Tuesday, February 21, 2006

OECDeing the Rest: The Jigsaw Piece of Wolfowitz vs. Corruption

It has been real quiet around the World Bank after Paul Wolfowitz took over the reins almost a year ago. But it seems, according to Mallaby at the Washington Post, that an agenda is becoming clearer: Wolfowitz' new bag contains something that is ideologically coherent with the National Security Strategy's emphasis on state accountability -- anti-corruption initiatives:
First, a bit of context. The World Bank used to avoid all mention of corruption, believing it should stay out of "politics." This was absurd: The bank had long been telling borrowers how to structure their budgets -- a clearly political subject -- and corruption can't be separated from the bank's development mission. Then, with the arrival of the bomb-throwing Wolfensohn, things began to change. Wolfensohn denounced the "cancer of corruption" in 1996; and the bank's even bomb-happier chief economist, the Nobel laureate Joe Stiglitz, gave speeches attacking the narrow economic understanding of development and proclaiming the centrality of politics.

Speeches are one thing, action quite another. The Wolfensohn bank developed state-of-the-art corruption indexes, which are now used by the U.S. government to identify which countries deserve extra foreign assistance; it created a department to investigate malfeasance in bank projects. But the anti-corruption unit was understaffed and ineffectual, and the bank did not build on Wolfensohn's cancer talk by cutting off corrupt borrowers consistently. Excuses were found. Lending frequently continued.

In a series of tough decisions, some of which have been widely reported and some of which have not, Wolfowitz has challenged this culture. (...) In sum, Wolfowitz's World Bank presidency, which had seemed to lack an organizing theme, has acquired one. The new boss is going to be tough on corruption, and he's going to push this campaign beyond the confines of the World Bank; on Saturday he persuaded the heads of several regional development banks to join his anti-corruption effort. It's amusing to see the Wolfensohn-Stiglitz left-liberal critique of narrowly economic development policy being championed by this neoconservative icon; and it's encouraging as well.

The convergence of security and development happens around the concept of good governance: aid policies cannot be about neutral "technical assistance" when the means are not appropriately used; and when bad local policies weaken the legitimacy of the states, feeding into material, ideological and religious discontent. The OECD-ification of the Rest of the World is on the agenda for the rest of our lives. This is also why it less surprising -- if welcome -- to see the emerging centrist consensus on the path ahead; and why the major continental European countries should participate far more expediently in a project that they in fact already pursue.

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