When I read about Secretary of State Hillary Clinton’s possible run for the World Bank Presidency one question immediately occurred in my mind – do all World Bank Presidents have money background? Hillary Clinton was member of the Board of Directors of Wal-Mart, a position that we rarely think of when we initially think of her, and one that is debatable as to whether it could be under the category of money background. We tend to think that leaders of organizations that deal with money – such as the World Bank Group, the International Monetary Fund and the World Trade Organization, for example – have business or bank experience, understand the economy, and that their background speaks for their expertise on how money should be spent. This article aims at answering the aforementioned question – do all World Bank Presidents have money background – and not the competency of the current President and previous Presidents.
In this article I briefly define money background as experience in the private and banking sectors managing money.
Wikipedia is once again a great source to start this research. It even contains the fields that the World Bank Presidents had been in.
However, I will take a further look at the information on the World Bank’s official website.
There have been eleven Presidents of the World Bank. Eight of them had a money background – Eugene Meyer, Eugene Black, George Woods, Robert McNamara, Alden Clausen, Lewis Preston, James Wolfensohn, and Robert Zoellick who is the current President.
Eugene Meyer – the first President of the World Bank – managed investment funds dealing with the automobile, chemical, copper, and gold industries which brought him significant profits.
Eugene Black was part of Harris, Forbes & Co., an investment firm. The banking and the investment sectors were where he spent the bulk of his career, the most suitable background for a World Bank President.
George Woods worked for Harris, Forbes & Co. which would later pay for his education in banking and finance. Mr. Woods would raise to the position of Vice President of Harris, Forbes & Co. and later of Chase Bank after the latter acquired that company. And that’s not all. George Woods would later become President and member of the Board of Directors of First Boston Corporation.
Robert McNamara became President of the Ford Motor Company. His business education – a B.A. in economics at the University of California at Berkeley and a Master in Business Administration at Harvard University – especially his MBA degree, according to the World Bank’s website would substantially help him in managing the World Bank making it more responsive to the poor countries rather than the investment community.
Alden Clausen worked part-time for BankAmerica – what we know today as Bank of America – and later became its CEO.
Lewis Preston worked for J.P. Morgan, headed its office in London in 1966, became its President in 1978, and its Chairman and CEO in 1980, according to the World Bank’s website.
James Wolfensohn worked for Darling & Co., a banking institution, and would later become a director of its major shareholder Schroeders, based in London, and a senior executive at Salomon Brothers, a Wall Street investment bank.
Robert Zoellick is former Chairman of Goldman Sachs’s Board of International Advisors, among other things.
Meanwhile, the other three former Presidents of the World Bank – John McCloy, Barber Conable, and Paul Wolfowitz – didn’t have money background.
John McCloy was Assistant Secretary of War, and, according to the World Bank’s website, mobilized the U.S. economy for war, which I interpret as the part of his experience that was closest to what is expected from a World Bank President to do – understand the economy. He would become Chairman of Chase Manhattan Bank, an experience that he obtained after he was President of the World Bank Group.
Barber Conable had a political rather than corporate experience. He was a state Senator in New York and later a U.S. Representative where he was Ranking Minority member of the Ways and Means Committee which has jurisdiction over trade agreements and revenue measures, among other things, which probably helped him in his job as President of the World Bank.
Paul Wolfowitz has a longtime government experience. He is former U.S. Ambassador to Indonesia and former Under Secretary of Defense. Mr. Wolfowitz is probably most famous for being a major architect of the war in Iraq.
My conclusion is that not all World Bank Presidents have money background, and based on these findings it is not necessary for someone to have such background in order to head an organization that deals with money.