Wolfowitz resignation demonstrates World Bank corruption

What does the resignation of Paul Wolfowitz from the World Bank tell us about the moral compass of that particular organisation?

From AAP:

Controversial though he was as successor to James Wolfensohn, especially among European countries that had opposed the Iraq war, the Bush administration engineered his move from the Pentagon to the World Bank presidency without dissent.

Once there, he quickly reached out to poor African nations, where he encountered little criticism over Iraq, and pushed a deal to cancel the debts of highly indebted poor countries.

Soon after, he moved with characteristic zeal to launch a controversial anti-corruption campaign at the bank where he again clashed with European governments, who worried the effort could punish the poor by slowing the flow of aid.

Wolfowitz, however, prevailed and offered no apologies for the bruising campaign, which drew criticism both within and outside the bank.

But just weeks after securing a deal on anti-corruption, the former Pentagon deputy ran into a storm last month over charges of preferential treatment in his handling of a promotion and pay rise for his companion and bank employee Shaha Riza.

It's been clearly demonstrated that Wolfowitz stepped back from the process involving his girlfriend, though he surely would have lobbied on her behalf, and the Board's setting of the bar at the high level it now has is somewhat problematic for them, as the WSJ points out:

In the winter of 2006 an email was sent to the investigations hotline of the World Bank's Department of Institutional Integrity, or INT. Its subject was the "Hypocrisy of ED Tom Scholar."

"Please know," read the text of the email written by a bank employee, "that UK ED Tom Scholar is continuing an affair with [a bank employee]. This woman has been given preferential treatment in [the department] because of her relationship with this powerful ED, this affair is well known, and is in violation of the Bank Staff Rules and the Boards Standards of Conduct."The double standard is palpable. For me, though, the really troubling issue is the World Bank's lack of will to attack corruption both within its own walls and in those countries to which it provides significant help.

I'm preparing a post on the amount of aid the West has given to Third World countries in the last 50 years - a staggering $2.3 trillion - and how small the positive impact has been.

The World Bank is used for buying the political favours - votes at the UN and various world bodies - of Third World nations by the Europeans. Wolfowitz rained on their parade and now the Europeans have managed to unseat a man demonstrably dedicated to weeding out corruption and achieving real results in Africa.

Let's hope that George W Bush sends a signal to the World Bank that he is serious about dealing with the issues at the World Bank and appoints someone that will build on Wolfowitz's good work.