Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Bank Uncertain After Wolfowitz's Departure

Paul Wolfowitz's departure as World Bank president is prompting calls around the world to revoke the traditional right of the United States to select the institution's leader.

As the White House asserted its claim on picking Wolfowitz's successor, aid groups and former bank officials demanded that the next president be selected not in deference to the administration of U.S. President George W. Bush, but on professional merits.

Advocacy groups and development experts took aim at an unwritten rule that has for six decades governed the financial institutions created in the aftermath of World War II: The U.S. president picks the World Bank chief, and Europe selects the head of its affiliate institution, the International Monetary Fund.

"Paul Wolfowitz's problems at the World Bank stem in part from a widespread perception that he disproportionately represents U.S. interests rather than objectives that command a global consensus," said a letter signed this week by more than 200 people, including heads of aid organizations, and sent to the executive boards of the World Bank and the IMF. The letter called for the traditional arrangement to be "abandoned and replaced with selection procedures that reflect two key principles: transparency of process, and competence of prospective leadership without regard to national origin."

Wolfowitz, forced out Thursday after weeks of ethical controversy, on Friday assured the bank's executive board he would have little to do with the institution from now to June 30, when his resignation takes effect.

In a letter, Wolfowitz said he would "leave the day-to-day work of board meetings to the bank's managing directors," while deferring to them on policy issues. Wolfowitz said he "may make a farewell trip to Africa at the request of a number of leaders," but promised to consult the board on travel plans.

Wolfowitz's letter was meant to resolve an argument surrounding the interim period. The Bush administration has opposed the appointment of an acting president, fearing such a move might weaken its prerogative to name Wolfowitz's successor. Senior bank officials who spoke on condition that they not be identified, said the letter mollified the Bush administration while giving bank officials assurances that Wolfowitz is effectively gone.

"This is about power, it isn't about money," said Kenneth Rogoff, a former IMF chief economist. "The World Bank just isn't going to continue to be effective if no one thinks its governance structure is fair."