Paul M. Romer, mostly known for his seminal contribution to endogenous growth theory and defender of special zones (´Charter Cities´), will be the next chief economist of the World Bank. His nomination last Monday was greeted with overwhelming enthusiasm. For example, Danny Quah (LSE and Lee Kuan Yew School), who himself had importantly contributed to convergence theory, posted on Facebook:
„For World Bank Chief Economist, Paul Romer - brilliant deep thinker, fully engaged with humanity's largest challenges. The International Financial Architecture makes an inspired choice.”
Willem H. Buiter (who´s much more than Citi´s chief economist) commented on Danny´s post: „A really great choice! There may be hope for the World Bank after all… .”
Still on Facebook (yes, we´re ageing), Guy Pfeffermann (formerly chief economist at IFC), countered my scepticism with a remark to which all can subscribe: „Oh, I don't know, Helmut. I very much like the emphasis on ideas and their diffusion as a growth factor.”
With Romer, the World Bank can strengthen her profile as knowledge bank. That should help to differentiate the multilateral fauna. It was Paul Romer who enriched growth theory by endogenising ideas and know how, rather than treat human capital as an exogenous residual. From his pioneering work it would follow that open economies grow faster in the longer run if they foster institutions and a social model that help create and disseminate know how. From there to Romer´s idea of “Charter Cities”, new cities in poor countries, is a quick link.
The developmental role of “Charter Cities” is derived from the experiences of the former British crown colony Hong Kong and the Chinese special economic zone Shenzhen. Europe knows what Romer discovered and re-packaged already from the Middle Ages: Stadtluft macht frei.
I regret that the World Bank reverses the newly-established tradition to select her chief economist from an emerging country. With the former and the current chief economists, the World Bank brought the Chinese and Indian development economists Justin Yifu Lin and Kaushik Basu to DC. To my knowledge, Professor Lin was the first chief economist at the bank who did not come from a North American university. Especially the nomination of Lin had reflected Shifting Wealth, the recalibration of the world toward the East; not just economic or political, but also paradigmatic.I venture the hypothesis that the choice of a US economist can be explained by multilateral fragmentation, compatible with Hirschman´s exit-voice dichotomy. The US could not prevent establishment of the AIIB, China´s successful attempt to exit the US-led multilateral banking system. Whatever the official rhetoric, the choice of Romer will perhaps help restore the old world of paradigmatic US dominance in development banking
 For a rare criticism, see Norbert Häring, The World Bank on the way back to the Washington Consensus – with Chicago Boy Paul Romer, 19. Juli 2016. Häring equates the poster city Hong Kong with an neocolonial inclination of the future World Bank chief economist.
 For history and English explanation, see https://en.wikipedia.org/wiki/Stadtluft_macht_frei
 François Bourguignon came from the Paris School of Economics but had started his academic career in Ontario, Canada.