Dominique Strauss-Kahn has been accused of a horrible crime. Like everyone else he is entitled to the presumption of innocence until proven guilty.
We may, however, soon find ourselves looking for a new Managing Director of the IMF, either because DSK is involved in a legal case or because he has declared himself a candidate to be President of the French Republic.
The speculation has already begun (see Alan Beattie in the Financial Times) withChristine Lagarde being touted in some quarters as a likely successor.
Under an unwritten agreement, the IMF’s managing director has always been European and the president of the World Bank has always been from the United States. (Jim Wolfensohn had to take out American citizenship to get himself nominated.)
This seems a good time to recall the Leaders’ Statement at the G-20 summit in London on 2 April 2009:
we agree that the heads and senior leadership of the international financial institutions should be appointed through an open, transparent, and merit-based selection process;
This is important for four reasons. First, we want good people in these jobs. This is more likely if we thrown the field open to good people like Kemal Dervis and Trevor Manuel as well as Americans and Europeans, and make a choice based on merit not nationality. Second, people in these roles should owe their allegiance to the institution not to their own government. Third, it is important for the legitimacy and effectiveness of these institutions that they do not appear to the rest of the world be the fiefdoms of rich and powerful nations, to be used as sinecures for supernumerary or inconveniently-placed politicians. Fourth, it brings the G-8 and G-20 into disrepute to say these things in communiques if we have no intention of implementing them.
The traditional next step is for the Europeans to do a deal behind closed doors, get American agreement, and then to accompany the announcement of a fait accompli with a lot of public hand-wringing about how the process will be better next time.
The Europeans want a fair and open process for the appointment of the next President of the World Bank rather than having to accept another imposition from the Americans. The only way to achieve that is to relinquish our hold on top job at the IMF. It looks as if we may shortly have the opportunity to do it.
This post originally appeared on Owen Abroad