Voting arithmetic examined

With all the excited talk about the candidates and their interviews, lets get down to brass tacks – the World Bank Board is going to hold a straw poll today to check into where countries are. While a formal decision is expected to be taken and announced Monday this straw poll is important to see if the developing countries can coalesce around one candidate and make the Europeans think again about the gentleman’s agreement (read: sordid back room deal with the Americans). Who has the numbers?

It is all a bit complicated because the Bank is in the middle of their capital increase, which has not fully gone through all capitals yet. Meaning the voting rights at the board are neither the pre-2010 agreement levels, nor the final 2010 agreement levels. The Bank corporate secretary helpfully published a new table of voting rights by executive director yesterday.

Here’s the arithmetic as far as we know or can guess.

  • US, Canada, Japan for Kim. Lets add Spain/Mexico in that column since the Mexicans declared their preference. And lets Add New Zealand/Australia/South Korea as well since the Korean president has backed Kim.
  • Latin Americans for Ocampo – Brazil nominated him, the Argentinians wouldn’t dream of supporting one of the others at this point.
  • Three African constituencies for Okonjo-Iweala given the African Union support.
Kim 36.7% Okonjo-Iweala 4.9%
Ocampo 5.7% unknown 52.7%

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Discordant NGOs on second favourite Sachs

While some have remarked about the consistency of civil society organisation input on the process, no one can claim that NGOs present a unanimous voice. To spice things up a bit John Cavanagh and Robin Broad wrote about “Why We Are Not Supporting Jeffrey Sachs to be World Bank President” emphasising how his “approach to development remains top-down and formulaic.” Some choice arguments:

This is a moment when we should be actively seeking a candidate from the South—someone who has walked the walk to embrace a bottom-up approach to development. Many names come to mind, including the South Centre’s Martin Khor and Charles Abugre of the UN Millennium Campaign. The so-called gentlemen’s agreement that allows the US government to select an American to head the bank was wrong in the 1940s; it is even more illegitimate now. …

Today, Sachs’s approach to development remains, at its core, top-down and formulaic. Elsewhere, we have critiqued Sachs’s book The End of Poverty for overemphasizing the power of trade and new technologies to put the poorest on a ladder to modernization. (He once famously said, “My concern is not that there are too many sweatshops but that there are too few.”)

Sachs has applied this approach in his well-publicized Millennium Villages in Africa. African colleagues have relayed criticisms that mesh with our own. Through these villages, Sachs has been a promoter of outside money to pay for (among other things) chemical-dependent “green revolution” farming. One village alone is reported to have had a $50,000 a year fertilizer bill. While this undoubtedly can lead to an initial boost in agricultural yields, it is hardly sustainable in the longer run economically (yields dwindle as soils get compacted from chemical inputs), socially (farmers drown in debts), or environmentally (fossil fuel-based chemical fertilizers contribute to climate change).

Sachs was given the right to reply in The Nation, asking “Who else but me among the widely rumored candidates has a record of standing for the poorest of the poor?” he both robustly defends his own track record and resorts to arguing that he is the best of a bad lot. It seems a bit like Republican support for Mitt Romney from a dreadful field of primary candidates for the US presidency, with Sachs writing:

The other US candidates for the position are certainly not development leaders and have no track records fighting poverty. Some have track records quite to the contrary. President Obama, as far as we know, is not considering Martin Khor, but he is considering Larry Summers.

However there is no doubt that Sachs’ candidacy has shaken up the race. Just ask our friends over at Paddy Power. Sachs has jumped to be the second favourite in the race with odds of 3/1. He remains, however, behind Larry Summers, the favourite on 4/11. The other candidate name circulating in the US press, PepsiCo’s Indra Nooyi, doesn’t even get a look-in from Paddy Power.

And the winner of the poll is…

As we closed the World Bank president poll this week, over 15,000 people had voted for their favourite developing country candidate.

The result? Well, our friends in Indonesia came out in force, resulting in a landslide victory for Sri Mulyani Indrawati, an Indonesian economist and one of the current Managing Directors of the World Bank Group, who beat her opponents with a staggering 87% of the votes.

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What are the odds? And where are the Chinese?

We’ve been waiting with bated breath for the odds makers to get active. After all, free-market thinkers tell us that the market always has the best outcomes and sets the right prices. So surely speculation on this blog, and elsewhere in the media, will be wrong and the market will be right. Finally, yesterday, Paddy Power, an Irish bookmaker (betting site), answered the call. Of course they weren’t the only ones; John Cassidy of the New Yorker made up his own odds last weekend. But Paddy Power, with odds set by the frequency of bets, should give us the pulse of the market. Will they be right?

A review of the odds as of 21 Feb:

Larry Summers  4/11
Susan Rice  9/2
Hillary Clinton  9/2
Kemal Dervis  9/1
Tim Geithner  9/1
Ngozi Okonjo-Iweala  20/1
Trevor Manuel  20/1
Lula da Silva  20/1
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