Wolfowitz And The World Bank

George Bush has nominated Paul Wolfowitz to run the World Bank. I don't know much about Wolfowitz's views on development, and a small part of me is thrilled that he'll be safely away from the Pentagon, unable to influence our defense policy. But a bigger part of me thinks that this is a bad idea, for several reasons. First, there's this:

"European sources said Wolfowitz's name was circulated informally among board directors several weeks ago and was rejected. "Mr. Wolfowitz's nomination today tells us the U.S. couldn't care less what the rest of the world thinks," one source said."

If we already ran this idea past the directors and it was rejected, then we really are thumbing our nose at the rest of the world, and in a very concrete way.

Much more importantly, though, whether you agree with him or not, it seems pretty clear that Wolfowitz is an ideologue. Some jobs are more appropriate for ideologues than others, and to my mind the job of running the World Bank is one of the last ones I'd want an ideologue to fill.

Development work is hard. All sorts of smart, well-motivated people with elegant theories have tried it and come to grief. But over the past few decades, we have learned some things that work and some that don't. To learn these lessons and put them to good use, it would help to have some actual experience in development, since my sense is that it is not at all intuitive. Unless you count his stint as Ambassador to Indonesia in the eighties, Wolfowitz has no such experience. But more importantly, you have to be open-minded and willing to learn from experience, and you have to be willing to do what works, whether it fits in with your pet theories about how the world works or not. And nothing about Paul Wolfowitz's record suggests that he fits this description.

Wolfowitz has virtually no relevant experience. He is driven by theory, not evidence. His track record at estimating the consequences of policies he supported is pretty bad (recall his estimates of the number of troops we'd need to fight the war in Iraq, the amount of money it would cost, and the speed with which we'd be able to start drawing down our forces.) These are exactly the kinds of calls he'll have to make about development policies at the World Bank, and this record should give anyone pause. This is especially important since, if the head of the World Bank gets things wrong, the people who are affected are poor people in poor countries: those who have the least capacity to absorb further calamities, and the least political power to oppose policies that will harm them.

Comments

[dmbeaster]

This is 100% about Bush rewarding loyal troopers like Wolfowitz without regard to competence.

[2shoes]

But is the World Bank a reward for the Wolfman?

[Anderson]

And what rough beast, its hour come round at last, will replace him at Pentagon?

[Jesurgislac]

I hate to disagree, DMb, but I think that Bush wants an ideologue like Wolfowitz running the World Bank.

I've seen echoes of Reagan in George W. Bush* but in this I see echoes of Nixon's administration, that assassinated President Allende to put in place ideologue "economists" with more theory than sense. The Chicago Boys were a disaster for Chile, and Wolfowitz is likely to prove a disaster for all countries dependent on the World Bank. But his ideology is right...

*and you know I don't mean that as a compliment: I mean that Reagan's administration was willing to commit crimes and do evil to support their ideology - the covert Iran-Contra arms sales, the public support of Saddam Hussein, the bankrolling of the mojaheddin in Afghanistan, all in the name of "anti-Communism" - and exactly so is George W. Bush administration.

[hilzoy]

Jes: in the interests of avoiding another food fight, let me be the one to say: we didn't assassinate Allende. What we knew about the coup, what we might have done to stop it, etc., are debatable, but we didn't assassinate him.

[cleek]

And what rough beast, its hour come round at last, will replace him at Pentagon?

as always: you can imagine the worst possible candidate; but the actual one will still make your jaw hit the floor.

i predict... Bremer (Feith is busy, right?)

[Edward]

I loved this comment on RedState:

I think Wolfowitz's estimates of the cost of the Iraq war qualify him for the job. First he said it wouldn't cost anything. Then when pressed, he said $2 billion. He only missed the mark by 10,000% and counting.

[ral]

cleek: as always: you can imagine the worst possible candidate; but the actual one will still make your jaw hit the floor.

I saw Lily Tomlin perform last week. She put this principle very succintly: "I worry that no matter how cynical I am, I can't keep up."

