The title of “president of the World Bank” sounds a grand one. It is also widely misunderstood. The person who holds it is not the president of the Bank of the World but heads an institution that makes reasonably sizeable loans — $20 billion a year — to developing countries directly and can have a considerable indirect influence on the decisions of private institutions that lend far more between them. The significance of this position, therefore, rests less in its own authority, as such, than in what countries do with the money that they secure from it and whether others then consider that the bank has chosen its clients wisely.

This portfolio has also, traditionally, been the preserve of the US Administration (much as the leadership of the International Monetary Fund is taken to be a “European” domain). The nomination of Paul Wolfowitz, the US Deputy Defence Secretary, to lead the World Bank is without doubt controversial. Mr Wolfowitz has been demonised in much of Europe as the godfather of that mysterious thing called neoconservatism and as the principal architect of the war in Iraq. Much of this criticism is harsh and misguided. Mr Wolfowitz is a more sophisticated soul than his many critics contend and is well qualified to lead this institution at an important time.

Part of the presentational problem about Mr Wolfowitz’s elevation has nothing to do with him. It is that it has followed the choice of John Bolton, a prominent figure at the State Department during the first Bush term and another articulate “neocon”, to be the US Permanent Representative (“Ambassador”) at the United Nations. To confuse and conflate the two appointments would be illogical. Mr Bolton’s promotion was a political undertaking which might have been compensation for his failure to obtain the berth as Condoleezza Rice’s deputy at the State Department. Mr Wolfowitz, by contrast, has emerged because of his impressive qualifications for his new job. His White House links are an asset.

Those qualifications are threefold: first, his talent demonstrated initially as an investment banker and later in public service. Even his most vociferous foes do not deny that Mr Wolfowitz is a clever man with a record of walking into rather conservative institutions and trying to shake them up. This is precisely what the World Bank requires after a decade in which the current incumbent, James Wolfensohn, has shown personal charisma, yet allowed costs to balloon and spent too much time attempting to appease interest groups with a dubious claim to represent the world’s poor. This will be a particularly tough nut to crack.

Secondly, Mr Wolfowitz brings with him considerable experience of Asia (not least as US Ambassador to Indonesia). It is here where most of the success stories of development aid have been found, just as most of the disasters belong to Africa. The bank as an organisation has to be more forceful in insisting that loans or aid are tied symbiotically to the promotion of demo-cracy and a crackdown on corruption.

Finally, he will offer unusual energy and optimism. Mr Wolfowitz is not a cynic about outside financial backing for developing nations. In the right circumstances, he believes it can be transforming. For that reason, perhaps, despite a caricature as a “right-wing hawk”, he has not ceased being a registered Democrat. The World Bank needs a man who can think unconventionally. Mr Wolfowitz is that person.