Customer Reviews: The World's Banker: A Story of Failed States, Financial Crises, and the Wealth and Poverty of Nations (Council on Foreign Relations Books (Penguin Press))
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on October 17, 2004
This is a very interesting book with two main themes. The first one is a biography of James Wolfensohn, the President of the World Bank since 1995. The second one is about the inner workings of the World Bank, a not so well understood institution. The author covers both themes equally well.

James Wolfensohn comes across as a brilliant and irascible complex character. He exudes charm, vision, and eloquence in the outside world towards NGOs, other governmental institutions, States, and the Media. In this capacity, he is not unlike Bill Clinton. On the inside, he is a tyrannical, terrorizing manager displaying frequent tantrums to get the cultural changes and the results he wants from his staff. Here this boss from hell comes across more like a John McEnroe loosing it on a tough line call.

The author's description of the World Bank is equally interesting. At first, the Bank comes across as an autocratic institution which knows what is best for the country it lends to. Invariably, the solution to all the World's problem according to the Bank are mega projects where private consultants and Western companies make a ton of money, the Bank books huge loans, but the country in question can ill afford. Under Wolfensohn influence, the Bank has become more sensitive to the environmental and cultural impact of its financing activities. This is in part due to the Bank opening up a dialogue with NGOs. In this regard, Wolfensohn tenure at the Bank seemed to have been rather successful, as it has radically changed the culture of the Bank.

In view of the above, I strongly recommend this book. If you are interested about economics, institutions, and policy, I also recommend a couple of excellent books. These include "A Term at the Fed" by Lawrence Meyer. This book uncovers Alan Greenspan's management style, and the inner workings of the Federal Reserve (another not so well understood institution). The other book is the excellent "In an Uncertain World" by Robert Rubin, the brilliant former Secretary of the Treasury under Bill Clinton.
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on November 4, 2004
Sebastian Mallaby, editorial writer and columnist at the Washington Post, has come up with a page-turner on the challenges of promoting development, as seen through the eyes of World Bank President James Wolfensohn. Many success stories of the Bank's work are described in fascinating detail. In Bosnia, according to Mallaby, the Bank played an important role in brokering a peace deal between Serbs and Croats and was successful in quickly providing money and expertise for the reconstruction. In Uganda, the Bank was flexible enough to allow a home-grown poverty reduction strategy to take root and to nurture it. But the Bank's failures are also described unsparingly. Mallaby presents a detailed study of how the Bank's condoning of corruption in Indonesia was the root cause of many of the country's troubles during the Asian crisis. He also says that the Bank late and timid reaction to fight AIDS "remains inexcusable."
The portrayal of Wolfensohn is likewise two-sided. Mallaby credits his "instincts as being ahead of his peers" on the need for providing debt relief in the mid-1990s and on tackling corruption. Wolfensohn is also recognized as being instrumental in pushing for greater country ownership of reforms and for the decentralization of the Bank through the relocation of most country directors to the field. At the same time, the book has candid descriptions of what Mallaby considers to be Wolfensohn's failures, for instance his tendency to share "credit with no one."
North-based NGOs come across in Mallaby's portrayal as the villain of the piece, Lilliputians who tie down the Bank and keep it from doing good. The NGOs, says Mallaby, have killed worthy projects by overstating the likely labor and environmental impacts and insisting on standards that developing countries can ill-afford. For example, in Laos "the environmental standards that the Bank proposed for a megadam project matched those of a country like Sweden; this was like telling the Laotians that they must not travel in motorized vehicles unless they purchased brand-new Volvos with passenger air bags."
Not all Bank failures are the fault of NGOs; sometimes, says Mallaby, the Bank cannot succeed because of lack of cooperation by the client. In 1998, the Bank wanted to execute an project to combat AIDS in Russia, but the country's health ministry did not want to acknowledge the problem. When the ministry came around, Russian pharmaceutical makers blocked the Bank, fearing that it would open the drug market to foreign competitors. Russia's medical establishment was also opposed as "hospitals had a large and antiquated infrastructure for treating TB, which would be rendered redundant by the Bank's modernizations."
Mallaby's sympathetic portrayal of the Bank contrasts with some of the harsh characterizations of other observers. In his recent book Why Globalization Works, Martin Wolf calls the Bank a "fatally flawed institution," whose source of "failures was its commitment to lending." Describing the situation when he worked at the Bank in the 1970s, Wolf writes: "every division also found itself under great pressure to lend money, virtually regardless of the quality of the projects on offer or of the development programmes of the countries. This undermined the professional integrity of the staff and encouraged borrowers to pile up debt, no matter what the likely returns." The Meltzer Commission, appointed by the U.S. Congress in 1998, made a similar charge in its report. Mallaby alludes on occasion to this pressure to lend, particularly to middle-income countries, but does give it the importance ascribed by others.
Mallaby presents shifts in the types of lending favored by the Bank as an example of its learning from experience. He notes that the Bank started with the notion that "infrastructure was the route to human betterment." Then it moved from building physical capital into building human capital by funding education projects, then from human capital into social capital by funding projects to improve the quality of institutions. And, very recently, as Mallaby notes, the Bank has partially reverted to its early emphasis on physical capital. Others put a less positive spin on the Bank's intellectual journey. For example, in his book The Elusive Quest for Growth, William Easterly-a former Bank staffer-treats the same evolution as a chase after fads that failed to deliver: "We thought that certain objects associated with prosperity in the industrialized world - dams, roads, schools - could bring success to the developing world. Later, fads changed to include institutional magical objects. Thus we urged governments to embrace democracy, constitutions, independent judiciaries, decentralization to local governments and other magic bullets. None of them worked."
While the book may not satisfy critics of the Bank, its accessibility and broad scope make it required reading not just for experts on development but for anyone with curiosity about global development, the Bank, and James Wolfensohn.
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on October 22, 2004
This is a wonderful book. It is really three stories. One is a story of how the West has tried to tackle global poverty, its failures, successes and U-turns. The other is a story about the West's principal instrument for these policies, the World Bank. Any large organisation, packed with interesting people, dysfunctional teams, and huge challenges will always have a good story inside it and this is no exception. The third is a biography of the leader of this organisation and his influence upon it. These three narratives, all interesting in their own right, are skillfully interwoven to produce a trully thumping read. A real page-truner.
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on September 10, 2007
A story of burning ambition. Make no mistake about it, James Wolfensohn wanted to be head of the World Bank. He desired it from the late 1970s until 1995 when he finally achieved his ambition, becoming an American citizen in a rushed ceremony to make himself more presentable to the political circles in Washington that always select the Bank's chief.

