Ivanka as President of the World Bank? Don’t Laugh

(Bloomberg Opinion) -- What if Donald Trump were to nominate Ivanka Trump to be president of the World Bank? I know the White House has denied the rumor that he will, but it has denied rumors before. And I am here to tell you that it might not be so bad.

For one, picking Ivanka could work out well for the bank's current standing in Washington. Republicans in Congress have long failed to embrace foreign aid with enthusiasm, even if they sometimes voted for it. If Ivanka were running the World Bank, suddenly Republicans would be committed to the idea of foreign aid in general and the bank in particular.

If you think this unlikely, remember that in the Trump era Republicans in Congress have proved themselves to be a remarkably flexible bunch. They will put up with, defend or deny almost anything, including campaign contacts with Russia or the confiscation of private property under a “state of emergency” to build an anti-immigration wall. Surely they can swallow the mildly bitter pill that is embracing the World Bank. Libertarians may not like that landing point for the Republican Party, but if you want a durable and politically popular World Bank, Ivanka's tenure might just be a dream come true.

You might argue that Ivanka is not qualified to run the World Bank, and I might agree with you. (She would not be my personal pick; how about Carly Fiorina, Kristin J. Forbes or Arthur Brooks?) Yet consider that the previous president, Jim Yong Kim, was highly qualified on paper. He co-founded a famous foreign-aid public health group, has a Ph.D. in anthropology, was a professor at Harvard Medical School and the Harvard School of Public Health and then president of Dartmouth. As an Asian-American, he had the potential to be a powerful symbol of multicultural governance.

Yet by most accounts his tenure at the bank was a failure. He alienated much of the staff, and his organizational changes (after first creating chaos and bad morale) were largely reversed. Now he is leaving suddenly, years before his term is up, allowing Trump to appoint his replacement. Not only that, Kim is moving to a for-profit infrastructure firm, hardly the best symbolism for the leader of an institution that is supposed to be about helping the global poor.

The sad reality is this: If Ivanka took over the reins of the bank, she probably would be an improvement.

Remember that Ivanka already has played a role in the World Bank. In 2017 she was a leading force behind setting up a $1 billion fund, supported by Saudi Arabia, for the bank to encourage entrepreneurship by women. Would it be so terrible if that were the new priority, with bipartisan support? She could spend her time lobbying the U.S. government for a capital increase.

That said, if Trump is a one-term president, she could be gone before she could have much of an impact, one way or the other. It is worth noting that the bank has a large and well-trained staff, the institution is difficult to control or steer, and the processes for loans and projects stretch for many years.

There is also the question of nepotism. I would argue that a modest degree of nepotism is an unfortunate but survivable feature of the U.S. political system. President Bill Clinton picked Hillary Clinton to spearhead his health care plan, after all, and many Democrats supported that idea at the time and remained loyal to the Clintons for years thereafter.

As for the reputation of the World Bank, recall that President George W. Bush nominated Paul Wolfowitz, one of the intellectual architects of the Iraq War, to be president of the bank. For an international institution that does so much work in the Middle East and receives so much support from Europe, such a pick was fraught with reputational dangers. But the work of the World Bank proceeded more or less on normal terms under Wolfowitz, who was president for only two years.

Ivanka, in contrast to Wolfowitz, is actually a pretty popular figure in many countries, especially China.

There is also the possibility that Trump is not really intending to appoint Ivanka to the post, as it would involve too many tedious meetings and limit her ability to speak publicly. Maybe it is a negotiating ploy so that everyone will sigh with relief when the president picks some boring, Trumpian white guy instead.

Again, I would not pick her myself. And her mere nomination by her father would not necessarily get Ivanka the job; the president of the World Bank is chosen by the board. But these days I am “long popcorn.” If her name appears in the headlines, I am not going to be disappointed.

Disclaimer: In the distant past I did some consulting for the World Bank.

To contact the editor responsible for this story: Michael Newman at mnewman43@bloomberg.net

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Tyler Cowen is a Bloomberg Opinion columnist. He is a professor of economics at George Mason University and writes for the blog Marginal Revolution. His books include “The Complacent Class: The Self-Defeating Quest for the American Dream.”

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