The row over the World Bank president's behaviour reinforces the need to safeguard its lending policies from ideological pressure.
Last year, Paul Wolfowitz's appointment as president of the World Bank was widely criticised because of his previous prominent involvement in the US Republican Administration and his role as a chief architect of the US-led invasion of Iraq.
There were some, however, who suggested that his keen intelligence, combined with a clear commitment to poverty alleviation in the developing world, might counterbalance this legacy. Indeed, until recently, this seemed to be the case.
Wolfowitz has won praise for his determination to tackle the difficulties in achieving economic growth in Africa, particularly around the need to fight corruption. He has also supported moves to reinstate science and technology infrastructure as an investment priority within the bank.
But his reputation has unravelled rapidly in the wake of charges that he misused his authority to secure a promotion and pay rise for his partner Shaha Riza.
Earlier this week the bank found Wolfowitz guilty of breaking the institution's code of ethics by taking such actions and trying to prevent the public finding out. And last night (17 May) Wolfowitz announced that he will resign from his position on 30 June.
A credibility crisis
But despite his resignation, the bank now faces a credibility crisis. Not only have Wolfowitz's actions resulted in the inevitable charges of double standards, but the affair has catalysed concern over attempts by his administration to impose a neoconservative ideology on the bank's lending policies, including those related to science.
For example, according to media reports a senior bank official appointed by Wolfowitz attempted to change the wording in a report on investment in clean energy technologies produced under the auspices of the bank's chief scientist, Robert Watson.
Watson told the Financial Times last month (April) that Juan José Daboub, a former finance minister from El Salvador, tried to change the term "climate change" to vaguer concepts such as "climate risk" and "climate variability".
There is no evidence that Wolfowitz himself was involved in this. But Daboub's proposals are clearly aligned with the position of the US Republican Administration, which continues to dispute human-induced climate change as an established fact, despite a global scientific consensus to the contrary.
The attempted modifications were also clearly intended to weaken the bank's strong stand on the need to mitigate the impacts of climate change.
Daboub has also been at the centre of a separate storm over claims that his office sought to reword a statement on health strategy to virtually eliminate any discussion of sexual and reproductive health — despite the bank's major commitment to this area in the recent past.
The move was widely seen as reflecting a desire to reduce emphasis on the importance of contraception and other forms of family planning — again in line with the neoconservative policies favoured by the US Republican Administration.
Rebuilding a reputation
Of course, even though Wolfowitz is leaving, there is no guarantee that the broader political situation facing the bank will change. Under the current informal agreement between donor governments, the United States chooses the bank's president, while Europe and other donor nations select the president for the International Monetary Fund.
Indeed, some people feel that a chastened Wolfowitz, had he been allowed to retain his position, might have proved more supportive of policies reflecting a genuine international consensus on issues such as climate change and reproductive health.
Certainly there is general agreement that further polarisation among the bank's main donors could seriously undermine the organisation's effectiveness precisely at a time when it faces major challenges in raising enough capital to support its next round of development assistance funding.
But it is also clear that keeping Wolfowitz in his post would have damaged the bank's reputation, perhaps even more so — especially given that promoting good governance is becoming a cornerstone of effective aid policy for a growing number of countries. The bank's failure to keep its own ranks in line has already been said to be weakening its effectiveness. Regional managers in Africa, for example, are reporting that their efforts are increasingly being ridiculed.
The World Bank must now take steps to restore its shaken credibility — in all of its policy areas.
Ensuring that its science policies are protected from inappropriate political influence — by enhancing the bank's scientific advisory mechanisms, or ensuring close monitoring by external groups — might be one way of doing so.
Such action could reinforce the bank's efforts to steadily rebuild a reputation for sensible and sensitive investment across the developing world — including renewed support for building capacity in science and technology.