Thursday, June 07, 2007

On the Selection of the President of the World Bank: A Reverie on Law, Democracy, and Power

A certain segment of global political elites have had much to celebrate recently when it comes to the World Bank. They have managed to force Paul Wolfowitz out of his position as World Bank President.

The factual basis of for the resignation--an ethics violation involving Wolfowitz's girlfriend/partner at the time--was a set up. "The officials said the bank's board had hoped to accept Wolfowitz's resignation but also acknowledge that the World Bank's Ethics Committee bears " some responsibility" for giving him bad advice on the issue of his girlfriend." Brian Ross, Wolfowitz World Bank Negotiations Stall, The Blotter, ABC News, May 16, 2007. As the Wordl Bank Directors understated, "One conclusion we draw from this is the need to review the governance framework of the World Bank Group, including the role as well as procedural and other aspects of the Ethics Committee." World Bank, News and Broadcast, Statements of Executive Directors and President Wolfowitz, May 17, 2007.
Still, there was a bit of delicious irony that global elites, of a certain bent at least, could enjoy--who better than the driving force behind the World Bank's anti-corruption campaigns forced from office on ethics grounds that smelled of corruption. And there was an additional set of pleasures connected to Wolfowitz's downfall. His removal served, for example, as a sort of revenge against an architect of what, in some quarters, has been viewed as American adventurism in Iraq. Indirectly, revenge was directed at the American administration of George Bush, as well. "Many European governments were dismayed by the appointment of Wolfowitz, who was a primary architect of the Iraq war while at the Pentagon." Peter S. Goodman, Bush to Pick Zoelleck for World Bank, Washington Post, May 30, 2007.

Of course, by mandarin's rules, the timing could not have been better. The American administration is in no position to expend much capital defending Wolfowitz right now. Still, revenge against a thoroughly weakened enemy, a lame duck pursuing a series of actions that have lost popularity within the electorate, is hardly worth the effort. Still, revenge sometimes serves as a signal of sorts. But the most "delicious" bit of revenge, it appeared, was the mandarin's slap at Mr. Wolfowitz by the World Bank Directors--having provided a short detail of the World Bank's achievements during Wolfowitz's presidency, the Directors were quick to note--"It is regrettable that these achievements have been overshadowed by recent events." The inversion of values embedded in that statement is far too complex and perverse for quick exposition, but suggests a value system in which position within the mandarinate, and the control of benefits flowing from that position, is valued far greater than the benefits themselves (or their objects). But this is nothing new.

But perhaps of greater importance in the gesture (of removal) lay in that those who managed to remove Wolfowitz were signaling the change in the balance of power in the context of supra-national public global finance. The signals came through effectively in the contrasting "departure" statements of the World Bank Executive Directors and Paul Wolfowitz. See World Bank, News and Broadcast, Statements of Executive Directors and President Wolfowitz, May 17, 2007. The Directors emphasized
the large number of achievements over which Wolfowitz presided:
the Multilateral Debt Relief Initiative, the Clean Energy Investment Framework, the Africa Action Plan, and the Avian Flu Initiative. 2006 was a record year for IDA lending, especially in Africa. The Bank has launched emergency action programmes in Liberia, the Democratic Republic of the Congo and the Central African Republic, and played a key role in the Lebanon and Afghanistan donors conference. In March, after an unprecedented global consultation process, we adopted a new strategy for the Bank’s work on Governance and Anti-Corruption. And we have new strategies for Rapid Response in Fragile States, for the Health Sector and for the Financial Sector. We thank Mr Wolfowitz for his leadership and for championing the Bank’s work across so many areas.
Id. The emphasis was both institutional and programmatic. It is the program that is important--and the structures created to support them--starting with the bureaucracies in Washington.

In a great ironic turn--the "war mongering" conservative, American, delivered a statement with a far different orientation. Wolfowitz's statement, now perhaps more backward looking, emphasized the objects of the World Bank's programs: the poorest individuals in the least developed states, the populations of states emerging from conflict and the populations of so called middle income countries, "". Id. He also emphasized what was clearly a difference between his perspective and that of the World Bank directors--a focus on the private sector. "Some of our most important work has been strengthening the development of the private sector, which is the most important source of the growth and jobs that people need to escape poverty." Id.

