The Crazy Hunt for a New IMF Head

The most frustrating thing about the ongoing controversy over who will be the new head of the International Monetary Fund is just how substanceless the controversy has been. (For more on the succession flap, see Slate’s “International Papers.”) Although the IMF’s internal struggle to find a successor to departed head Michel Camdessus has been public enough to end up on the front page of the New York Times, all the publicity has shed no light on how the IMF might be rethinking its role in the global economy. Instead, all the hullabaloo has taken place within a previously defined and seemingly unquestioned framework in which the only questions that count are where are the candidates from and whether they have that elusive thing called “stature.”

To recap briefly, the IMF’s 24-member board met today and took a straw poll to measure support for the three current candidates for managing director: Germany’s Caio Koch-Weser, the United States’ Stanley Fischer (who’s currently the IMF’s interim chief), and Japan’s Eisuke Sakakibara. More than a third of the board members abstained, and the IMF said “consultations” would continue. The fundamental problem is that the current European candidate is not, by anyone’s standards, well suited to the job, but the job has to go to a European. After weeks of soft-pedaling the first fact, the United States finally came out this week and said it could not support Koch-Weser. But President Clinton also said that he could not support Fischer (who is as well-qualified as anyone for the post), because the IMF chief has to be European.

This is fascinating when you think about all the rhetorical sidesteps American politicians have to go through when they talk about affirmative action in this country. It’s next to impossible to imagine Clinton saying that he was nominating a Cabinet-level official because he was white or Asian, but it’s apparently no problem at all for him to say that he won’t support Stanley Fischer because he’s American. In a way, it’s refreshing to see everyone involved toss the “best man for the job” rhetoric out the window. But it’s also dismaying. (I’m assuming that something can be refreshing and dismaying at once. If not, perhaps “intriguing” and “disheartening.”)

What’s dismaying about it is that no one has made a convincing case for why Europe should have a stranglehold on the IMF job or why continental differences are ideologically meaningful rather than just a spoils system. (The United States traditionally gets the World Bank, Europe the IMF.) It’s probably true that the European and U.S. versions of capitalism are, in important respects, different, and talking about the virtues and vices of those approaches is a worthwhile project. It’s not as clear, though, that the profound differences of opinion that exist over the proper role of the IMF break down neatly along national or continental lines. And surely it’s those differences that should be at the center of any decision to name a new head.

Should the IMF continue playing the role of global firefighter, stepping in to bail out countries in trouble? Is its traditional recipe of fiscal austerity and high interest rates the right approach, or does that one-size-fits-all approach sometimes do more harm than good? What’s the proper attitude for the IMF to take toward large lenders when their loans are imperiled by fiscal crises? These are all essential questions in a global economy where capital can move more quickly than ever. But with only a couple of exceptions, there’s been no discussion of these issues during this whole public debate.

As it happens, I think Fischer has some good answers to those questions, and the fact that he was nominated by a group of African countries–over, apparently, the opposition of the United States–and has the support of much of the developing world is also important, since the IMF has traditionally been seen as purely an instrument of the developed countries. But if the Europeans think his answers are wrong, then they should wholeheartedly support a candidate who offers different ones. But let’s hear a better reason than: “He was born in Baden-Baden.”