[Jesurgislac]

Hilzoy, in the interests of avoiding another food fight, I'll acknowledge that whether or not the CIA owns up to assassinating Allende (I gather that they disavow involvement, which does not surprise me, but I see no special reason to believe them) it is irrelevant to the real point:

...after Allende's overthrow, replaced by Pinochet, the Chicago Boys got to run Chile's economy on their economic theories, untried by experience.

I think that Wolfowitz's appointment to the World Bank is the same kind of thing: not a reward for his loyalty, but an ideological appointment. Wolfowitz is there because his ideology is sound.

[rob]

Reminds me of McNamara: Big ideas based on ideology, not enough common sense.
Maybe Bush wants to reduce the role of the WB by discrediting itself some more...

[Macallan]

Wolfowitz is there because his ideology is sound.

I know... imagine the nerve?!

Bush, simpleton that he is, probably didn't even consider putting a communist or Buchananite isolationist at the World Bank.

[heet]

Macallan
Bush, simpleton that he is, probably didn't even consider putting a communist or Buchananite isolationist at the World Bank.

I would have settled for somebody with relevant experience or a trackrecord for success.

[bob mcmanus]

Wolfowitz was the only qualified conservative? The only qualified neo-con?

There are probably dozens to hundreds who would even be acceptable to macallan.

Hughes and Bolton and Wolfowitz. A terrible thing I have seen over and over. As a President moves into his second term, the number of people he knows and trusts gets smaller & smaller.

[Urinated State of America]

Wolfowitz following in the steps of McNamara. As Marx said, history repeats itself: the first time as tragedy, the second time as farce.

"If we already ran this idea past the directors and it was rejected, then we really are thumbing our nose at the rest of the world, and in a very concrete way."

Nonsense. Why, in the first presidential campaign debates he said "We must be a humble nation; if we are an arrogant nation, they will resent us. He said he was a uniter, not a divider. Don't you understand it makes the troops unhappy & demoralized when you doubt Dear Leader? You must be an America-hating liberal.

[Urinated State of America]

Macallan wrote:

"Bush, simpleton that he is, probably didn't even consider putting a communist or Buchananite isolationist at the World Bank."

Oh, FFS Mac, he could have chosen Marty Feldstein, Larry Summers* (ol' "Third World Countries are Underpolluted" should have found favor with Shrubby), Jeffrey Sachs, or even Larry Lindsey. Y'know, *economists*.

*BTW, nobody I noted commenting on the recent controversy involving Summers noted that his Ph.D. supervisor was Janet Yellen (head of the San Francisco fed, ex-Chair of the CEA, and a generally extremely smart lady, who to boot is a really, really nice person.)

[jeet]

Maybe he just wants to spend more time with his girlfriend.

[smlook]

Well, if all you guys are upset about this... it must be a good decision.

[Anarch]

Well, if all you guys are upset about this... it must be a good decision.

The mind boggles.

[Timmy the Wonder Dog]

The Chicago Boys were a disaster for Chile

I am curious Jes as where you dug this up.

Given the overall record of the World Bank (IMF as well), Wolfowitz is good selection. It will be interesting to see the impact when capital flows are directed towards individuals rather than to ministers with Swiss Bank accouts.

[Catsy]

Well, if all you guys are upset about this... it must be a good decision.

Brought to you by the same mentality and stunning logic behind America's support for Saddam Hussein and the Taliban. After all, if it pisses off our enemies, it must be good!

[praktike]

"It will be interesting to see the impact when capital flows are directed towards individuals rather than to ministers with Swiss Bank accouts."

Aren't ministers also individuals?

"Bush, simpleton that he is, probably didn't even consider putting a communist or Buchananite isolationist at the World Bank."

What does "isolationism" have to do with the World Bank?

[Macallan]

What does "isolationism" have to do with the World Bank?

Other than an oxymoronic relationship, nothing.

[Timmy the Wonder Dog]

Aren't ministers also individuals

So you missed the Swiss Bank accounts.

[Bernard Yomtov]

It will be interesting to see the impact when capital flows are directed towards individuals rather than to ministers with Swiss Bank accouts.

Somehow I don't think of Wolfowitz as the green eyeshade detail-oriented type who's going to uncover all sorts of corruption. And if his claim that Iraq was going to pay for its own reconstruction is any indicator of his financial skills, the World Bank is going to be in a lot of trouble.

