[Mb-civic] Blinkered By His Big Ideas - Sebastian Mallaby - Washington Post Sunday Outlook

[William Swiggard]

Blinkered By His Big Ideas
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By Sebastian Mallaby
Washington Post Sunday Outlook
Sunday, April 23, 2006; B02

Way, way back, when President Bush still had political capital to spend, 
he appointed a neoconservative architect of the Iraq war to head a top 
multilateral development agency. On the other side of the Atlantic, the 
news that Deputy Defense Secretary Paul D. Wolfowitz would lead the 
World Bank was greeted with horror. Speaking for the elites of Europe, a 
Financial Times editorial complained that a World Bank led by Wolfowitz 
would be "no more than an instrument of U.S. power," and Le Monde called 
the appointment "a new manifestation of America's arrogance."

That was March 2005, and much of the European carping seems silly in 
retrospect. Since taking the helm of the World Bank in June, Wolfowitz 
has proved willing to differ with the policies of the Bush 
administration. He resisted its push to weaken the bank's finances by 
pushing the wrong kind of debt relief and distanced himself from the 
administration's anti-science faction by committing the bank to an 
expanded effort against global warming.

But as Wolfowitz co-hosts the World Bank-International Monetary Fund 
spring meetings this weekend, his critics may be vindicated in one 
telling way. Wolfowitz, like the neoconservative movement he springs 
from, represents a strange marriage of brilliance and blind spots. The 
flaw that led him to misjudge Iraq has come back to haunt him at the 
World Bank -- particularly in his new crusade against corruption in 
developing nations.

In his first weeks at the World Bank, Wolfowitz betrayed no signs of 
radicalism. His arrival was greeted by barbs from the World Bank's 
satirical staff magazine, which reported that he brought along "a 1768 
map of Iraq (with hundreds of red x's denoting 'WMDs,' hundreds of black 
x's denoting 'Oil Well$,' and one blue x denoting 'decent sushi 
restaurant')." Seeing what he was up against, Wolfowitz went out of his 
way to charm and disarm, to listen modestly in meetings, to stress his 
respect for the bank's formidable brain trust. Because he arrived at the 
bank with three old associates, two of whom had been involved in the 
Iraq war, the staff's suspicions lingered, proving that the bank's 
complaint culture rivals that of the trial bar.

Then, around January, Wolfowitz changed gears. In a series of tough and 
surprising decisions, he froze loans to India, Bangladesh, Kenya, Chad 
and Argentina, signaling an upheaval in the bank's approach to 
corruption. His predecessor, James Wolfensohn, had recognized 
corruption's importance in holding back development. But that 
recognition had seldom led the World Bank to cut off loans. The new 
Wolfowitz approach amounted to a watershed for the bank.

But it was hardly a watershed for Wolfowitz himself, whose track record 
as a policy insurgent dates to the 1970s, when he arrived in Washington 
as a young intellectual determined to take on the "realist" 
foreign-policy establishment led by Henry Kissinger. While Kissinger 
forged alliances with undemocratic strongmen such as the shah of Iran 
and pursued detente with the Soviet Union, Wolfowitz and other future 
neoconservatives viewed Soviet totalitarianism as a modern echo of 
Nazism and believed in backing only true democracies. Later, when 
Wolfowitz was a State Department official, the same idealism led him to 
fight the department's effort to make nice with dictators in China, the 
Philippines and South Korea.

Wolfowitz's battles molded his mind-set. He acquired a habit of 
disdaining foreign-policy professionals, of doubting their conventional 
wisdom and seeking out alternatives. And because his alternatives often 
proved right -- dictators fell in Iran, South Korea, the Philippines and 
the Soviet Union -- he came to believe that an idealistic faith in 
freedom could sweep aside most obstacles.

It was this outlook that led him into trouble on Iraq. He disdained and 
second-guessed the intelligence establishment, which doubted a link 
between Saddam Hussein and al-Qaeda, and he ignored the Washington 
wisdom that building an Iraqi democracy would be hard, preferring to 
listen to mavericks and exiles who argued the opposite. Hence 
Wolfowitz's extraordinary prewar statements: that American troops would 
be greeted as liberators, that Iraq's oil revenue would spare U.S. 
taxpayers the cost of reconstruction.

Like Wolfowitz's hatred of Hussein, his intolerance of corruption 
combines idealism with a disregard for details. Hussein was indeed a 
monster and a sworn enemy of the United States; the problem was that 
Wolfowitz grasped the big picture without grappling sufficiently with 
the details of nation-building. Equally, corruption in poor nations 
indeed destroys entrepreneurial incentives and swallows development 
assistance. But the fight against corruption involves vexing dilemmas: 
All countries have some corruption, so which ones should the World Bank 
cut off? How do you deal with a borrower who steals a quarter of your 
aid but uses the other three-quarters effectively?

These questions came to the fore in Indonesia in the mid-1990s. The 
World Bank's officials recognized that corruption in the country had 
risen to threatening levels -- some 20 to 30 percent of project loans 
were being stolen. But the officials also knew that projects in 
Indonesia nonetheless got done, and a lot faster than in other 
developing countries. Moreover, Indonesia was a stunning development 
success; each year it lifted a million people out of poverty. After some 
internal agonizing, the World Bank carried on its Indonesia programs. 
Corruption did not seem to warrant a rupture in relations.

So, responding to corruption is complicated. But thanks to his habitual 
mistrust of bureaucratic wisdom, Wolfowitz failed to absorb this point 
from the experts working under him. Instead, he and his immediate circle 
preached an idealistic message of "zero tolerance" on corruption, 
reminiscent of the "you're with us or you're against us" rhetoric that 
Bush used in his early response to terrorism. Because he has failed to 
lay out a sophisticated framework explaining what degree of corruption 
merits an aid freeze, Wolfowitz's decisions to cut off certain countries 
have seemed arbitrary to some critics. In February he launched a richly 
justified effort to postpone debt relief to the super-corrupt Republic 
of Congo. But the government officials who sit on the bank's board 
pushed back, turning the normally formulaic board meeting into an 
all-day fight and forcing Wolfowitz to backtrack.

Then, on April 11, Wolfowitz delivered a major speech on corruption -- 
ironically, in Indonesia. He acknowledged that merely freezing bank 
projects is not a solution to graft; the World Bank's job is to battle 
development problems, not to abandon countries that suffer from them. 
But the speech still failed to explain the criteria under which freezing 
aid makes sense, and Wolfowitz's promise to deploy teams of corruption 
experts to poor countries raised more questions than it answered.

For the past 10 years, the bank has tried to reform civil services, 
foster investigative journalism and promote other policies to fight 
corruption. But the bank's internal assessors have concluded that few of 
these projects worked. Again, Wolfowitz does not seem to have listened 
closely enough to the experts in the bureaucracy he runs. He is too 
attracted to the grand idea, the idealistic vision.

Wolfowitz has time to correct his errors. But he remains a rebel, a 
romantic, a professorial dreamer; he is less skilled at the bureaucratic 
slog of getting ideas implemented. This is not the ideal profile for the 
leader of an unwieldy multilateral agency -- especially an agency whose 
poverty-fighting mission is a notorious graveyard of impractical ambition.

Sebastian Mallaby is a member of The Washington Post's editorial page 
staff and author of "The World's Banker: A Story of Failed States, 
Financial Crises, and the Wealth and Poverty of Nations" (Penguin), 
which will appear in paperback this week.

http://www.washingtonpost.com/wp-dyn/content/article/2006/04/21/AR2006042101756.html
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