Wolfowitz emphasized his antic corruption campaign, but from a slightly different perspective. He suggested the necessity of a reorientation designed to strengthen the current system against charges that it contributes, and necessarily so, to a global financial system in which all debt to developing states is virtually by definition, odious.
We have not only increased the quantity of resources available to the poorest countries through IDA, we are also making those resources more effective, and we are providing greater assurance to donors that they are being used properly: By helping developing countries strengthen systems of governance and supporting their efforts to fight corruption and to recover stolen assets; By placing greater emphasis on measuring the results our support is producing, although much more work needs to be done in this area; and By strengthening cooperation among donors, and particularly among the Multilateral Development Banks in such areas as fighting corruption and averting unsustainable debt burdens.
Id. This aspect of Wolfowitz's presidency has been a source of support for him among elements of civil society, especially those elements of civil society concerned about sovereign lending. See Backer, Larry Cata, "Odious Debt Wears Two Faces: Systemic Illegitimacy, Problems and Opportunities in Traditional Odious Debt Conceptions in Globalized Economic Regimes." Law & Contemporary Problems, Vol. 70, 2007. But for others, the combination of support for the private sector and anti corruption, provided little benefit. See Joseph Hanlon, Wolfowitz, the World Bank and Illegitimate Lending, The Brown Journal of World Affairs, May 16, 2007.

And it may be Wolfowitz who has the last laugh. . . or at least a snort and chuckle. José E. Alvarez, the current president of the American Society of International Law, recently posed the problem facing the vanquishers of Paul Wolfowitz:
As of this writing, President Bush has announced his plans to submit a single name to the Board of the World Bank and seek its approval to have Robert Zoellick, U.S. diplomat and trade negotiator, replace Paul Wolfowitz as President of the Bank at the end of this month. The announcement seeks to perpetuate the 60 year old cozy handshake deal – not required under any law, national or international -- under which the United States selects the President of the Bank while Europe selects the head of the IMF. If past is prologue, the Board will accept Bush’s choice, despite recent suggestions that, at the very least, the White House should have submitted a list of names to afford the Board some discretion. If Zoellick is approved, the Bank will get a new President without even confirmation by the U.S. Senate and only after cursory (if any) prior consultations with many other shareholders of the ! Bank. While some Europeans and finance ministers might have been consulted prior to the White House announcement of its hand-picked successor, according to press reports the Zoellick announcement came as something of a surprise to most Bank Board members. It came only days after finance ministers in Australia, Brazil and South Africa jointly declared that the next Bank president “should be appointed using an open, transparent selection process with candidates not restricted by nationality.” José E. Alvarez, ASIL President's Column: Noblesse Oblige at the World Bank, IL.Post, American Society of International Law, June 7, 2007.
The selection of the new World Bank President poses a bit of a conundrum, one that implicates the normative structure of law, legitimacy, democracy and power. First, of course, is the obvious--Americans are not very popular among global elites of a certain stripe at the moment. Thus, the press has taken some pains to explain
"People think Zoellick is highly intelligent and has a pragmatic mind-set," said a senior World Bank official who spoke on condition that he not be named for fear of alienating his new boss. "But he's still from the same people who brought you the Iraq war, the same people who brought you Paul Wolfowitz and Donald Rumsfeld. There's immediate jaundice about his country of origin. Any American appointed by this president would carry that stigma."" Peter S. Goodman, Bush to Pick Zoelleck for World Bank, Washington Post, May 30, 2007.
Peter S. Goodman, Bush to Pick Zoelleck for World Bank, Washington Post, May 30, 2007. There is thus a bit of chagrin among those who managed the ouster of Wolfowitz--what was the point of all the effort if he is merely to be replaced by a variant. Yet there was a bit of the mandarin's game in the appointment of Zoelleck as well:
Zoellick -- not Wolfowitz -- was supposed to get the job two years ago: Associates say Zoellick had been tentatively selected as World Bank president, but then Condoleezza Rice claimed him as her deputy at the State Department. Zoellick reluctantly accepted, mainly out of loyalty, telling associates that he feared missing better opportunities later if he turned Rice down.
It is hard to feel muster much emotion when different groups within the closed circle of this mandarins' coven use the mechanics of global governance, the press, and other institutions as the stage on which they play their games for status and "power." Still, all of these actors manage to raise an interesting question worth at least a passing thought: the more important question involves the method by which Zoelleck was chosen. The Washington Post, disapprovingly reminded its readers that that "Developing countries argue that this system renders the institutions tools of the most powerful nations. Over the weekend, finance ministers in Australia, Brazil and South Africa jointly declared that the next World Bank president "should be appointed using an open, transparent selection process with candidates not restricted by nationality."" Peter S. Goodman, Bush to Pick Zoelleck for World Bank, Washington Post, May 30, 2007.