[ral]

The World Bank. I'm surprised no one has yet pointed to Confessions of an Economic Hit Man by John Perkins.

Interviews with the author: on Democracy Now! and Leonard Lopate's Show

[Timmy the Wonder Dog]

Uncover all sorts of corruption

To do this we need to open all those Swiss Bank accounts. It was the change in capital flows which I find interesting.

[BadTux]

How in the world can anybody with an IQ higher than room temperature think that a Pentagon specialist like Wolfowitz is qualified to run a bank?! My GOD. He's qualified to run something to do with defense or intelligence, maybe. But he has zero (ZERO) economics training, zero (ZERO) business school training, zero (ZERO) banking experience... the man is about as qualified to run a bank as Bremer was qualified to run a country, and the results are likely to be the same -- utter chaos and near-disaster averted only with much shedding of tears and blood (because you better believe that blood will run in the streets of World Bank customers when he imposes his ideology upon them, but what the hey, it's BROWN PEOPLE whose blood will run in the streets as they riot against having starvation imposed on them, they don't count, right? Right?!).

What the hell, I have a candidate for the World Bank post just as qualified as Wolfowitz: Bozo the Clown. Hey look, he has as much banking experience as Wolfowitz, as much economics knowledge as Wolfowitz, and as much business school experience, why *NOT* appoint Bozo the Clown to head the World Bank? He's just as qualified as Wolfowitz, after all!

- Badtux the Snarky Penguin

[BadTux]

*NOW* you did it. I had to put together a comparison chart of the qualifications of Paul Wolfowitz vs. those those of Bozo the Clown. Hint: Bozo whups Prince of Darkness on almost every count!

- Badtux the Snarky Penguin

[heet]

Way to kill an interesting thread, badtux.

[jeet]

he has zero (ZERO) economics training, zero (ZERO) business school training, zero (ZERO) banking experience

All of which were also true about Bono.

That's Bono. With an "N".

[BadTux]

I'm sorry, Heet! It's just... you have a man less qualified than Bozo the Clown to run a bank, and... AGH! MY HEAD! MY POOR HEAD! It isn't the evil of the Bush administration that makes my head feel like it's exploding. Evil's fine and dandy, as long as it's COMPETENT evil. I mean, Richard Nixon was evil. Does anybody deny that? But at least Richard Nixon was *competent* evil, whether it was overthrowing democratically elected governments, or cozying up to tyrants everywhere. (You can't really blame Vietnam on Nixon, it was already FUBAR before it got handed to him on a cow-chip plate). Oh sure, there was that little screw-up with the burglary and all, but hey, even competent evil can screw up occasionally, okay?

No, it's not evil that makes this penguin's head ache. It's the sheer *INCOMPETENCE* of the Bush implementation of evil. I mean, if you're going to be evil, at least do it *RIGHT*! Not this half-cocked stuff like appointing a Pentagon ideologue to run a bank who is less qualified for the job than Bozo the Clown!

- Badtux the "Can I have some *COMPETENCE* with that evil, please?" Penguin

[ral]

OK, flame on.

Considering that the main function of the World Bank has been to lend money to impoverished countries for large-scale projects that help entrenched elites retain their power, which do not benefit the majority of poor citizens, and which saddle those countries with enormous debts that they cannot repay, well, an ideologue seems like the right man for the job.

Paul Wolfowitz will fit right in.

[see above, Confessions of an Economic Hit Man]

[jeet]

The World Bank is evil, then, because it tried to end a policy that not only made Mozambique as a whole poorer, but directly hurt millions of impoverished small farmers. Its high-minded critics want to keep the prices those farmers receive low, on behalf of 10,000 politically influential workers and a handful of foreign factory owners....But why should so morally dubious a case -- one in which the bank was defending the interests not of multinational corporations but of starving peasants -- be a touchstone for the opponents of globalization?

Right-wing nutjob?

No, Paul Krugman.

[noah]

Obviously Wolfowitz shares Bush's vision of the world...that is a world safe for democracy...the old realpolitik is on life support.

