How should the IMF’s Managing Director be Chosen?

Rodrigo de Rato – Managing Director of the IMF announced he would resign earlier this summer. How should his successor be chosen? By convention, merit, or a mix of both?

The established convention is that the Managing Director of the IMF is European, and the First Deputy Managing Director is American. (By comparison, the head of the World Bank is by convention an American citizen, while the Secretary General of the UN rotates amongst the UN’s political & geographic groupings). Soon after Rato’s announcement, French national Dominique Strauss-Kahn’s name was floated, and it seemed like a done deal….. until last week when Russia announced it intended to nominate the Czech economist (also a European candidate) Josef Tosovsky on the basis that he is better qualified.

The debate over the IMF’s nomination and appointment process is indicative of efforts to reform, democratize and ensure transparency in the workings of the major IOs. In an very important July decision,the IMF’s Executive Board indicated it was abandoning the traditional selection process, and going forward: (1) selections will be merit based and nominees must have certain professional qualifications (distinguished record in economic policymaking, capable of providing strategic vision, etc.) and (2) nominees may be nationals of any of the Fund’s members, rejecting the European convention. This followed a July 2007 report by the IMF’s Independent Evaluation Office assessing the strengths and weaknesses of the IMF’s nomination process, and canvassing the search practices of other international organizations and businesses, including CEOs.

Given the debacle surrounding Wolfowitz earlier this summer,, the IMF’s move may presage new thinking in other institutions as well. But the end results will only be differ if the Europeans and the Americans are willing to use their weighted votes differently after the nominations, and at the time of selection, as yesterday’s FT editorial vehemently suggests they do.

The deadline for nominations is August 31….