Source: Financial Times

As it begins the search for a new president of the World Bank, the Obama White House risks repeating the very same mistakes that all too often in the past have led to the wrong person being appointed.

Every time this process begins, those in charge ponderously – and mendaciously – announce it will be “open, transparent and merit-based”. They know this is not true, as some of the best candidates are automatically disqualified: only US citizens connected to the occupant of the White House at the time are considered and the process is closed, and only tenuously determined by merit.

The reason is, as is well known (and regularly and futilely derided), that leadership selection for the World Bank and the International Monetary Fund is based on a shameful colonial arrangement whereby the bank’s boss is always American and the IMF’s always European. And this will not change until new powers, such as China, India or Brazil agree to join forces to end it – which is not on the cards for now.

So how might this flawed process be reformed? In the past, it has led to the appointment of candidates who knew little about the bank. The consequences were confusion over its mission and obstacles in the way of providing assistance to countries in need. This is partly the result of the fact that those in charge of making – or influencing – the decision often base it on wrong notions about the ideal background of the Bank’s president. For example:

1. The World Bank is a bank and thus its leader should be a banker. No! The Bank is more than a bank. It is a consulting company for developing countries, a multilateral organisation, an intensely political entity as well as a highly technical one. Its role as an international lending bank is declining relative to its advisory role.
    
2. Its leader needs to be a politician with access to the US President and a stellar Rolodex. No! Being chums with the president and other heavyweights of course helps. But just having access to power without also having a vision for the institution has been disastrous. The World Bank is first and foremost a development agency that tries to foster change in poor countries, a mission that is difficult for experienced hands and impossible for the inexperienced. Hoping for “on-the-job-training” for appointees with scant experience in development has been a common mistake that has cost the bank, its clients and shareholders dearly.
    
3. The candidate needs to be a development expert. No! Academics and development experts may be good at understanding the challenges and perhaps even recommending smart solutions. But unless they are proven, effective managers of complex, public-sector-like systems they will fail. If vision and knowledge are not backed up by good managing skills a tenure ends in failure. In this case you have to know how to get a large, culturally heterogeneous, technically sophisticated and, at times, recalcitrant bureaucracy to move in the direction you set.
    
4. It’s a multilateral organisation and so the head needs to be a diplomat. No! An instinctive diplomacy is critical of course, but few diplomats are sufficiently versed in economics, public finance and the other technical fields on which the bank’s core competence rests.
    
5. The bank is a global institution and it needs the CEO of a large multinational corporation. No! The bank is indeed an international institution, but its natural habitat – and the skills needed to survive and thrive in it – are closer to those found in a well-run public sector than in the private sector.

So, does all this means that only a superhuman can be successful? No. It means that Mr Obama should look for a professional who already knows this field, its ideas, players and traps, who has a vision for the World Bank rooted in practical experience with development and who has already run successfully a global organisation. This is not the time nor the place for “on-the-job-training”. Nor for paying back political favours.

This article originally appeared in the Financial Times.