What's Wrong With the IMF and How to Fix It by Bessma Momani Mark R. Hibben & Mark R. Hibben

Author:Bessma Momani,Mark R. Hibben & Mark R. Hibben
Language: eng
Format: epub
ISBN: 9781509509706
Publisher: John Wiley & Sons, Inc.
Published: 2017-12-11T00:00:00+00:00

The MD

One of the most visible ways to enhance the Fund’s legitimacy would be to modernize its procedures of selecting the MD. Since the creation of the IMF, European members have nominated the head of the Fund, while the US nominates the president of the World Bank. This process has remained unchanged, even as other international institutions have developed more transparent, merit-based, and inclusive mechanisms for selecting their heads. Fund reformers call for the selection of candidates on the basis of merit through elections and without citizenship restrictions (Ostry and Zettelmeyer 2005: 17). Even Michel Camdessus has argued for opening the leadership selection process, which would enhance organizational and external legitimacy (2005: 11).

Some, however, caution against reforming the selection of the IMF’s MD, arguing that it could lead to deadlock, as is the case in selecting the head of the World Trade Organization. Instead, Kahler (2001: 92–8) recommends “a process of restrained competition”: first, minimum qualifications are agreed upon; second, search committees establish a qualified longlist of candidates; and third, national governments narrow down the longlist to a veto-proof nomination shortlist. To initiate this change, Kahler suggests that members who want to change the status quo “withhold their support” for a candidate selected by the Europeans and the Americans in the next search for an MD, unless the process of competition and meritocracy is employed (2006: 265).

The election of the MD in the past few years has been far more competitive than in previous decades. However, it remains an opaque process that continues to privilege the appointment of a European to the post. Christine Lagarde’s appointment as MD was in theory a merit-based process that saw her secure the support of many countries, particularly China. However, the fact that a European continues to occupy the position of MD (and an American occupies the World Bank presidency) undermines the idea that the selection process is depoliticized. Moreover, some have called for the opening of deputy MD appointments, which have thus far been “reserved” for select countries (Kruger, Lavinge, and McKay 2016). A competitive and transparent process for both the MD and deputy MD positions would help usher in good governance to the IMF.

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