Tuesday, April 10, 2012
Martin A. Weiss
Specialist in International Trade and Finance
On March 23, 2012, President Obama nominated Dartmouth College President Jim Yong Kim as the U.S. nominee to succeed Robert Zoellick as World Bank president. Since its founding after World War II, the presidency of the World Bank has been held by a citizen of the United States, the Bank’s largest shareholder. The current Bank President, Robert Zoellick, nominated by President George W. Bush in May 2007, will step down at the conclusion of his five-year term in June 2012. Dr. Kim is competing against two other candidates for the position: Jose Antonio Ocampo, a Colombian national and professor at Columbia University; and Ngozi Okonjo-Iweala, a Nigerian national and finance minister of Nigeria.
According to an informal agreement among their member countries, the U.S. nominee is chosen as the World Bank President and a European candidate (typically French or German) is appointed as Managing Director of the International Monetary Fund (IMF). This convention has come under increasing strain over the past two decades. As the economies of developing countries become more integrated into the global economy, the distribution of voting power is being challenged. A second line of criticism is directed directly at the method employed to select World Bank (and IMF) leadership. Any process, critics argue, that elects the World Bank president based on nationality and not merit undermines the legitimacy and effectiveness of the institution. Proposals for a more open, transparent, and merit-based leadership selection process have been made consistently in the past, and at times have been incorporated in communiqués of various leaders summits, but have yet to change the outcome at either of the institutions.
The formal requirements for the selection of the World Bank President is that the Executive Directors appoint, by at least a 50% majority, an individual who is neither a member of the Board of Governors or Board of Executive Directors. There are no requirements on how individuals are selected, on what criteria, or by what process they are vetted. Moreover, although the Executive Directors may select its Managing Director by a simple majority vote, they historically aim to reach agreement by consensus. With these factors combined, the convention guaranteeing European leadership at the IMF and American leadership at the World Bank has remained in place.
The three candidates are to have individual interviews with the World Bank’s Executive Board of Directors. It is expected that a decision on the World Bank President will be reached prior to the 2012 spring IMF/World Bank meetings.
Date of Report: March 28, 2012
Number of Pages: 11
Order Number: R42463
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