The World Bank Post-Wolfowitz
Wolfie's downfall is a major blow for the neocons, but a welcome opportunity for reform at the World Bank.
Even towards the end of his stormy two-year tenure at the World Bank, Paul Wolfowitz – who has resigned following a row over his girlfriend's pay settlement – was blissfully unaware of the full extent of his unpopularity.
In a telling encounter with a co-worker in the lift of the bank's HQ in Washington, he asked her the significance of the blue ribbon she was wearing. The employee bravely told him it was being worn by staff seeking his dismissal. The lift ride continued in silence. When the news of his departure broke, staff toasted it with champagne.
The workings of the World Bank are a mystery to most, but for those keeping an eye on the tumbling careers of the architects of the Iraq war, this news can only be greeted with three cheers. Wolfowitz is out, his reputation is in tatters and his prospects for future engagements on the world stage are looking bleak at best.
For many, the fall of yet another "Bush hawk" signals the end of an ideological era and there's no disguising the despondency in the neocon camp: Wolfowitz's friends see him as the victim of a European plot in revenge for Iraq, but that's not the whole story.
Wolfowitz initially enjoyed a honeymoon period at the bank; it was his later moves that caused alienation. Most significant was his decision to link aid to anti-corruption measures – particularly since the policy appeared to be applied selectively, with aid withheld from countries out of favour with the US, and distributed to its allies.
Moreover, having campaigned so vigorously against corruption in developing countries, he was open to charges of hypocrisy when his personal dealings emerged. But, the danger now is that Wolfowitz's laser-like focus on corruption will be lost with him.
This, after all is an institution that, for 50 years, blithely lent hundreds of billions without ever addressing the fact that much of it was trousered by corrupt officials.
Wolfowitz's downfall has strengthened the hand of those arguing for a more open appointment system to prevent the bank becoming a tool of US foreign policy. Indeed, it is evident that the old stitch-up, which gave the World Bank to an American and the International Monetary Fund to a European, is neither legitimate nor workable.
This huge public sector bureaucracy urgently needs reform. If it is to survive at all, the World Bank needs a more legitimate boss and a new sense of purpose.
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