Probably won't work out exactly the way they envision but I think they should try.

[Don Quijote]

Jes: in the interests of avoiding another food fight, let me be the one to say: we didn't assassinate Allende. What we knew about the coup, what we might have done to stop it, etc., are debatable, but we didn't assassinate him.

Here is a stack of documentation that pretty much says the opposite:

GWU.EDU - Chile and the United States: Declassified Documents relating to the Military Coup, 1970-1976

So we didn't put the gun to his head and pull the trigger, but we pretty much did every thing else.

[Don Quijote]

The fine work of the Chicago Boys in Chile:

What Collins and Lear do best is expose the miracle's curse. Consider a few of the figures that are so often omitted from discussions of Chile's miracle:
* The percentage of Chileans living in poverty doubled from 20 percent to 41 percent between 1970 and 1990;
* The percentage of Chileans living without adequate housing increased from 27 percent to 40 percent from 1972 to 1988;
* In the last decade of Pinochet rule, the richest 10 percent of Chileans increased their share of national income from 37 percent to 47 percent, as the middle class watched its share contract from 23 percent to 18 percent;
* Chile's foreign debt rose from $5 billion to $21 billion, one of the world's highest per capita burdens.

Courtesy of MultiNational Monitor - Chile's "Miracle" Fades in Rearview Mirro

[Timmy the Wonder Dog]

Ral, Paul Wolfowitz won't fit in which is why the Europeans are so upset. Capital flows to private individuals instead of governments, a new beginning yes.

[Donald Johnson]

This is in response to Jeet, who knows Krugman is currently an icon of the left and cites him as though his word on that cashew nut controversy is somehow determinative about what we should think about the World Bank. Krugman is currently the hero of the left for pointing out Bush's lies years before anyone else in the mainstream had the guts to do so, but pre-Bush most of his ire (along with Friedman and the editors of the NYT) was aimed at the anti-globalization protestors and their criticisms of the World Bank and the IMF. This was the age of Bill Clinton and Tom Friedman and respectable liberals weren't supposed to criticize corporate power. There was a meeting of the WTO (I think) in the spring of 2000, a few months after the Seattle protests, and I remember counting 5 attacks on globalization protestors appearing on the NYT opinion pages with not a single column defending any point they made. They even found a Jamaican woman who defended the notion that it was good to have the IMF dictating terms to the government of Jamaica, the sort of man-bites-dog choice which was meant to imply that American 20 year-olds in the streets were presuming to speak for Third World people when even Third World people wanted the IMF to tell them what to do. This all started changing when Stiglitz came out with first an article in the New Republic right about that time and then a book (Globalization and Its Discontents) in which this economist and former World Bank employee and future Nobel Prizewinner said that the protestors were right on a great many issues, particularly about the IMF. Then the NYT and like-minded mainstream liberals started to break free of the iron grip of Tom Friedman and the Washington Consensus and started asking themselves if maybe they'd been wrong about some things. Krugman himself seemed chastened in a column he wrote about Argentina a couple of years ago--I don't have the date. Nowadays the NYT seems to be lined up with Jeffrey Sachs and Joe Stiglitz and advocates aid to poor countries and keeping the cost of drugs for AIDS and other diseases low along with a lifting of tariffs that hurt poor farmers overseas--previously they would have advocated lifting tariffs because that was a free trade prescription while ignoring everything else. And Friedman would jet around the world talking to governmental figures, corporate CEO's and finding people on the street who would make the point he wanted them to make and then putting it all in a book that had people stunned by his deep insight and keen grasp of the global economy, as demonstrated by the fact that every smart person he quoted seemed to agree with him.

As for Mozambique and the cashew nut controversy, I followed that little squabble between Krugman and the globalization protestors. I don't remember the details and not being an economist, didn't feel like I understood the issue well enough to say who made the better points. But it didn't seem as one-sided as Krugman painted it then.

[NeoDude]

Is Timmy the only one who believes that Wolfy and the Bushians care for individuals?

[Dantheman]

"Is Timmy the only one who believes that Wolfy and the Bushians care for individuals?"

