What’s the IMF got against older folks?

Formally speaking, the race to head the International Monetary Fund is a two-person contest between French finance minister Christine Lagarde and Mexican central bank chief Agustin Carstens. In reality, Lagarde appears to have sewn up all the support she needs. Barring a stunning political realignment or some new scandal, Lagarde will be the next managing director.

Her ascent has been made smoother by the IMF’s decision not to include a third candidate in the race: current governor of the Israeli Central Bank Stanley Fischer. A former deputy managing director of the Fund, Fischer has a sterling reputation and, on paper at least, would seem to be a formidable candidate (for a testimonial, see here). So why isn’t he still in the race? He’s too dang old. The IMF’s by-laws provide that no new managing director can be older than sixty-five. Here’s the relevant provision from the Fund’s by-laws:

(c) The salary of the Managing Director shall be determined by the Board of Governors and shall be included in his contract. The Fund shall also pay any reasonable expenses incurred by the Managing Director in the interest of the Fund (including travel and transportation expenses for himself, and expenses for his family, and his personal effects in moving once to the seat of the Fund during or immediately before his term of office and in moving once from the seat during or within a reasonable period after his term of office). The contract of the Managing Director shall be for a term of five years and may be renewed for the same term or for a shorter term at the discretion of the Executive Board, provided that no person shall be initially appointed to the post of Managing Director after he has reached his sixty-fifth birthday and that no Managing Director shall hold such post beyond his seventieth birthday.

This provision could have been waived, but there apparently wasn’t any support for doing so in this case. That almost certainly suggests a lack of support for Fischer’s candidacy rather than a conviction that those older than 65 cannot serve effectively. Fischer has joint American and Israeli citizenship.  It’s hard to imagine a combination of nationalities less likely to generate broad support on the Bank’s executive board. In fact, being seen as American all but excludes him since the U.S. holds the World Bank presidency and normally has a lock on the number 2 position in the Fund (the position Fischer used to hold).

But the incident begs the question of why the provision is even on the books. A World Bank spokesperson informs me that the Bank has no such provision for incoming presidents and points out that Jim Wolfensohn was 67 when he was appointed to his second stint as Bank president.  The United Nations Charter doesn’t provide an age requirement for secretaries-general. Boutros Boutros-Ghali was almost seventy when he was elected to the post (though, now that I think of it, he was fairly ornery throughout his term).

So is steering the Fund that much more taxing than running the Bank or the United Nations? I’d wager the UN Secretary-General generally travels more than the managing director and that the Bank president travels almost as much. Both probably jet off to more dangerous and difficult locales than the managing director (Greece doesn’t count as a hardship post–not yet anyway). And, come to think of it, isn’t upping the retirement age just the kind of thing the Fund wants countries grappling with huge pension programs and bloated deficits to do?

My guess is that the age provision will soon disappear from the by-laws.  An institution still reeling from accusations that it harbors a sexist working environment isn’t going to want to court charges that it’s ageist.