When the Bretton Woods conference took place in 1944, a deal was done between the US and UK/France–the Allies. The World Bank President would be an American and the IMF Managing Director a European. Christine Lagarde is the 11th consecutive European in the job. It is time to break the European monopoly on the IMF. There is no shortage of talent as to who will succeed her in July 2016. This time, ample notice is required to prepare an open and transparent selection process.
The IMF needs a managing director with equal doses of technocratic and political skills. When Dominique Strauss-Kahn departed in May 2011 because of extra-curricular activities, a feeble attempt was made to open up the appointment to a global contest, but the outcome was a foregone conclusion. A Frenchwoman followed a Frenchman. A French politician with presidential ambitions (sadly thwarted) was followed by another French politician with similar ambitions (always denied, of course). For 38 of the 68 years in which the IMF has had a managing director, a French person has been at the helm.
IMF has just had its spring meeting in Washington. The world economy is in better shape than when Lagarde took over. Losing Strauss-Kahn was a shock. The IMF is now on a more even keel. Its analysis of the world’s experiments with austerity has been criticised, as has been its forecasting record. But that is not new. The IMF has often got its macroeconomics wrong. Normally, it used to get its economics wrong when the problem was with developing countries. Lately, as the UK example has shown, it cannot even get developed economies’ macro right. It was meant to be the guardian of exchange rate stability. But once the USA abandoned the Dollar Exchange Standard in 1971, it has become a forecasting body and not very a good one at that either. Yet it faces challenges, as does the global economy. The US Congress, in its usual erratic manner, is holding up long overdue reforms, including quota rebalancing agreed by the rest of the world. The refusal to vote on funds for reforms is entirely due to the quarrels between President Barack Obama and Congress. Any movement is unlikely before November’s mid-term elections.
The IMF affords a bully-pulpit to address the world’s economic problems. Lagarde is unlikely to give a stiff talking to which the US Congress may heed. She has