The All-American Contest At The World Bank

The race for the World Bank presidency is producing unusual jockeying among U.S. lawmakers and foreign nations. It’s not a battle to break the U.S. government’s lock on the top job. Instead, the contest so far appears to be entirely about choosing the right U.S. citizen to represent the interests of 187 member nations.

With two weeks to go before the nominations period closes, only one person is openly campaigning for the job: economist Jeffrey Sachs, director of the Earth Institute at Columbia University. No other candidate has stepped forward, American or not. The Obama administration plans to nominate an American before the window closes on March 23. And some developing countries have quietly discussed pursuing Stanley Fischer, the highly regarded Israeli central banker who is also an American, but it’s still only talk.

Fischer is not on the White House’s radar right now, and Sachs will not be the Obama administration’s nominee. The White House’s list, which started out with a couple dozen names, has been whittled down to a half dozen people with experience in U.S. policy or business (or both), according to a person familiar with the matter. The decision is in the hands of President Barack Obama but he has yet to make a final choice.

Sachs, if nothing else, has been successful at shattering the customs of a typical World Bank race. He audaciously announced his candidacy in an op-ed last week and has been tallying glowing endorsements from finance ministers and heads of state on his website. (The list of nations backing him so far includes Kenya, Malaysia, Jordan, Namibia and East Timor.)

Sachs even has U.S. lawmakers lobbying for him. A senior House Democrat, Rep. John Conyers of Michigan, is circulating a letter on Capitol Hill — addressed to President Obama — outlining the merits of a Sachs candidacy and collecting signatures. Sachs has taken to Twitter to respond to critics individually, and to criticize the selection process. The U.S. government, he said, probably wants a Washington insider as bank president “to push narrow U.S. interests.” (Sachs has plenty of critics, and they came out early, so he’ll be busy in the coming weeks.)

Fischer, who is not a candidate, would probably be among the least controversial picks among people inside the World Bank. He is widely respected around the world for his academic credentials and his policy experience. He taught at the Massachusetts Institute of Technology for decades (where he was Ben Bernanke’s thesis adviser), served as chief economist at the World Bank and in the No. 2 post at the International Monetary Fund – a position traditionally held by an American – in the 1990s. He later worked at Citigroup and became governor of the Bank of Israel in 2005.

Fischer made a late, dark-horse bid for the IMF’s top job last year, even drawing an endorsement from the Palestinian prime minister. He was quickly disqualified because he was 67 at the time, two years older than IMF rules permitted for a first-time managing director, but he also was seen as unlikely precisely because of his American citizenship. The World Bank, however, does not have such an age requirement for its presidency. That has stoked some speculation among developing countries that he could be a consensus candidate who would still be an American. (Fischer was born in Northern Rhodesia — now Zambia — and is a citizen of both Israel and the United States. In a spoof April Fools-style story Thursday, apparently to commemorate Purim, the Jerusalem Post joked that Fischer would step down from his current post to become Zambia’s central banker.)

Fischer, however, does not appear willing to dive into a campaign again, despite encouragement from developing nations. He recently told the Journal he was “not looking at” the World Bank job.

The White House’s list includes names we’ve heard for weeks. Lawrence Summers – who has done stints as World Bank chief economist, U.S. Treasury secretary, Harvard president and director of the White House National Economic Council — is well known both for his economic credentials and his not-always-diplomatic style.

Susan Rice, Obama’s ambassador to the United Nations, is widely regarded for her diplomatic skills and foreign policy expertise — she’s often mentioned as a future U.S. Secretary of State — but her thinner economic or business credentials could create some unease among World Bank shareholders. (That won’t necessarily be a disqualifying factor, as the World Bank isn’t exactly hurting for other people with economic credentials. And Rice focused on many of the issues the World Bank president faces – weak states and global poverty – during her work with the U.N. and at the Brookings Institution. But it’s still a hurdle.)

Treasury Secretary Tim Geithner is frequently mentioned as a strong potential candidate for the job, but he’s not interested. Same goes for Secretary of State Hillary Clinton and Sen. John Kerry (D., Mass.), the chairman of the Senate Foreign Relations Committee who recently defended the value of having an American as bank president and the importance of the bank for U.S. businesses.

Since World Bank President Robert Zoellick confirmed his departure three weeks ago, no serious people have doubted that the U.S. would maintain its hold on the job – even if they wished for a truly merit-based process that cast aside nationality. Created after World War II, the World Bank has always had an American as president while a European has led the IMF. The combined shares of U.S. and European nations in each organization make it nearly impossible for a candidate from another background to break the unwritten, informal agreement.

While the nationality of the winner is widely assumed, the quieter U.S. approach has won some goodwill. Europeans began pushing for Christine Lagarde, previously France’s finance minister, to become the new IMF chief even before the nominations process got underway last May. That helped ensure her success against bids from Fischer and Mexican central banker Agustin Carstens, but also generated some resentment from developing nations.

“Americans have been much more cautious in their remarks,” says Lawrence MacDonald of the Center for Global Development, a Washington think tank that favors a more competitive selection process. “These are nuances. It’s not the kind of reform many had wished for.”