Jeffrey Sachs

With Larry Summers' World Bank Bid in Trouble, Mexico Insists on Open Process

Early last week the New York Times reported that despite all the previous fine rhetoric about the G20 and consultation and open process, the US Treasury Department had decided to rule by decree and impose its own candidate for the next president of the World Bank, the G20 be damned. U.S. officials informed G20 officials that the US intended to "retain control of the bank," as the Times put it. According to the Times, the G20 countries grumbled but showed no sign of being willing to fight Treasury. The U.S. candidate would be a "lock," the Times said, "since Europe will almost certainly support whomever Washington picks."

 

Since the International Monetary and the World Bank were created, the US and Europe - which control around half of the voting shares of these institutions - have colluded behind closed doors to determine the institutions' top leaders, with Europe selecting the head of the IMF with US support and the US selecting the head of the World Bank with European support. In recent years, developing countries have complained loudly about this practice - a practice which would be illegal if the World Bank were subject to the Illinois Open Meetings Act - and under pressure the World Bank has adopted governance reforms that are supposed to guarantee an "open, merit-based process" in selecting the President. But Treasury was claiming that there wasn't going to be any open process, it was going to be Treasury diktat.

But over the course of the last few days, the world has changed.