Who Should Lead the IMF?


The next head of the IMF is expected to be Christine Lagarde. Europe's leaders are converging on this appointment and if the US goes along the deal will be as good as done. Lagarde is a reasonably well-qualified candidate but this choice, guided by the desire to perpetuate the arrangement under which a European heads the Fund and an American the World Bank, is a mistake.

Moises Naim powerfully makes the case against an outrageous dispensation. He detects the stench of colonialism and I agree.

Even the leaders of the Group of 20, the assembly of nations that accounts for more than 80 percent of the world's economy and two-thirds of its population, recognize that leadership selection at these institutions must change. When they met in early 2009 in London on the heels of the financial crisis, the G-20 leaders asserted that "the heads and senior leadership of the international financial institutions should be appointed through an open, transparent and merit-based selection process."

That this is not already the standard is outrageous. No more outrageous, of course, than how European countries are offering countless excuses for why Strauss-Kahn's replacement must carry a European passport.

Martin Wolf comes down on the same side as Moises, though he argues that the Europeans' case is not without merit.

The eurozone is a very special (and, in my view, quite dangerous) construction. When the IMF lends to Greece, Ireland or Portugal, it is directly affecting the monetary and financial stability of all other members of the eurozone. It is almost as if it were rescuing, say, California from a looming default. It is, I think, understandable that leaders of powerful countries, such as Germany or France, want to feel complete trust in the management of an institution that is performing such a vital function for themselves. Indeed, it was for this reason that I initially thought the IMF should not have been involved inside the eurozone at all: it would ultimately subvert the IMF's own independence.

While I find this European argument has some force, it does not have enough force...

I disagree. This argument has no force.

What does it mean for Europe's leaders to have "complete trust" in the management of the Fund? If it means that with their own choice in command they expect to exert greater influence over the Fund than a non-European would allow, that would be a good reason to appoint a non-European--somebody who is independent, and will run the IMF with no thought of building capital for a possible future career in European politics. If it merely means trust in the new leader's competence, why should being European confer any advantage? I fail to see the logic. Martin weighs the trust argument against the independence argument, and on balance finds the case for a European successor to DSK, as he puts it, less than overwhelming. But the trust argument is specious and the independence argument is strong. The case for selection on merit--with a presumption against another European, to underline the change of regime--really is overwhelming.

This is not a close call.

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Clive Crook is a senior editor of The Atlantic and a columnist for Bloomberg View. He was the Washington columnist for the Financial Times, and before that worked at The Economist for more than 20 years, including 11 years as deputy editor. Crook writes about the intersection of politics and economics. More

Crook writes about the intersection of politics and economics.

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