No, I believe it, too. I just think that their level of caring rises exponentially with their level of contributions to Republican campaigns.

[ral]

The difference between image and substance on the subject of freedom: They talk about freedom and values, but they really don't believe in representative government, a quote from David Durenberger.

[Dantheman]

An excellent interview, ral. Perhaps you'll have more luck getting the Republicans here to comment on it than I did (in the More Hatred (Special Wretchard Edition) thread).

[jim hurt]

Ronald MacDonald (c) is a much better candidate. The world bank is really a front for rich multinationalist making deals with dictators speaking for their "people" and as such compleatly anti-democratic. This makes "Wolfie" and his democratic idealism a trout moving upstream in the world bank culture. Ronald on the other hand, has years of experience puting a happy face on Multinationalism. Bozo just doesn't have the "new Economy" experience of Ronald.

[ral]

Dantheman, we can but hope. Sometimes repetition eventually evokes an actual response. Of course, there are those who are well trained in ignoring what other people say.

[I think LJ also pointed to the same interview in another thread.]

[jeet]

Donald,

You argue that there is a discontinuity between the pre-Bush Krugman and the post-Bush Krugman. I see no contradiction in refusing to tolerate bullshit, whether it comes from the Bush Administration or the anti-globalist left.

[BadTux]

Jim, I agree that Ronald McDonald probably knows more about banking and international business than Bozo the Clown, who similarly knows more about them than Paulie Wolfowitzy, whose sole experience with banking was opening a checking account a number of years ago as a customer. And certainly Ronald's got the PR edge.

But really, should we get into a flame war about which clown is more qualified than Paulie? I mean, c'mon. They're CLOWNS! Isn't it good enough to just say "A clown is more qualified than Paul Wolfowitz to lead the World Bank", and leave the quibbles as to which specific clown for later? And besides, Ronald has better lawyers than Bozo and thus is more likely to sue us for libel for associating his name with the Wolf Man, so Bozo is the safe choice (heh!).

- Badtux the "Clowns are great!" Penguin

[NeoDude]

All of the United States' land-grabs were done in the name of Revolutionary Democratism...nothing has changed...and the world knows it.

[NeoDude]

Maybe I should rephrase that, a wealthy elite has always used the United States' for land-grabs. It all being done in the name of Revolutionary Democratism, of course. And most of the world knows this.

[liberal japonicus]

You know, after the shock (profound as it may be) has partially worn off, I find myself praying that there is something that is not apparent on the surface here. A Guardian piece starts off suggesting the same thing when it notes

Of course it would not be the first time that someone from the Pentagon has headed the world's leading development institution. That distinction belongs to Robert McNamara, who came to grief over the Vietnam war. He ran the Bank from 1968 to 1981, in what could be seen as a very public act of contrition for his conduct of the war.

..snip..

The Bush administration is on a mission to spread democracy around the world - albeit on a highly selective basis. For George Bush, countries such as Burma and Iran are "outposts of tyranny", but he would not dream of lumping friends of the US such as China, Russia and Saudi Arabia into that category. Be that as it may, one can easily see Wolfowitz using World Bank loans to promote democracy around the world.

To give him his due, Wolfowitz has consistently pushed democracy. Back in the 1980s, when he was assistant secretary of state for east Asia, Wolfowitz played a key role in levering out President Ferdinand Marcos from the Philippines once the people had turned against him.

I entertain a fantasy that Wolfowitz, knowing that publically shifting his viewpoint would result in messy defenestration, chose to move but is unable to publically state why he wants to move (he apparently requested the position) Rumsfeld is overwhelmed and attempts to choose a sufficiently weighty deputy fail, with an appropriate amount of flailing and thrashing about.

I admit this is akin to the daydream I have of winning the lottery (the money is tax-free here in Japan, so my wife would cash the ticket in, and the money has already been divided up) so I'm not going to confuse this with reality, but it does do wonders for lowering the blood pressure.

[NeoDude]

Maybe I'm turning into a Volokhist, but I think the Desert Vampire should be brought to justice!

