Well, He's Gone...

The Bank won. Wolfowitz is leaving as of the end of June.

As usual, the WSJ has the right take on it: Wolfowitz made the mistake of underestimating exactly how deadly politics apparently are at the World Bank. If he had refused to determine himself what was to happen to Raza, insisting instead that the Bank deal with it, his enemies wouldn't have had any ammunition to use against him, even though he followed instructions, crossed his t's and dotted his i's.

My prediction: the anti-corruption campaign will be effectively dismantled within a year. It will remain, but investigations will take decades to complete and will probably wait until everyone involved is retired or dead before coming to a conclusion that will be released in a press release at 5pm on the Friday before a long weekend.

This is where institutionalized corruption has now found a nice, secure home. How many billions will be siphoned off now?

My thinking right now is that the World Bank has outlived its usefulness. Countries once in deep poverty can now manage commercial loans quite nicely, thank you (think China, Vietnam), and countries with endemnic corruption - India, sadly - should pay a higher risk premium for not being able to reduce corruption, if not eliminate it. That's the price they should have to pay.

Alternatively, relocate the World Bank to one of the third-world countries. Sudan, perhaps, or the Congo; Paraguay might also be a good choice.

I'm sure that there are good people who work at the World Bank, people who really do want to help and make changes. But the institutionalized corruption is simply too deeply seated: the mandarins are in charge, and There Will Be No Change.