From your keyboard to God's screen:

Perhaps your suggestion about debating the purpose might start before a nomination, with, perhaps, a lead witness such as Muhammad Yunus.

And why in the world should the US choose the president? I'd like Reed Hundt to argue that one.
Which might be a little tougher than mouthing pieties about the "noble" mission.

Just a guess, but I assume that it's not that RH thinks that the US should choose the WB President, just that it does, at present, make that choice.  It seems clear to me that the sense of legitimacy the Bank has is undermined by the sense that it is an agent of the US, and our sole pick of the President contributes to this.

The Senate has no role in the selection of a World Bank President, nor does any U.S. institution -- formally. Formally, the President of the World Bank is chosen by its Board of Executive Directors. However, in practice, in the past, the Board has always gone along with whoever the U.S. puts up.

There are other ways to foster innovation than through large scale infrastructure lending, which is what the Bank should focus on.

Move beyond the idea of fostering innovation to the idea of fostering economic development ... what is the rationale for believing that large scale infrastructure lending is a useful means of fostering economic development?

To what extent do we engage in large scale infrastructure lending because that is what the World Bank should be doing, and therefore divert nations seeking relief from external finance constraints from economic development activity into trying to develop large scale infrastructure projects.

As far as other alternatives, I'd appreciate some education, as I am not an economist, do not play an economist, and, when I did computer support for economists, learned that if you lined up all the economists in the world, they'd point in different directions.

More seriously, some of the alternatives of which I am aware are debt relief and microloans. The latter is one reason I raised the name of Muhammad Yunus. I mentioned him for testimony, because the reality is that GWB is going to nominate the WB president and an utterly qualified third-world economist with the Nobel Prize is beyond GWB's imagination.

I understand there is progress on debt relief, and associated financial reform. Uganda is one country that seems to have done an excellent job of economic reform after debt relief, although it's certainly not a perfect country.

Intuitively, though, there would seem to be levels between massive infrastructure and microloans. Realistically, the WB could only provide the funding for microloans, with the details delegated to locals. What WB additional things could the WB do that are less than massive and larger than micro? This is a request for information, with no intended criticism.

--
Howard

*equal opportunity offense to both extremes*

"Those who cannot remember the past are condemned to repeat it" [George Santayana]

"There are other ways to foster innovation than through large scale infrastructure lending, which is what the Bank should focus on."

Way to build your premises into your conclusion. In retrospect it is far from clear that Sub-Saharan Africa needed superhighways more than micro-lending. I'll defer to people who know something, but over the years it seems that the World Bank has been a lot more about Bechtel and the interests of various African dictators than it has been about spreading the benefits of productivity resulting from infrastructure improvements. Even to the extent that those exist.

It is like Foreign Aid. Very few of those dollars leave the United States. Instead they leave in the form of weapons and American wheat. The World Bank and the IMF are much like Hawaiian Missionaries, they came to do Good and did very Well indeed.

Lending money to Mobutu so he could skim 20% off every dollar returned in a contract to a Western contractor might warm hearts in Davos. I doubt it has the same effect in Lagos.

That's a good point. Superhighways are unlikely needs. Something like the pipeline from Chad to Cameroon, even though it benefits an oil company, has the potential of bringing jobs and infrastructure -- but will the owners do so?

Perhaps more than traditional superhighways, some of the initiatives for information highways in Africa may make more sense. Within a couple of years, there should be optical fiber undersea cables circling all of Africa. Some of the challenge is bringing them inland. One sensible approach is combining infrastructures; the Ethiopians are building out their electrical grid, but putting wireless digital local loop transceivers/repeaters onto the power pylons. Both the power and communications links easily can connect into South Sudan, and from there across the Sahel.

--
Howard

*equal opportunity offense to both extremes*

"Those who cannot remember the past are condemned to repeat it" [George Santayana]

Well, it does matter to a lot of people in other parts of the world to whom the U.S. deficit is a remote concern.  I guess my question is: do those people matter to you?