Biographer Sebastian Mallaby, a British-born columnist for the Washington Post and previously the Economist magazine, describes Wolfensohn as "the most ambitious man I know". He reports this son of a Jewish migrant to Australia was "beside himself with excitement" on hearing President Jimmy Carter was considering him for the World Bank's presidency in 1980.

Another 15 years would pass before Wolfensohn, who in a packed life had found time to be an Olympic fencer, Wall Street high flyer and accomplished musician, would get the job of his dreams. What followed was the most turbulent and controversial decade in the bank's history.

Mallaby asserts the upheavals were not all of Wolfensohn's making. He took over from a series of grey, uninspiring functionaries at a time when the anti-globalisation movement was beginning to get up steam. The Bank's 50th anniversary meeting in Madrid in 1994 was disrupted by demonstrators chanting "50 years is enough", denouncing its failure to address world poverty and demanding it be closed for good.

For the one-time Aussie, this was a challenge to be relished and Wolfensohn must have thought that at 60, he had accumulated all the worldly wisdom and experience needed to meet it. That he was to be proved wrong is not a total indictment of the man. There is nothing on Earth quite like the World Bank, a vast, rambling bureaucracy full of brilliant, often contending individuals, at the mercy of an overbearing board, each member with a special agenda, and besieged by non-government organisations full of passionate anger, demanding the impossible and denouncing every minor misstep.

The new man believed he could counter this with his chief assets, sincerity and charm. He could be everyone's friend, uniting donor countries, Third World governments and the plethora of non-government organisations who were his sternest critics, in one noble crusade to ban poverty from the planet. They were glorious, yet doomed ideals well suited to the man described by a colleague as "full of grandiose ideas but not much of a manager".

But was this such a bad thing? Mallaby believes that after a succession of uninspiring technocrats at its head, the Bank needed Wolfensohn's flamboyance and spontaneity, recapturing some of the pioneering spirit of one of its great presidents, Robert McNamara.

McNamara had wanted the bank to have a human face, Wolfensohn wanted it to go over the heads of grasping and often corrupt Third World governments and deal directly with those who would benefit from its loans. In the world of realpolitik neither was wholly achievable, and for Wolfensohn it was a tough lesson to learn.

He did not cope well with failure, and when a coalition of Tibetan activists, the environmental lobby and professional China haters in the US Congress scuppered the Qinghai irrigation scheme, he lashed out at his own staff. "Didn't they ever read the newspapers? Didn't they know that Tibet was supersensitive? - and he would summon people to his office and demand whose arse he should kick first. It was not an edifying spectacle..."

The US presidential transition, at the beginning of his second term, did not help matters. The new Treasury Secretary, Paul O'Neill, was openly contemptuous of the Bank and indeed the entire international aid structure, declaring the world had spent "trillions of dollars on development and there's damn little to show for it". O'Neill offered the startling argument that if South Korea had lifted itself from poverty to middle-class comfort in four decades, every Third World country should be able to do the same.

