Horst Kohler's resignation as Managing Director of the International Monetary Fund offers a unique opportunity to reform the embattled international financial institution.
What the IMF needs, as a first step towards comprehensive reform, is a new leader with solid technical training, a broad vision, and first hand experience in dealing with the macroeconomic risks faced by emerging and transition economies. Mr. Kohler lacked all of these characteristics. A gray bureaucrat and a mediocre economist, he was not even Germany's first choice for the post.
Unfortunately, instead of getting the best man or woman for the job, politics as usual is likely to prevail. The Managing Director position is expected to go to a European. Until a few days ago Mr. Rodrigo Rato, Spain's Finance Minister, appeared to be the front-runner. However, now that his Popular Party has been defeated in the Spanish general elections, it is unlikely that he will be Europe's candidate for the IMF post.
Yet the fact that Rato was seriously considered shows how wrecked the process is. Mr. Rato is an able politician and under his stewardship Spain's finances have done well. However, it would be a stretch to argue that he is the best candidate for the IMF position.