Appointing the next Managing Director of the IMF

Dominique Strauss-Kahn has been accused of a horrible crime.  Like everyone else he is entitled to the presumption of innocence until proven guilty.

We may, however, soon find ourselves looking for a new Managing Director of the IMF, either because DSK is involved in a legal case or because he has declared himself a candidate to be President of the French Republic.

The speculation has already begun (see Alan Beattie in the Financial Times) with Christine Lagarde being touted in some quarters as a likely successor.

Under an unwritten agreement, the IMF’s managing director has always been European and the president of the World Bank has always been from the United States. (Jim Wolfensohn had to take out American citizenship to get himself nominated.)

This seems a good time to recall the Leaders’ Statement at the G-20 summit in London on 2 April 2009:

we agree that  the heads and senior  leadership  of the  international financial institutions should be appointed through an open, transparent, and merit-based selection process;

This is important for four reasons.  First, we want good people in these jobs. This is more likely if we thrown the field open to good people like Kemal Derviş and Trevor Manuel as well as Americans and Europeans, and make a choice based on merit not nationality. Second, people in these roles should owe their allegiance to the institution not to their own government.  Third, it is important for the legitimacy and effectiveness of these institutions that they do not appear to the rest of the world be the fiefdoms of rich and powerful nations, to be used as sinecures for supernumerary or inconveniently-placed politicians. Fourth, it brings the G-8 and G-20 into disrepute to say these things in communiques if we have no intention of implementing them.

The traditional next step is for the Europeans to do a deal behind closed doors, get American agreement, and then to accompany the announcement of a fait accompli with a lot of public hand-wringing about how the process will be better next time.

The Europeans want a fair and open process for the appointment of the next President of the World Bank  rather than having to accept another imposition from the Americans. The only way to achieve that is to relinquish our hold on top job at the IMF.  It looks as if we may shortly have the opportunity to do it.

8 comments on “Appointing the next Managing Director of the IMF”

  1. Hi Owen,

    Myself, I would applaud a transparent merit based process. However, who has the merit to lead the IMF? The one who can get through the interviews the best? Winging it? I was not extremely impressed by the tenure of Kemal Dervis at UNDP. Love him or hate him MM Brown did better.

    In some way, to have a politically appointed and thus politically accountable head of the IMF could have some allure. At a certain level, the technocrats have to concede to the democratically elected oversight. Ministers and presidents are in general not technocrats, and for good reason.

    1. Sam

      I rarely disagree with you, but on this occasion I beg to differ. I’m open to the idea that someone who has political credibility is more important than technical skills (though I would put the capacity to lead a large, internationally dispersed organisation ahead of either of those). But there is nothing to stop the shareholders from specifying the relative important of these different attributes in the job description and in the recruitment process.

      Surely you don’t believe that the appointment should be restricted to Europeans, and decided as part of a political bargain?

      Owen

  2. I repeat my first line: I would applaud a transparent merit based process. I would applaud the appointment of the best person for the job instead of the inevitable white male.

    Sometimes I am confused, and what I write reflects this confusion. What should the head of IMF do? Should he be the One Leader, or should he be the public face of the organisation? A lot of questions.

    Indeed, a process of constructing a balanced job description could take care of my remark.

  3. NGOs released a latest common position last month: ‘A professional approach to selecting the IMF boss’, online here:
    http://www.brettonwoodsproject.org/art-568253

    This paper sets out the three key elements to ensuring a successful process next time: a focus on selecting the best candidate available; a clear, fair, and transparent process; and the legitimacy gained from the backing of a majority of countries as well as IMF voting shares.

    It is co-authored by ActionAid, Afrodad, Bond, Bretton Woods Project, Cafod, CRBM, Christian Aid, CIDSE, 11.11.11. Halifax Initiative, Eurodad, Jubilee Debt Campaign, Forum Syd, New Rules for Global Finance, The Norwegian Forum for Environment and Development, Oxfam, The Social Justice Committee of Montreal, SLUG, WDM, TWN and Weed.

  4. It has come to pass……..DSK has resigned.

    I for one would prefer to see the BEST candidate win the job. BUT……maybe the best candidate also needs to receive the nod from the leading countries too.

    I agree with the sentiments. There is a stronger push to make the process open and transparent this time around.

    And as an Australian I hated to see Jim W suck up and become an American to win the WB job.

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Owen Barder

Owen is Senior Fellow and Director for Europe at the Center for Global Development and a Visiting Professor in Practice at the London School of Economics. Owen was a civil servant for a quarter of a century, working in Number 10, the Treasury and the Department for International Development. Owen hosts the Development Drums podcast, and is the author Running for Fitness, the book and website. Owen is on Twitter and