Alex Singleton | Journalist and political commentator

This week has been a bad week for World Bank President Paul Wolfowitz. According to Reuters: “World Bank staff and global development organisations called for Wolfowitz to step down as anger increased even after a public apology on Thursday in which he said he erred in the handling of the 2005 promotion of [his girlfriend] Shaha Riza, a former senior communications officer in the bank’s Middle East Department.”

Many opponents of Wolfowitz’s anti-corruption drive within the Bank are using this as a stick to beat that drive with, hoping that Wolfowitz’s departure would give the Bank a new direction, with them being able to get on with their jobs of doling the money out.

Yet corruption remains a serious problem. One of the problems with international development loans given to developing countries in the sixties and seventies and eighties is that they were wasted, often on weapons, lavish lifestyles for elites, and Swiss bank accounts. But, as the past two years of Wolfowitz’s work have shown, fighting corruption can be tricky, when the pressure is political. Countries like the United Kingdom have been using their position on the World Bank board to pressurise Wolfowitz to just hand out the cash in a way that only politicians do: no City investor would act like that.

The World Bank would make more rational investments and have a better chance of fighting corruption and promoting growth if were truly accountable for the money it lent, rather than simply under the pressure of politicians. Its funding should not come from taxpayers but from the private sector. The politicians should be removed from the board. If the World Bank is capablespecially e of delivering good economic growth in developing countries through its investments, it would successfully raise funding; if it was failing to deliver growth, its funding would be cut. That would focus minds very effectively on stamping out corruption.