Christine Lagarde, managing director of the International Monetary Fund and a former French finance minister, faces trial for accusations of negligence. But that has not undermined her recent declaration of her candidacy for a second term, which representatives of some of the IMF’s major member countries swiftly endorsed.
The importance of the IMF’s top echelon, however, is often overstated. Supporters and critics of the IMF alike tend to associate a change in leadership with the prospect of organizational transformation. The last chief, of course, was Dominique Strauss-Kahn, who departed the role amid some controversy. As his departure showed, removing a ship’s captain will not cause it to suddenly sink.
The IMF employs more than 2,500 well-educated and highly paid professional economists. As research shows, these members of staff, who populate the ship’s engine room, tend to exercise more influence over policy decisions than either management or the executive board, where directors representing member countries have the final say. Still, we have an almost innate tendency to believe that “great women” or “great men” make history.
Who heads the IMF may matter a great deal for those working for the organization, but public discussion of what the organization does is not aided by obsession with the career trajectory of its top manager. For instance, here are two much-discussed substantive problems that are anything but new: governance weaknesses and policy failures.
A European Ship in International Waters
When it comes to governance, everybody knows instinctively that artificially limiting the pool of candidates by the provenance of their passports is absurd. The head of the IMF has by virtue of an unwritten rule always been a European (five of eleven have been French); the World Bank, meanwhile, has always been led by an American. Therefore, policy elites from the affluent minority of countries control two institutional pillars of the global economic governance system.
