What Kuroda’s appointment says about multilateral leadership

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 Timesaccount 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.