With World Bank President Jim Yong Kim’s early departure from his position, the international financial institution is now in the position of selecting a new president.
The occasion merits a review of why—despite its globally-minded name—the World’s Bank’s leader has always been an American.
At the end of World War II, the U.S. and European powers created two financial institutions as part of the Bretton Woods Agreement: the World Bank and the International Monetary Fund (IMF). It was informally agreed that the U.S. would choose the head of the former, and Europe the latter.
During that time, the division of labor made sense. The World Bank in particular was intended largely as a means to provide credit for reconstruction in Western Europe following the war. As the U.S. emerged from the war the most unscathed, the country bought the most shares and provided the most capital for its founding. It therefore also had the most voting shares, meaning that American leadership was only natural.
To date, this arrangement has remained in place. All 12 World Bank presidents have been American, while all 11 IMF managing directors have been European.
But as time goes on, the U.S.’s financial stake in the World Bank has decreased and the reasons for which the country was to lead the institution have diminished with it. As such, there have been growing calls in recent years to select the most qualified candidate—regardless of nationality. It remains to be seen whether Kim’s departure will finally provide the Bank an opportunity to consider putting a non-American at its helm. Should the World Bank continue tradition by letting U.S. President Donald Trump choose its new head, however, CNBC reports that some experts fear his appointee could threaten the organization’s reputation and its work—particularly around climate change.
