Glorifying Mediocrity.

• Author: SACHS, JEFFREY

It's the age old story: two powerful, outdated bureaucracies fighting change. But why is the Clinton Administration in on an act that's clearly doing disservice to the global poor? Bill Clinton, call your office! Ask for the Department of Presidential Legacies.

This March, the International Financial Institution Advisory Commission chaired by Allan Meltzer issued a report to the U.S. Congress on reforming the International Monetary Fund and the World Bank. The report calls for both institutions to refocus their activities on their core mandates -- in the case of the IMF, helping to preserve global financial stability, and in the case of the World Bank, helping to reduce global poverty. The Commission charges that both institutions have lost their way as the United States and Europe have extravagantly overused and misused them. In the past twenty years, the IMF has been assigned with managing developing country debt crises, managing Western aid to post-communist economies, and running financially bankrupt and economically destitute Sub-Saharan countries. The World Bank, for its part, has been called upon to lend everything to everyone, with no sense of prioritization by country or by type of lending.

The report immediately produced a rather heated controversy in Washington, at least as international economic matters go in a city much more interested in domestic politics. It has been denounced in fervid and hyperbolic terms by both the Clinton Administration and Democratic leaders in Congress, as if the report called for the closure of these institutions, or insisted the U.S. had no interest in poverty alleviation. Even though the report calls for greater U.S. aid to poor countries, as well as outright debt cancellation for the poorest countries, the Administration and its congressional allies have denounced the report as extreme and neo-isolationist. They have attacked specific details -- many of which are presented in the report as illustrations, not as key conclusions -- while typically avoiding or ignoring the report's major themes.

This is all another case of permanent government working overtime to ensure that no job, no responsibility, no task is ever taken away from powerful Washington bureaucracies without a down-in-the-dirt battle. Even though the IMF joined the business of poverty work by accident in the 1980s (over the doubts of many skeptical governments) and has had a shoddy record ever since, the Clinton Administration and IMF...