Lagarde and the IMF

Disappointing but unsurprising that Christine Lagarde has got the top job at the IMF. I don't say this because I thought she was a weak candidate or won't do a good job, By all accounts she is very capable. The sad thing is that even under these extraordinary circumstances, it is business as usual when it comes to running such a critical institution. If this was not the moment to make a break with the old arrangements, and to declare that these positions are no longer filled according to a system of entitlement, one wonders what it will take--especially when such outstanding alternative candidates (Augustin Carstens, Stan Fischer) were in the running.

Arvind Subramanian at the Peterson Institute sums the case up very well.

Mohamed El-Erian gives Lagarde some advice on what to do next. I will be interested to see how one of his suggestions, in particular, fares.

Ms Lagarde should reinforce her commitment to a meritocracy by eliminating other nationality-based appointments. She should start with the replacement for John Lipsky, the fund's first deputy managing director, an American who announced his intention to step down a few days before Mr Strauss-Kahn was arrested. This choice must not be another nationality-based directive - this time from the US.

I'm sure the US expects a quid pro quo for its support of Lagarde. But we'll see. I'd be delighted to be proved wrong.