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Who should be the next IMF chief?

Even if the serious charges against IMF head Dominique Strauss-Kahn are proven false, the IMF will likely be in need of a new leader.

With DSK handcuffed in the back, who will take the IMF driver's seat?

According to unwritten agreement, the IMF has always been headed by a European, just as the president of the World Bank has always been American.

Some (mainly Europeans, funnily enough) argue that the IMF needs a European leader now more than ever, because the biggest issues the IMF currently faces are in the eurozone  rather than in the developing world. Possibilities named include French Finance Minister Christine Lagarde, Italian Central Bank head Mario Draghi.

Others, like Felix Salmon, argue it’s time for a change.  After all, when he was chosen in 2007  DSK himself said that his appointment would be the last time a European automatically got the nod.  “Voice and representation of most countries in a changing world have to be better taken into account by the board, but also by the staff,” he said, “as well as by management.”

Owen Barder calls for the selection to be open, transparent, and merit-based (in contrast to the back-room deals that usually cinch the nomination.) This would open the field to contenders like Turkish former UNDP head Kemal Dervis and South African politician Trevor Manuel.

Meanwhile, the Freakonomics blog attempts to rescue the reputation of economists the world over by reminding us that morality and occupational choice are not highly correlated.

Postscript from Bill 8:30am Tuesday: Did the IMF get it wrong in 2008? Disturbing story in NYT this morning about the previous DSK sex scandal of an affair with a subordinate:

The Board concluded that … Mr. Strauss-Kahn …had not abused his power.

In a letter to the board {at the time}, {the woman in the affair} disagreed, saying Mr. Strauss-Kahn had used his power as managing director to become intimate with her.

“I was damned if I did and damned if I didn’t,” she wrote in a letter to the investigators. In the letter, she went on to say that Mr. Strauss-Kahn was “a man with a problem that may make him ill-equipped to lead an institution where women work under his command.”

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10 Comments

  1. martin wrote:

    the next International Monetary Fund (IMF) chief should be anybody from “China, India or south east Asia”, not his predecessor Gordon Brown.

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    Posted May 17, 2011 at 4:10 am | Permalink
  2. Matt Morris wrote:

    Owen got it spot on in his post.

    Posted May 17, 2011 at 4:42 am | Permalink
  3. Grieve Chelwa wrote:

    “According to unwritten agreement, the IMF has always been headed by a European, just as the president of the World Bank has always been American.”

    Just a correction Laura, James Wolfensohn, the ninth president of the World Bank is Australian.

    Posted May 17, 2011 at 9:04 am | Permalink
  4. Greg wrote:

    From the list given here it should be Trevor Manuel. There are back door deals but having someone from the area of the world the Bank was originally supposed to help will, hopefully, focus on getting things done.

    Posted May 17, 2011 at 10:01 am | Permalink
  5. Bernard Lowther wrote:

    Jim Wolfensohn was born in Australia but he became a US citizen a long time ago — some say, precisely to make himself eligible for WB Presidency.

    Posted May 17, 2011 at 10:29 am | Permalink
  6. Chike wrote:

    Where I come from the IMF is utterly reviled. These events merely reinforce that feeling.

    Pundits have made much of the fact that the man who led the institution famous for insisting on austerity measures was accused of committing a crime in a $3,000 a night hotel.

    Coming back to the question posed by the post, the larger issue is that the IMF and the World Bank as presently constituted are more suited for the World of 1945 than for today’s World. I believe these institutions are on the path to irrelevance irrespective of who heads them.

    Posted May 17, 2011 at 5:30 pm | Permalink
  7. Cornelius Christian wrote:

    Here’s an idea: instead of appointing a new leader, just get rid of the IMF entirely!

    Posted May 17, 2011 at 5:42 pm | Permalink
  8. Marje wrote:

    Why not to nominate a new eurozone member: Estonia, for xample, who’s record in keeping the budget balanced has been remarkable.
    http://en.wikipedia.org/wiki/Siim_Kallas, for example.

    Posted May 17, 2011 at 7:49 pm | Permalink
  9. Antown wrote:

    I believe that all these criminal cases based on sexual attraction may affect only European power. This infighting, intrigue, this all instruementy European politicians. Which resulted in the European economy to collapse. The European Union can not long survive due to the European mentality. EU remind me of a group of women who meet demogogiyu.

    Posted May 19, 2011 at 11:37 am | Permalink
  10. Victor wrote:

    European mind has not changed since hitler. Essentially they are pursuing his agenda in a subtle and soft manner. European economies are not worth the salt except that they are always given soft loans by there cronies like IMF and World Bank. Its time to trash this euro centric and hegemonistic attitude. Let all others leave this damn IMF and float another body.

    Posted May 20, 2011 at 3:27 pm | Permalink

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