[NeoDude]

liberal japonicus,

From your keyboard to her ears:

"War architects quickly departing the Pentagon," Eli Lake declares in the New York Sun:

http://www.warandpiece.com/blogdirs/001755.html

[smlook]

Catsy,

Thanks for helping to make my point. So many here live inside a bubble.

"stunning logic behind America's support for Saddam Hussein and the Taliban."

I guess the words "Soviet Union" and "Clinton" and "9/11" mean nothing to you.

I stand by my statement. If in your bubble you see the world one way, I can safely say that is probably not going to turn out to be the reality of the situation.

[hilzoy]

smlook: you're verging on violating the posting rules against incivility. You're definitely over the line as far as not adding anything useful to the discussion (in this last comment.)

[rilkefan]

OT - hilzoy, can we have a post from you on the current Volokh controversy?

Thanks,
rilkefan

[Anarch]

jim hurt (and BadTux et al): Ronald MacDonald (c) is a much better candidate.

I'm sorry, but the spokesman for the corporation whose new ad campaign revolves around the Zen-like statement "Women are like McGriddles" is not anyone I want in a position of responsibility.

LJ: Back in the 1980s, when he was assistant secretary of state for east Asia, Wolfowitz played a key role in levering out President Ferdinand Marcos from the Philippines once the people had turned against him.

As someone who watched Ninoy Aquino get assassinated, can I point out that the important clause in that sentence is "once the people had turned against him" and that that bloodless description conceals a multitude of ills?

[liberal japonicus]

Anarch
that's why it's a fantasy daydream sort of thing. He deserves some credit for advocating getting rid of Marcos in the Reagan admin (though a subtly different view can be obtained from the Phillipine LaRouche Society(!)) which probably puts him one up on anyone else over there (though it is difficult to imagine how much lower one's expectations can be reduced) Like I said, good for the blood pressure. Or perhaps I'm just at the point where I just want it to stop rather than trying to make them realize that they are wrong.

At any rate, when we talk about clowns, don't forget the ending of Pagliacci

[hilzoy]

rilkefan: for you, I'm writing one. Stay tuned.

[Catsy]

Thanks for helping to make my point. So many here live inside a bubble.

Mr. Bush comes to mind immediately. But thank me not; your point was unfounded and irrelevant and I'm not interested in cute rhetorical tricks like this.

I guess the words "Soviet Union" and "Clinton" and "9/11" mean nothing to you.

Not in this context--unsurprising, as they have no relevance to my point, unless your notion of relevance is to cough up Clinton's name like chaff in the hopes that it'll distract or mislead.

I stand by my statement. If in your bubble you see the world one way, I can safely say that is probably not going to turn out to be the reality of the situation.

I stand amazed. Is this "opposites day"? Is this one of those Twilight Zone or Star Trek episodes where the world is turned inside-out and everything Our Heroes thought was true was the opposite, simply because it worked that way in their reality? Sorry, but I've got a beard, not a goatee--I can't be your Alternate Spock. Thanks for playing, though.

Meanwhile, in the real world, some of us recognize that neither you nor I have access to the Revealed Truth of the Great Sock Puppet in the Sky, and may on occasion be wrong about one thing or another. This leads us, in moments of clarity, to formulate our opinions based on our observations of known facts, rather than turning our brains into a vehicle for XOR operations and flipping the truth to whatever the other person's belief /isn't/.

[liberal japonicus]

catsy
Though I agree totally, piling on dulls the blade. It is true that a blade can be so sharp that the person who is on the receiving end doesn't know he's been cut, but let's leave experiments on how much it takes before the fatal cut is realized to other blogs.

[Donald Johnson]

Kind of a late response to Jeet's response, when the thread has died.

You didn't really respond to what I said, which is that mainstream liberals now admit that much of what the antiglobalization left was saying was correct. Not all of it Incidentally, Krugman's Friday column makes my point better than I did. (Not surprisingly.)

[Lemuel]

Don't mean just to self-promote here, but a development-economist-in-training at Dartmouth has a post on our blog about exactly why (in simple terms) Wolfowitz is a bad choice. Her central point is that the World Bank can only be successful if it continues moving beyond the chessboard macro-management approach to international economic policy it used to have -- she's afriad Wolfowitz will bring this back.

Here's the link