Reform and Renewal at the IMF
CAMBRIDGE – Every time the International Monetary Fund awaits a new managing director, critics complain that it is past time for the appointee to come from an emerging-market country. But whining won’t change the unjust 60-year-old tradition by which a European heads the IMF and an American leads the World Bank. Only if emerging-market countries unite behind a single candidate will they have a shot at securing the post.
Unfortunately, that is unlikely this time around, too, so the job will probably go to a European yet again. After all, the oft-repeated principle that the IMF’s managing director should be chosen on the basis of merit rather than nationality need not mean a departure from past practice. French Finance Minister Christine Lagarde (Europe’s choice) is impressive and capable.
But the proposition that the ongoing sovereign-debt crisis on Europe’s periphery is a reason to appoint a European is wrong. (Lagarde herself seems to acknowledge this.)