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What WOULD It Take for the US and Europe to Give Up Control of World Bank and IMF Leadership?

This is a joint post with David Roodman.

The Dominique Strauss-Kahn debacle has unexpectedly forced the first leadership turnover at a Bretton Woods institution since the global financial crisis—the first leadership transition in what we might call the G-20 world. The tacit deal that has long put an American atop the World Bank and a European in charge of the IMF, rooted in the geopolitics of the 1940s, looks more archaic than ever. That’s why this time around, the calls have grown even louder to make the leadership selection process of the World Bank and IMF open, transparent, and meritocratic. Owen Barder suggests on his widely read blog that transparency and merit are key to maintain the reputation and relevancy of these international institutions, and Nancy Birdsall agrees that the decision needs to be based on merit, not nationality. The Financial Times and others news media say that it is time for everyone to acknowledge that we are in the 21st century with several emerging powers that must have a larger role in the Bank, the Fund and other multilateral organizations. One of us (Vij) has made this argument too, constructing a model of global governance that factors in GDP and population as of 2011, not 1941.

A Quick Guide to the Upcoming Contest for the Next MD of the IMF

This is a joint post with Nicolas Véron that first appeared on the Peterson Institute's Real Time Economic Issues Watch.

This note provides a quick guide—in the form of a table—to the likely candidates to succeed Dominique Strauss-Kahn as next Managing Director (MD) of the IMF, assuming that he resigns shortly. It also highlights some key points that must guide the process of selecting the next MD.

Need for urgent action. The IMF is at a critical juncture with lots of problems to solve, not least in Europe. A leadership vacuum and uncertainty must be avoided, which requires urgent initiatives by the larger players—the United States, Europe, China, Brazil, India, South Africa and others.