And yet the Wolfensohn-led bank somehow weathered these storms. After a late start it showed leadership in facing the AIDS threat; the more hysterical NGOs were eventually cut loose and their criticisms ignored, while some of the "Volvo-style" loan conditions, so irritating to many recipient countries, were eased.

Despite 10 years of obstructionism, bitter infighting and over-the-top criticism, the president never lost his enthusiasm for the job. At the end he was even testing the water for a third term - the Bush White House would have none of it - and he could count among his diverse friends and supporters United Nations Secretary General Kofi Annan, the chairman of the Federal Reserve, Alan Greenspan, and Queen Beatrix of the Netherlands.

Mallaby does not come to any hard and fast conclusions about his client. He sees Wolfensohn as an indifferent manager, while giving him credit for broadening the Bank's agenda beyond macroeconomic policy to meet head on the problems of corruption and debt relief. He was able to bring the larger and more responsible NGOs on board but took a long time to realise that others "had no off switch".

The book finishes on an inconclusive note. Was Wolfensohn's presidency valuable? Did he do more harm than good? Perhaps in an increasingly complex world, with so many voices clamouring to be heard, there can no longer be clear-cut answers to questions like these. Suffice to say the World Bank survives and there are no mass demonstrations demanding that "60 years is enough".
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on October 26, 2004
During the current Presidential race I've heard a lot about the current world situation. But only about a very few places. We've heard about Iraq, North Korea, Afghanistan, and a little bit about a few others. But it's a lot bigger world than that. And at the middle of just about everything has been James Wolfensohn.

For the past nine years he has been president of the World Bank. He has become an almost bigger than life character and has molded this unweildy to fit his image. During these years there have been financial crises, the AIDS outbreaks in many of the poorist countries, the emergence of terrorists sanctuaries in states that have basically failed and an immense amount of corruption.

Formed as one part of a trio, along with the United Nations and the International Monetary Fund, the World Bank was to fund the re-development of Europe and Japan after World War II. As time went on, it became the lender of last resort to developing countries and in a perpetual tug of war between the left and right views.

Wolfensohn, is a brilliant, vain, well-meaning, short-tempered, self made multi-millionaire. He took over determined to remake the World Bank. He came up against a very messy reality of governments that didn't work, and problems almost beyond comprehension let alone solution.

The resulting book is an eye-opening presentation of the challenges and contradictions of the West's efforts to enlarge the world's wealth. Very well written, you will come away from this book with an entirely different view of the world. Excellent.
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on July 12, 2006
Mallaby has written a fine biography of James Wolfensohn. But perhaps more interestingly the narrative paints a vivid description of international development over the last 30-40 years. The ever changing World Bank is detailed with all qualities laid bare; what I most enjoyed about this book was the balanced analysis it recieved.

It's oh-so-easy to get caught up in the anti-globalisation rhetoric that you come of the opinion that the World Bank is really a force for evil in the World - it's clear that this is not the case. Its failures are reasonably frequent and quite high profile, but that, one might conclude, has more to do with the type of work it does and the quantity of work it does. What I also enjoyed was the look he took at the NGOs role in international development; their vocal, yet not often rational (or informed) views hold much weight and can't be ignored.

Mallaby has collected stories from figures all over the world to paint a vivid and exposing picture that any student of international development would be a fool to ignore.
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Where no Banker has gone before...

Timing is an important element in the publication success of a book. Here, the intention is twofold. On the one hand Mallaby reviews the ten-year trials and tribulations of the World Bank's outgoing president, Jim Wolfensohn. On the other, he aims to provide a critical overview of the broader world and historical context in which the World Bank has been operating since its beginnings 60 years ago. While the period prior to Wolfensohn is not accorded the same detail, it is nevertheless treated as an important background to understand the Wolfensohn era. The author concludes with a few recommendations for the incoming President.

As a biography of Jim Wolfensohn, the book is a success and a good read. It's full of personal stories, gossip and astute observations. Based on extensive interviews with Wolfensohn, other World Bankers and many friends and observers, the author reveals traits of the man that few would know outside the inner circle of friends and some of his business partners. He is ambitious and driven by his search for accomplishments and adoration, yet his visions are not necessarily backed up by clear strategies and implementation methods. He is a banker, not a development professional. He is also a philanthropist and a musician. Mallaby vividly paints the personality with all his strengths and weaknesses: the duality of a kind of Dr. Jekyll and Mr. Hyde of development banking. His term at the Bank has resulted in many new ideas, some false starts, and some long-term successes, Mallaby contends. But the route to achieve those was difficult and often confrontational. It was frustrating him and draining on his management team and staff, not to speak of his board. In real terms, Wolfensohn shook up the World Bank system - with reason - and overall the Bank is a better place for it: it is more focused on poverty alleviation, works more closely with the borrowing countries and has managed to keep the rich lending governments, more or less, on side.

