Finally, Wolfie Will Leave

19 May

, and the World Bank needs reform even more than a new executive. 

According to :

"Given the way that Paul Wolfowitz has left the World Bank—through behind-the-scenes political pressure—the Bank has shown that it continues to lack transparency and avoid institutional accountability for an episode that also involved the Bank’s executive board," says Vasquez. "The lack of accountability is a central problem with World Bank lending as well. Independent audits of Bank aid are not allowed, but a high proportion of loans support failed projects for which Bank officials are not held responsible."

He concludes: "We should not expect the Bank’s institutional culture of little accountability to change. Wolfowitz’s departure may have been justified, but his leaving had more to do with the bureaucracy’s resentment of his role in the Iraq war and his internal reform initiatives, than about his lapse of ethics."

Regardless, :

But the next president will not have much time. He will arrive in the middle of a campaign to coax new money from donors; the very governments that last month fretted openly about the bank’s credibility and reputation. He will need to raise at least $25 billion this year just to keep the bank’s aid from shrinking in the medium term. Even before the past month’s controversies, some donors were balking at this bill. One or two European governments, Mr Wolfowitz thought, saw his troubles as a convenient excuse to renege on their financial commitments.

A bigger worry must be America. It remains the bank’s single biggest contributor, stumping up almost 14% of the money the last time the begging bowl was passed around. Given the tenacity with which it fought for its man, one might assume the White House cherishes the institution he led. In fact it cares little about the bank, and knows even less. The armistice it agreed on May 17th might have arrived sooner, but Mr Wolfowitz’s former colleagues seemed to put personal loyalties above their country’s interest, let alone the bank’s. Now some of the agency’s more hysterical critics think it has fallen to a European coup. The risk is that Mr Bush will take revenge by steering America’s money elsewhere.

That would further undermine the bank’s place in the world. It is already losing its most lucrative customers—such as Brazil and Mexico—to the capital markets, which now rush in where once only the bank dared to tread. And it faces stiffer competition for aid dollars from other, more fashionable conduits for generosity: the presidential plans, millennium accounts, global funds and so on.

For all his billing, Wolfowitz is a flop! If President Bush is going to pick another winner, let the Europeans select all the staff!

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