The World Bank’s women problem

April 2, 2012, 4:50 PM UTC

Dartmouth president and World Bank president U.S. nominee Jim Yong Kim

By Colleen Leahey, reporter

FORTUNE — What does college frat pledge hazing have to do with the World Bank? A whole lot more than you’d think.

The most recent issue of Rolling Stone includes a colorful, disturbing retelling of former Dartmouth fratboy Andrew Lohse’s harrowing experience as a brother at Sigma Alpha Epsilon. Filled with nausea-inducing anecdotes of pledges ingesting and clothing one another in vomit, the profile’s sensationalism upstages the role of the man behind the team Lohse reported the hazing to: Dartmouth President Jim Yong Kim.

Kim is the recipient of the coveted U.S. nomination for World Bank president. An anthropologist, physician, co-founder of NGO Partners in Health, and former director of the Department of H.I.V./AIDS at the World Health Organization, Kim certainly boasts an impressive resume. But at Dartmouth — and in his recently published vision for the future of the World Bank — he seems to have forgotten one very important element: women.

According to the Rolling Stone story, Kim’s predecessor at Dartmouth, James Wright, faced immense criticism from alumni and students when, hoping to calm Fraternity Row, he pushed for a coed Greek system in 1998. A year later, Wright waved a white flag and implemented softer reforms. Kim met with Dartmouth alumni shortly after taking office in 2009. A fan of the Greek system, he “reassured them he had no intention of overhauling the fraternities,” even though their reputation of hazing and sexual assault was no secret.

His forgiving attitude then raises the question: If Kim can’t stand up to fraternal culture on a tiny New Hampshire campus, how can he stand up to patriarchal culture on a global stage?

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Reuters blogger Felix Salmon scraped at the PR nightmare Kim faces after ignoring the sexual abuse on Dartmouth’s Frat Row. But Kim’s unclear stance on women’s issues just might go deeper. On Wednesday, Kim called for an inclusive World Bank in a Financial Times op-ed; there was not one mention of gender.

Women make up 40% of the world’s labor force, yet they only hold 1% of the world’s wealth. And, according to the World Bank, eliminating barriers for women increases output per worker by 3% to 25% across a range of countries. In 2008, Goldman Sachs analysts cited that a 1 percentage point increase in female education raises the average level of GDP by 0.37 percentage points and raises annual GDP growth rates by 0.2 percentage points on average. Put simply, there’s huge opportunity in promoting women’s economic development.

“It comes back to the basics. If you’ve got 50% of the world’s population not reaching their personal fulfillment but also not contributing to the societies, we’re missing a huge opportunity for development,” says current World Bank President Robert Zoellick in a video presenting the World Bank’s World Development Report 2012. “Countries that pay attention to these issues do better. Gender equality is not only the right thing to do, but it’s smart economics.”

Gayle Lemmon, who is a fellow at the Council on Foreign Relations, says culture is often used as an excuse for not investing in women. Interestingly enough, Kim defended his response to Dartmouth’s frat scene by telling Rolling Stone, “One of the things you learn as an anthropologist, you don’t come in and change the culture.”

In Saudi Arabia, women are provided the education and training to become lawyers, but they can’t get licenses to practice. Chad — and many other nations — requires women to gain their husbands’ permission to open bank accounts. These policies are intimidating, but not insurmountable. Lemmon’s The Dressmaker Of Khair Khana, which was published last year, follows Afghani entrepreneur and breadwinner Kamila Sidiqi, who created her business within the confines of her home during the Taliban years.

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The International Labour Organization estimates that the Asia-Pacific region is losing $42 billion to $47 billion annually because of women’s limited access to employment opportunities. Increasing women entrepreneurs’ access to resources and capital with the IFC is one way the World Bank can skirt around culture issues, says Lemmon. “When women make money, it changes the way men see them. It can spark generational change.”

Education and health are also essential to the equation. Greater educational attainment correlates with fewer childhood marriages, which tends to lead to fewer unwanted pregnancies, abortions, and other health problems. Healthy, educated women lead to a more productive labor force.

The economic potential of investing in women seems glaringly obvious. But is it obvious to Kim? Fortune reached out to Kim for  comment, but received no response. “Women are not a pet project,” says Lemmon. “They are stability indicators. We need to focus on them until they are no longer a special interest group. The level playing field doesn’t exist yet.”

Africa’s nominee, Ngozi Okonjo-Iweala, has, like Kim, an impressive resume. Her time as finance minister in Nigeria and managing director of the World Bank may give her a slight managerial edge on him, but her desire to invest in women is what sets her candidacy apart. In a 2007 TED talk on business in Africa, Okonjo-Iweala said, “I want to say that some of the best people to invest in on the continent are the women,” before giving several examples of successful African female entrepreneurs. She is also an emeritus member of the board of directors at Vital Voices, a nonprofit focused on investing in women leaders globally.

Of course, there’s the gentlemen’s agreement that the U.S. nominee will run the World Bank and a European nominee will run the IMF. But if the World Bank is serious about its mission, it needs a president who fully grasps the economic importance of prioritizing investment in women, and is not afraid to rise to the challenge.