I think decent highways, perhaps two-lane with wide shoulders and paved paths along the sides for the rickshaws and animal carts, are not a bad thing for developing countries. Microcredit buys a couple more chickens to raise, at pretty high interest rates. Not a bad idea, and very helpful to the poorest of the poor, but not the way to develop a country.

I nominate Jeffrey Sachs.

"Bush" selects government people for only one reason, and that is to help channel money to his supporters, who are mostly oil related businessmen. Why would anyone assume that the World Bank, since it deals with large sums of money, would be any different? So, whomever is chosen by "Bush" to be the new head of the World Bank will be expected to and will channel as much of the money there to the bank accounts of US businessmen as is humanly possible.

Bush, of course, will have no say in this. Cheney will make the choice.

Hoppy in Sacramento

On microloans, since the loans are in domestic currency, the domestic monetary authority can simply create the funds to lend.

The most important role for the World Bank to play would be to provide a clearing house for technical assistance from low income nations with successful microloan systems in place to help low income nations attempting to establish the programs ... establishing conference in the nations with the successful microloan programs, providing assistance in getting officials of other low income monetary authorities to the conference, publishing and promulgating the information.

Secondarily, one can imagine that it could provide some assistance to cover the impact on the external accounts ... but part of the success of the microloans is that microentrepreneuers are strongly biased toward local labor and locally available materials, and to the extent that they compete more successfully against imported goods and services, their modest imported value component tends to be more than self-financing. There is no need for external financing if the program is functioning properly, so providing external financing is removing a constraint that ought not be removed.

The same is true of intermediate scale projects ... for example, distribution of a decentralized complement of agricultural field trials, transport improvement cooperatives, health clinics, schools, and communication centers to small towns in immediate contact with producer villages. If successful, the complement of activities is self-financing on the external account, so providing external loan financing is not a contribution to success. The proper role of the World Bank would be as a central clearing house for sharing experiences.

There will be some large projects that will be self-financing in the external account over the long term for which the country does face a short term external finance constraint. Those are precisely what the World Bank should be funding through loans ... but most of that project lending is not taking place, and most of the project lending taking place does not fall into that category of actually supporting the economic development of low income nations.

And if the World Bank funded them, it would be a tremendous benefit. However, the World Bank is more likely to finance them and expect the nations themselves to fund them.

If a nation finances as well as funds a combined communication/electrification program itself, the project is far more likely to be within the means of the nation to maintain on its own. The false reduction in cost of external inputs in project establishment under World Bank finance repeatedly comes back to bite the country as the cost of external inputs for maintenance returns to their actual levels.

Is there now a clearinghouse and technical assistance function in the WB that perhaps needs expansion for these missions, or would this sort of involvement be new for the Bank?

Does the Bank ever decentralize? For example, would it make sense (operationally & politically separate) for them to designate Yunus' organization as the WB Clearinghouse on Microloans, and funnel the needed expansion resources to a place that already has expertise?

--
Howard

*equal opportunity offense to both extremes*

"Those who cannot remember the past are condemned to repeat it" [George Santayana]

Is it barely possible that Hundt used that word ("French," which he put in quotes for no other apparent reason) as a shorthand rendition of the contempt held by so many people for international quasi-governmental institutions generally? Many of these organizations either were formed by the French, reflect the French tradition, or used French as their official language long after it stopped being the world's lingua franca (ouch).

Or maybe he just called France a country of thieving bureaucrats.

Is it just me, or has TPM turned into an Economics site?  For at least a week every major post has been about economics.  It is fine to cover it, but there is a lot going on that is being crowded out IMHO. 

On the bright side, it has caused me to spend more time at the "Reader Blogs" section and I am so glad I did.  We have some great thinkers here!

Jan

LOL...it could turn into a site about Republican views of economics between Israel and Palestine.

--
Howard

*equal opportunity offense to both extremes*

"Those who cannot remember the past are condemned to repeat it" [George Santayana]

The Belgians pronounce it Kinshasha but probably don't say conglolese.