Why should the next president of the World Bank be chosen differently, in a more open, transparent process, leading to the appointment of someone other than an American, perhaps? The answer many would give you is simple--legitimacy and the democratic ideal that serves as the bedrock of the constitutional traditions of most modern states and is the foundation of many international conventions, declarations and other similar instruments. The principles of open elections, in which every member participates on an equal footing, and in which every member is entitled to a single vote, is at the heart of the U.N. Assembly system, and the measure by which officials are elected in many states. That system is the usual method of ensuring legitimacy--it serves as proxy for the free expression of the entire community on whose behalf the elected official serves. One person one vote has been the mantra short form rendition of these ideas in the West, even in the United States since Baker v. Carr, 369 U.S. 186 (1962).

This is particularly important in the case of the World and and its doppelganger, the International Monetary fund, because, together, they serve as a sort of controlling mechanism for the legislative power of many of its less well privileged members. "Moreover, the World Bank is not only a bank. It is, like the IMF, a supplier of laws along with funds. Like the IMF, the Bank has an extensive and profound legal impact on borrowing countries through the conditions it imposes on those who seek its funds. " José E. Alvarez, ASIL President's Column: Noblesse Oblige at the World Bank, IL.Post, American Society of International Law, June 7, 2007.

And yet, the current system of choosing the World Bank president (by the United States), preserving for European States the power to select the leader of the International Monetary Fund, and between them, substantially controlling the key public mechanism for global sovereign finance, reminds us that democratic principles can be more subtly applied. Democratic legitimacy depends, in large measure, on the factors that one values most in constructing a system of governance based on participants. When the bodies of individuals are valued most highly, then a system of one participant one vote makes perfect sense--from the construction of an electoral system for a nation-state, to the development of mechanisms for choosing the next president of the World Bank.

But there is nothing inherently right about privileging individuals in the construction of democratic (or better put participatory, and thus republican) systems of governance. It has been common to privilege power in the construction of legitimately participatory systems--from republics privileging wealth (either in the form of free holding or more liquid wealth) to those political communities privileging individuals responsible for the conduct of war (from the Japanese to the European feudal system). Even modern democratic loving systems continue to create ever more complicated systems of acknowledging the legitimacy of power in the construction of democratic systems--from the qualified majority voting systems of the European Union, to the organization of the United States Senate. Though increasingly grudgingly accepted, even the United Nations provides for a double tiered set of voting bodies--the common Assembly and the Security Council, within the latter some states having greater power than those who rotate off and on the Council.

The selection of the World Bank president presents an old problem in a new vessel. Thus, it has been suggested, "democrats think themselves entitled to an equal share of everything because they are equal, whereas oligarchs think themselves entitled to an unequal share (more) of everything because they are unequal. On these principles we can say that justice is equality, but only for equals; and we can say that justice is inequality, but only for those who are not equals." John Lunstroth, Linking Virtue and Justice: Aristotle on Melian Dialogue, International Legal Theory 12:99 (Fall 2006) at 123. Just as these republican governance systems acknowledge power, so does, in its own way, the unofficial system of choosing both the World Bank President and the leader of the International Monetary Fund. At present, and certainly at the time of its creation nearly half a century ago, the relationship among the United States, the European states and the rest of the world was substantially unequal, as those thing are measured in the currency of those bodies. And that is the rub. The World Bank and the International Monetary Fund structure remind its members that they exist in a community of unequals. In such a community legitimacy requires the approbation of power. And power, as understood within the framework of those organizations, is measured in wealth.

The Brazilians, Australians and others may want a greater shot of governance, but they are in no position (for the moment) to make that claim legitimately, within the normative structure of the World Bank, because the nature of their membership is not equal to that of the Americas and Europeans. Someday, perhaps, it might be. And then a conversation of a different order may be possible. On that basis democracy with rearrange itself to find a different basis for the expression of its notions of democracy and justice as institutionally realized values. But that day is not today.

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