Wolfowitz’s Second War

NYT reviews Wolfowtiz’s focus on corruption at the World Bank;

“In his first 15 months as president of the World Bank, Paul D. Wolfowitz has made the fight against corruption in poor countries a hallmark issue, waging an aggressive campaign that has led to the suspension of hundreds of millions of dollars in loans and contracts to nations including India, Chad, Kenya, Congo, Ethiopia and Bangladesh.

It is a new incarnation for Mr. Wolfowitz, a neoconservative intellectual who was a primary architect of the Iraq war during four years as deputy secretary of defense…..

Anticorruption efforts are an essential part of development finance,” said Roberto Dañino, a senior vice president of the bank until early this year. “But getting rid of corruption is not a silver bullet. The bank should not overemphasize its anticorruption agenda at the expense of other policies required for development.”….

He has begun firing back at the critics at internal meetings and in public statements. He notes, for example, that the bank’s lending under his leadership actually rose slightly last year, to nearly $23 billion.

Mr. Wolfowitz says he has tried to rebut what he calls the myth that combating fraud is “somehow at odds with development or becomes an excuse not to provide assistance.” While no one knows how much of the bank’s resources have been improperly diverted, informal estimates range from 10 percent to the 25 percent that Mr. Wolfowitz says went to corrupt cronies and family members of Indonesia’s leadership in the 1990’s…..

The doubts center on Mr. Wolfowitz’s role as a leading advocate of the American invasion of Iraq, with many critics contending that his zeal on corruption reminds them of what they say was his messianic but unrealistic faith that installing democracy by force in Iraq, and by other means through the Middle East, would bring stability to the region.

The criticism has been especially sharp among Europeans at the bank, where many officials say that judgments about what constitutes “good governance” could rupture the bank’s delicate relationships with aid recipients, especially if the judgments are based on information gathered from dissidents and other critics in those countries…


Several longtime bank officials say they cannot remember when board members wrangled over the wording of a policy paper with a bank president. At recent meetings, directors demanded that Mr. Wolfowitz agree to a greater role for the board in any future decisions on cutting off aid.

In addition, members forced the deletion of language suggesting that the United Nations’ goal of reducing world poverty 50 percent by 2015 would have to take second place to the bank’s drive against corruption…

“I think some of the board members,” Mr. Wolfowitz said, “are legitimately afraid that as soon as you start criticizing, the next thing you’re going to do is wag your finger and say, ‘You’re not going to get money unless you behave.’ That’s not our objective. Our objective is to make the lending go up.”…

Mr. Wolfowitz’s management style also grates on some bank officials, with a number of them complaining that he has relied on a small coterie of loyal aides. “He presumes,” said Mr. Dañino, the former bank senior vice president and once prime minister of Peru, “that anyone who opposes him is either incompetent or corrupt.”

In his first 15 months as president of the World Bank, Paul D. Wolfowitz has made the fight against corruption in poor countries a hallmark issue, waging an aggressive campaign that has led to the suspension of hundreds of millions of dollars in loans and contracts to nations including India, Chad, Kenya, Congo, Ethiopia and Bangladesh.….”

Via Foreign Policy Blog

Wolfowitz’s focus on corruption should be lauded, it is one of the biggest impediments to the poverty reduction agenda. However pompous releases of reports, (see the latest release of governance indicators ) doesn’t help the poor person on the street. IFIs need to take a broader view of corruption.

Related;
Strengthening Bank Group Work in Governance and Anticorruption
World Bank Releases Largest Available Governance Data Source
Uses and Abuses of Governance Indicators
Rescuing the World Bank
Tackling Corruption is Essential in Making Poverty History
UK withholds World Bank donation

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This page contains a single entry by Paul published on September 16, 2006 3:06 AM.

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