Biographers often take the side of their subject. Events and people are seen through a close-up lens and objectivity is of lesser importance. This is very much the case here. Mallaby's lens is not only focused on Wolfensohn and the World Bank, he uses a fish-eye lens where anything beyond the focus tends to get distorted or blurred. His bias shows strongly in his repeated, yet generalized, criticism of NGOs, his belittling of the UN Millennium Development Goals and of the UN agencies' capacity to deliver development programs. While it is understandable that details are omitted and development policies and case studies cannot be discussed in depth and breadth, judgemental statements that are not substantiated create uneasiness in the reader. For example, NGOs are criticized for not embracing the World Bank's new Water Strategy in 2002 without the author giving any indication of its substance or the reasons why NGOs did not want to buy into it. He laments that NGOs, or "No-Gos", don't have an "off-switch". "Participatory" consultations appear to be described as successful only when the groups consulted agree with the World Bank policy in the end. He almost feels sorry for Wolfensohn in his efforts to reach out to such groups. Finally, Mallaby's condescending comments on Joe Stiglitz reflect more than journalistic arrogance.

The question arises about the intended audience(s) for this book. People interested in fascinating, colourful personalities will find the person at the centre of this story worth their while. The development professionals, such as myself, will read with interest about the internal World Bank struggles during Wolfensohn's reign. They can easily balance the biases and fill in the source gaps from their own knowledge base. However, the general reader might be well advised to consult additional material on development strategies and country programs and accept this journalist/biographer's views with a pinch of salt. [Friederike Knabe]
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on April 15, 2008
I have read some books about Africa lately and I was interested in knowing the work made by the World Bank in this continent. Althought the book is focused in James Wolfensohn Presidency, this was a revealing reading that shows all the difficulties the Bank must face in order to provide the best aid to the target country and to keep the bank shareholders satisfied. Adding to that, the book describes the problems in the management of the Bank, its organization and inertia, the always problematics NGOs, and more importantly, the way to help countries in their "economic development", which is by far a very difficult thing to do. There is no recipe for that, you can establish a framework but there are other factors to consider in a case by case basis -- certainly reading Wolfensohn experience ultimately provide that, experience and knowledge. This is a well researched book, readable in its whole extension.
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on October 20, 2004
Sebastian Mallaby uses the story of the impossible yet impressive Jim Wolfenson as a vehicle through which to scrutinize the challenges, successes and failures of world development. These two fascinating stories complement one another brilliantly - the former outrageous and fun; the latter moving and important.

Mallaby's intelligent and lively writing makes the complex and complicated accessible and understandable, yet there is no feeling of dumbing down the issues. So often vilified, in here The World Bank's sometimes helpful, sometimes destructive, always worthy attempts at helping the world's poorest are analyzed in the context of international politics and environmental issues.

Anybody interested in protecting America in this age of terror needs to get their heads around failed states, and this book is the place to start.
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In 1944 delegates from 44 countries gathered at the Mount Washington Resort to establish the World Bank. The resort, nestled in the White Mountains of New Hampshire, was and is awe inspiring. The vista is so surreal and magical one can almost expect a princess to alight from a carriage in front of the resort at any moment.

The initial purpose of the Bank was to establish loans for the reconstruction of countries devastated by the war inflicted on Europe during World War II, yet went on to such loftier visions as poverty reduction . . . in other words, the Bank was determined to save the world. The story of the World Bank and one of its most infamous and controversial bank presidents, James Wolfensohn, is recounted in a stunningly engrossing narrative by Sebastian Mallaby in THE WORLD'S BANKER: A Story of Failed States, Financial Crises, And the Wealth and Poverty of Nations.

Jim Wolfensohn, the "prince" of this tale, was appointed to the post of World Banker in 1995 by the then President Clinton. Taking on the task of heading an organization of 10,000 employees would not be easy by any stretch of the imagination, to say nothing of overseeing the lives of billions of people in the world. Jim could be seen playing his cello in Carnegie Hall, directing projects from Chad to China, implementing programs determined to eradicate AIDS in Africa, and dealing with the NGOs 'n Exxon. And so begins the tale of a behemoth organization and a megalomaniac.

If one is unfamiliar with the history or workings of the World Bank, this is the perfect introduction. The reader needs to keep in mind that the author is naturally biased in his writing and this is reflected in his lack of sympathy toward the NGOs (nongovernmental organizations) and apparent sympathy toward Jim Wolfensohn. I was unexpectedly fascinated by the ability of Mallaby to weave a tale that reads like fiction. Get your chips out, grab a Coke, pick up a copy of this book and be prepared for some darned good entertainment and lots of food for thought.
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