World Bank Mission Creep
Power is as power does
Robert Zoellick the newish head of the World Bank is doing what the heads of all un-accountable public bureaucracies have the incentive to do; grow their power by taking on more duties than they were originally chartered to do.
Private banks (those that arent being bailed out that is through 'emergency credit' and 'monetary policy') have to show a profit through making a return on their capital. Otherwise their capital investment goes elsewhere, where it will return a profit. The World Bank doesnt have the discipline of the market, as it is funded, and has been for more than 50 years, by governments. So if you work for the World Bank, or especially, if you, like Zoellick, head it up, man are you in the pink.
"The Bank" has more than $200 billion in assets. That is alot of money which is not subject to any authoritative oversight nor market discipline. So of course with a power base like that, and with the poor countries - most of course but not all - getting richer through globalization (the internet and improved transportation technologies and trade and capital markets) what does an outdated institution do? Well, find something new to do !
So Zoellick wants the Bank to trade currencies and provide financial services just like a private bank. Of course the only thing is that "the Bank" doesnt have to pay taxes nor fight in the market for capital. Thats not really fair to those that do now is it?
Robert Zoellick the newish head of the World Bank is doing what the heads of all un-accountable public bureaucracies have the incentive to do; grow their power by taking on more duties than they were originally chartered to do.
Private banks (those that arent being bailed out that is through 'emergency credit' and 'monetary policy') have to show a profit through making a return on their capital. Otherwise their capital investment goes elsewhere, where it will return a profit. The World Bank doesnt have the discipline of the market, as it is funded, and has been for more than 50 years, by governments. So if you work for the World Bank, or especially, if you, like Zoellick, head it up, man are you in the pink.
"The Bank" has more than $200 billion in assets. That is alot of money which is not subject to any authoritative oversight nor market discipline. So of course with a power base like that, and with the poor countries - most of course but not all - getting richer through globalization (the internet and improved transportation technologies and trade and capital markets) what does an outdated institution do? Well, find something new to do !
So Zoellick wants the Bank to trade currencies and provide financial services just like a private bank. Of course the only thing is that "the Bank" doesnt have to pay taxes nor fight in the market for capital. Thats not really fair to those that do now is it?
posted by Cameron Weber at 12:11 PM
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