The next president of the World Bank will be American. This does, alas, seem inevitable, however undesirable is the continued insistence of the US and the Europeans on retaining by right the ancien régime at the Bank and the International Monetary Fund. That need not be the end of the matter, however. It would be possible to create a new position of president of the International Finance Corporation, the World Bank Group’s arm for lending to the private sector, and then throw that open to global competition. That would be a modest step. But it would be highly beneficial.
In the case of the World Bank, it is possible to make the argument that the US ability to nominate its head is a necessary condition for continued Congressional willingness to finance the International Development Agency, its soft-lending arm for the world’s poorest countries. The IFC is quite a different case. True, the World Bank’s president has always also been the IFC’s president. But this is not a legal requirement. The IFC’s executive vice president – its head – has also always been a European. But it would be relatively simple to open the job to global competition. That shift would be made far more meaningful if the new head of the IFC were also to be appointed as its president.
By coincidence, the top job at the IFC will be open in a few months when the tenure of Lars Thunell, the Swedish executive vice-president and chief executive officer, comes to an end. Making his replacement president and throwing open the job to genuine global competition would bring big advantages: it would start to break the outdated monopoly of Americans and Europeans over the jobs at the head of the IMF and the World Bank; it would give independence to a significant institution that, unlike the Bank, has a relatively clear mandate: that of promoting the private sector in developing countries; and, finally, it would make the new position more prestigious and so the significance of the move to open competition greater.