The World Bank, Good Governance and Conflicts of Interest

Aside from amusement, a couple of things strike me about Wolfowitz’s current predicament.  At face value, and as presented in the media, it is about double standards.  He does not follow the strict standards he and his officials require of developing countries.  And there is something to that.  But it seems to me that his desire to move his partner out of the World Bank in the way he did was in response to a perceived potential conflict of interest were she to stay at the World Bank.

The management of potential conflicts of interest has been central to public administration reform since the mid-nineteenth century.  Bureaucracy has at its very heart the separation of interests – no official will have anything to gain personally or indirectly from any act or decision taken as a public official.  Official codes enforced this, sometimes to surprising degrees.  At one time (and, for all I know, still to this day), it was not acceptable to have a relationship with someone in the same social security office because of the potential for collusion in defrauding the government.

Such rigorous separation, it has been suggested, has been undermined by public management reforms since the 1980s.  Instead of clear rules, we now have codes of conduct and ethics that are more open to interpretation.  And we have a more sceptical public and a cynical media that will read the worst into every situation.

So why is this of interest?  Aside from the double standards, the current situation seems to me to be a knee-jerk reaction on the part of Wolfowitz to the potential for bad publicity.  Moving his partner removed the potential for bad publicity.  But most organisations have to be able to handle conflicts of interest without removing staff.  There are standard ways of doing this – declaraing conflicts openly, excluding staff from certain decsions or discussions etc.  Handled clearly and consciously, there need be no problem.  In this modern day and age, where we talk of learning organisations etc, we are all expected to be reflective practitioners.  Inherent in such an idea is that we are able to critically appraise our own actions and biases in order to manage our personal and professional conduct.  Do we still have to move partners off to some other job?


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