The Multilateralist

A new era at the IMF

The topic de jour inside the IMF is whether managing director Dominique Strauss-Kahn will jump into the French presidential race. He leads national polls by a significant margin, although it’s not at all certain that his Socialist party would nominate him. If he does leave, however, the managing director slot would open at a very ...

The topic de jour inside the IMF is whether managing director Dominique Strauss-Kahn will jump into the French presidential race. He leads national polls by a significant margin, although it’s not at all certain that his Socialist party would nominate him.

If he does leave, however, the managing director slot would open at a very interesting moment in the IMF’s history. As has been discussed here and here, the IMF is in the midst of the most significant governance reform in many years, with Europe under pressure to relinquish some of its seats on the Fund’s executive board. Europe’s traditional prerogative to name the managing director could easily come under fire as well.

Brazil and South Africa would be natural countries to offer up managing director candidates, and some folks privy to chatter at the Fund point to former South African finance minister Trevor Manuel as a potential consensus candidate.  But whether the major developing economies can come together on a candidate is quite uncertain. As the debate on UN Security Council reform shows, the most significant obstacle to institutional reform is often the disunity of the aspirants to leadership.

If the Fund (and, at some point, perhaps the World Bank) do get developing world leadership, one potential consequence could be a significant diminution in the influence of major Western non-governmental organizations. As the Eskom power-plant project revealed, there is a major difference in emphasis between Western activists and developing country governments on how to weigh economic development and environmental protection.

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