Crowdsourcing: Putting the "Public" Back in the Public Sector

If the global financial crisis taught us anything, it's that leaving the fate of our collective economic health in the hands of a select few members of an exclusive club with their own narrow agenda is no longer a credible way of doing business. That's true for almost every institution involved, from the banks that crafted impenetrable mortgage bundles for gambling purposes to the decision-making bodies that oversee international economic stability.

While reforming the private institutions that made a casino out of the U.S. housing market may be proceeding at a tepid pace, change at big public sector institutions such as the International Monetary Fund is gaining speed.

It won't be much longer that the IMF, created after World War II, can select its leadership like it's still the 1940s -- in back room conversations between the Americans and Europeans, who pool their majority of weighted votes behind a European and leave no real room for other qualified candidates from around the world. There is a "stench of colonialism wafting around the IMF," as Nancy Birdsall, president of the Center for Global Development puts it bluntly.

This arcane old selection process is confronting new realities of the 21st century: emerging economies that deserve a bigger say because their significant contribution to the global economy is undeniable and unstoppable, and a world that has come to expect much more openness and fairness from its public sector institutions.

So who, in fairness and based on merit, should be the next leader of the IMF? Birdsall and the CDG have opened the floor to everyone with an opinion. They are crowdsourcing input through a survey about candidates and what the process and qualifications for selection should be. And the crowd, it turns out, has good judgment.

"We have good reason to believe the results represent the collective interest of the international community. Certainly it reflects opinion more than the current IMF leadership, who have incentives beyond just what they think would make these institutions run well," explains Lawrence MacDonald, the CGD's vice president for communications and policy outreach.

Crowdsourcing is on a powerful roll. One need look no further than the Egyptian revolution, of course, a movement formed out of a variety of demands and solutions that originated from far-flung and demographically diverse groups. But it's also being used to aggregate data on radiation levels in Japan from sources other than government officials. It is helping track the effectiveness of public services such as health care and schools in Kenya. And it's publicizing instances of election fraud in Latin America. Ordinary, informed citizens everywhere are forcing the public sector to get with it.

"There's going to be increasing pressure to say 'couldn't we, please, have a more sensible system for choosing the leadership of major international institutions?'" says MacDonald.

The CGD ran its first crowdsourcing survey when a new leader for the World Bank was being chosen back in 2007, through a similarly opaque process and under similarly unexpected circumstances. World Bank President Paul Wolfowitz had been forced to resign following revelations that he had helped secure monetary gain for his girlfriend, a former World Bank employee. A more transparent review, posits Lawrence, might have averted the leadership crises at both the World Bank and the IMF.

"Any kind of vetting for a CEO usually eliminates people with potentially destructive personality flaws. Not only is the current system not giving legitimacy to the institution, but it's also got a pretty crummy record of selecting leadership with their personal lives in disarray. As a result, we've had two emergency transitions in a row," Lawrence says.

The CGD World Bank crowdsourcing project was a shot across the bow in a quietly festering conflict. Back then, no emerging economies dared say publicly what they did in private. This time around, though, those outside the United States-Europe clique are emboldened by the public's ever-expanding expectation of transparency, and also by the undeniable fact that they deserve more say because their contribution to the world economy is critical and growing by the day.

Now the biggest of the emerging economies at the IMF are speaking out more publicly than ever about the inherent unfairness of the current system, calling it "obsolete" and saying it "undermines the legitimacy of the Fund."

That's exactly what the crowds are saying, too.