If the new World Bank President calls …

International Economy, The, Spring, 2005

NORBERT WALTER Chief Economist, Deutsche Bank Group

As you yourself already suggested, you will need to listen and show that you can be a pragmatist and a manager able to focus on the day-to-day running of a large bureaucracy. Grand visions are unlikely to work in a place like the World Bank. You should seek to consolidate the currently existing programs (many of which have become somewhat ill-focused in recent years). This will allow you to win the loyalty of the Bank's staff and the support of Bank's shareholders, which will be indispensable if your tenure is to be successful.

You must strengthen support among donor countries for global development finance, debt relief, and aid. You should stick to the main financing methods in place. In times of great fiscal strains among donor countries, a strong security dimension to their bilateral development policies, and sharply diverging development fortunes of continents, clear-cut priority setting on issues and regions is a huge, yet essential political task. Diverting aid flows from middle-income to low-income countries is overdue.

You must continue marshalling the resources of the World Bank Group to reducing poverty in areas in which states, societies, and markets do not function properly, including post-conflict reconstruction of war-torn countries. You should continue to reward best efforts in developing countries, tackle corruption and bad governance, and devote the key resources of the institution to fighting the interrelated problems of poverty, malnutrition, and epidemics or catastrophic ills. The Group's move towards projects and programs which are driven by recipient governments should be maintained. And you should work closely with other agencies with similar goals, such as the IMF and the World Trade Organization.

The best way to achieve all of this is to listen to shareholders, staff, and customers, then set achievable goals and finally focus on their realization. If you do this, you will prove your critics wrong and make your tenure a success.

CHARLES W. CALOMIRIS

Henry Kaufman Professor of Financial Institutions and Academic Director, Jerome Chazen Institute for International Business, Columbia Business School

Careful research by David Dollar at the World Bank shows that liberalizing trade reduces poverty. Gerard Caprio of the World Bank produced pathbreaking work demonstrating the importance of limiting regulatory corruption and the government's protection of developing country bankers so as to reduce the impoverishing costs of financial bailouts. William Easterly (formerly of the World Bank) has written compelling accounts explaining how the absence of accountability by World Bank bureaucrats to their ultimate donors and ultimate aid recipients results in the unending stream of unfulfilled Bank promises and mind-numbing Bank rhetoric.

All three of these fundamental insights about policies to alleviate poverty informed the recommendations of the Meltzer Commission, on which I served in 1999-2000. Clearly, the intellectual wherewithal to identify and implement appropriate reforms already exists both inside and outside the Bank. The intellectual battle for reform has already been won, but so far that has counted for little. Mr. Wolfowitz's success will depend on his ability to change the incentives of the organization to identify and reward knowledgeable and experienced staff members who are willing to prioritize poverty alleviation rather than simply move loans and soundbites out the door.