can relax. Instead, Obama nominated Korean-born Jim Young Kim, a university president who co-founded a major health NGO and is a development practitioner. Whether that “concession” truly earns the Americans the almost inevitable coronation remains to be seen.

This choice will certainly confound those conservative finance ministers, in both the Global North and South, who ultimately control the board’s votes and are generally looking for another “safe” neo-liberal thinker. Indeed, Canadian Finance Minister Jim Flaherty publicly endorsed Kim the very day of his nomination. But can a candidate who is admirably suited to run the Global Fund (for HIV/AIDS and Tuberculosis) actually reform an institution built around the thinking of macro-economists? Or will he be bullied into accepting their assertive, if dated, recipes? Will he have the clout to push back when U.S. politicians or Treasury officials try to block needed change with threats to cut funding for the world’s poorest?

Interestingly, the two candidates from the Global South are much closer to the U.S. Treasury’s conventional wisdom about what makes a “safe” nominee for the presidency. Ngozi Okonjo-Iweala is an experienced Nigerian Finance Minister and a very senior World Bank insider. José Antonio Ocampo is a renowned Columbia University economics professor, the head of a major UN agency, and is semi-exiled from his native Colombia. He might at least poke the odd neo-liberal in the metaphorical eye.

However, no candidate seems to be the inspirational leader the bank needs today.

Unfortunately, the South seems badly organized to press its interests, even in this modest but symbolically important competition. We talk of a multipolar world, but the poles lack cohesion. So far, the BRICS countries have largely acted as individual agents. True, they just held a formal summit and agreed to study the feasibility of setting up their own development bank, but they still seem to lack the will to build a working consensus – one with real alternatives – to carry into global fora such as the G20 or the World Bank. Even as Europe presses the BRICS to help rescue it from its financial crisis, there is no plan or campaign to lever such support into greater influence in the Bretton Woods Institutions such as the World Bank and International Monetary Fund.

The southern interest should be on the pressing needs of low-income developing countries and the challenges of greater inclusiveness in today’s emerging economies. Indeed, the principal policy question World Bank board members might pose to the candidates would be: In your view, what changes are needed in the institution to achieve greater effectiveness in responding to its core mission of poverty reduction?

To many otherwise sympathetic observers, the bigger challenges for the World Bank are not those of policy, but rather of practice and institutional structure. Over the years, for reasons of institutional arrogance or well-justified impatience at the lack of effective institutional alternatives in the UN system or the world of bilateral donors, the bank has taken on many new mandates, including the creation of dozens of special-purpose trust funds. Accordingly, a second key interview question could be: How would you address this “mandate creep” and strengthen institutional focus? How would you drive that change?

The third important interview question for an aspirant bank president involves the human factor. There is a lot of inertia in the bank’s middle-management culture. These officials, as much as a president, set the institutional mindset and tone. Not only does the bank have an American chief executive, but about a quarter of its senior staff are Americans. Also, many of the bank’s staff who are from developing countries are graduates from American schools like Harvard and MIT. So, the fourth board question might be: How will you shift the internal culture to one where decisions are increasingly made by people who have really experienced the South, on the ground, in both its rural and urban communities?

Of course, much more must be done after the election of the new president. The board should devote attention to building more appropriate and effective internal governance processes, giving priority, especially, to broader, shared ownership among member states and a stronger southern voice. How, for example, can Italy nearly outvote China, as is currently the case?

Finally, the Global South must internalize the lesson that a passive approach is not optimal for asserting its agenda for global governance. Southern countries need a patient but persistent strategy, building coalitions that can campaign and lobby for policy and institutional change, often to counter western protection of a comfortable status quo that no longer can, or should, be sustained.

Original Article
Source: the mark news
Author: Edward Jackson and John Sinclair

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