When Paul Wolfowitz finally agreed to resign from the presidency of the World Bank, it seemed that all of Washington breathed a sigh of relief. Of course, the Bank board's assurance that Wolfowitz acted "ethically and in good faith in what he believed were the best interests of the institution" was hard for many to swallow. But as one Bank insider told the Financial Times, "It is terrible--but I guess that was the price to pay to get him out."

It was not just Wolfowitz's role in arranging an overly generous pay increase and promotion for his girlfriend that lay behind his unprecedented departure. The appointment two years ago of an infamous neoconservative and architect of the Iraq War was an unseemly way of showing the world that the Bank belonged to Washington, that other countries' opinions did not matter. He brought in cronies from his Pentagon days, at high salaries, and appeared to be pushing a Bush Administration agenda on issues like global warming and family planning. He was unwanted at all levels of the institution.

Yet the narrow focus on Wolfowitz and his foibles overlooks some fundamental facts about not only the Bank but the entire structure of the international lending institutions. Wolfowitz's resignation won't reform the Bank. But a series of epoch-making changes in the international financial system have been eroding the Bank's influence, along with that of its more powerful ally and leader, the International Monetary Fund.

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