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What Kuroda's appointment says about multilateral leadership

It now appears that Haruhiko Kuroda, currently the president of the Asian Development Bank (ADB), will take the helm at the Bank of Japan (BOJ). For weeks, Kuroda was thought to be one of several contenders for the spot, although most accounts didn't have him as the favorite. The most immediate implications of the appointment have to do with Japan's controversial currency moves. But the fact that Japanese Prime Minister Shinzo Abe has apparently reached for someone in a multilateral post is itself noteworthy. 

It had appeared that Kuroda's ADB posting was hurting his chances. First, he was distant from Tokyo and no longer part of the inner finance ministry circle. Some recent reporting had also suggested that Japanese officials were worried about losing their leadership privileges at the ADB if Kurodo moved to the BOJ. A Japanese official has always led the Manila-based regional bank. Via the Wall Street Journal:   

Some Japanese officials worry that if Mr. Kuroda leaves early for the BOJ slot, Japan risks losing the perch it has controlled since the founding of the Manila-based institution in 1966. For Japanese finance officials, the ADB is Japan's equivalent of the World Bank for the U.S. or the International Monetary Fund for Europe—an international financial institution they expect to run, a platform for global influence. Losing the ADB for Japan would be a blow, especially at time of growing insecurity about the country's diminished standing in the region.

It is unclear, however, whether Japan's hold would really be threatened, or whether that argument is being put forward by those advocating Mr. Kuroda's rivals.

It wouldn't be illogical for Japan to worry about its traditional ADB privileges. China has become an increasingly important ADB shareholder. What's more, the most recent leadership races at the World Bank and International Monetary Fund put new pressure on national privileges at key multilateral organizations. If Tokyo was in fact concerned about the ADB perch, it raises the possibility that the meritocratic wave in multilateral leadership is extending to regional organizations.

However, it now appears that those concerns were trumped by the perceived benefits of Kuroda's multilateral profile -- and that says something about the relationship between leadership in multilateral organizations and national governance. Kuroda undoubtedly acquired diplomatic skills at ADB that will serve him well at the BOJ, which has been under fire for its inflationary moves. As the New York Times' account put it, "Mr. Kuroda’s global experience could help Tokyo navigate that foreign criticism." There is evidence that Abe saw Kuroda's global experience as a decisive advantage over rivals who had only worked domestically:

Abe [commented] last week on the need for a new governor to have international contacts as a key qualification for the post, suggesting that he prefers someone with experience in financial diplomacy. Muto spent most of his career in domestic affairs, climbing the career ladder at the ministry of finance to become its top bureaucrat.

"Japan now needs a governor who can join, communicate and convince people in the inner circles of global finance," Abe told parliament on Wednesday.

But does the phenomenon of top officials sliding seamlessly between senior multilateral and national posts do violence to the already battered concept of international civil service? When officials take posts at the IMF, World Bank, the UN, or a regional organization, they pledge to work for the organization and, more broadly speaking, for the regional or international community. Doing that involves shedding -- or at least subsuming -- national loyalties. That's a hard task even when multilateral officials aren't thinking about a plum national post. Recent research by Liesbet Hooghe indicates that even top EU officials struggle to adopt a multinational mindset (hat tip to my AU colleague Mike Schroeder). 

Increased fluidity between national and multilateral leadership posts may yield more savvy, experienced, and effective national officials, but it could also make the already tough task of producing credible international civil servants all the more challenging. 

World Economic Forum

The Multilateralist

Learning to love the G20

Reuters has a story up highlighting criticism of the G20 by European Central Bank board member Jörg Asmussen. He reportedly warned yesterday that the G20 might be running out of steam as a vehicle for economic and financial cooperation:

Asmussen, who attended the first G20 meeting in Berlin in 1999, working for the German finance ministry at the time, said the forum had lost momentum in recent years, also "to an important extent due to a waning sense of urgency".

"Global economic governance as we know it today seems to be well equipped to manage a global crisis. But it is less effective during normal times, which also lessens its ability to prevent future crises," Asmussen said in a speech in Berlin....

To revive the G20's power, Asmussen said it needed to adopt a more transparent decision-making process and a more focused and concise operational agenda.

At least as quoted, Asmussen's speech pretty much tracks the conventional wisdom on the G20: It played a useful role during the financial crisis but hasn't done much of value since. Its meetings now produce vague and ambiguous declarations that consume chunks of senior policymaker time to little apparent effect (witness the confusion over whether the G20 actually criticized Japan's currency moves).

This kind of criticism is fair enough as far as it goes. But it also implicitly devalues what is actually an extraordinary accomplishment: creating a global forum that can play a useful role during economic crises (even if it can't do much beyond that). As Daniel Drezner has pointed out repeatedly on his blog, avoiding cataclysmic outcomes is a big deal:

Formal and informal global governance structures still perform some important tasks at preventing worst-case scenarios from metastasizing, be it in security or economics.  Call it "'good enough' global governance" -- it's not a new world order or anything, but it's also not as chaotic or dysfunctional as many pundits proclaim.

If G20 meetings and consultations during non-crisis periods  do nothing more than keep lines of communication open and the crisis machinery well oiled, that's more than enough.