Experience and qualifications matter, though of course they aren’t the only factor in success. But understanding the issues could be argued to be even more important at the IMF, which deals with complex topics in macroeconomic management, than at other international institutions.
Christine Lagarde, despite her tenure as French finance minister, came in with limited understanding of macroeconomics from her experience in the legal world. Her departure presents the world an opportunity to look at candidates for the IMF top job based on their merits. So which of the candidates being mentioned in the media have the most relevant experience and qualifications?
The following table summarises experience and qualifications of six frequently mentioned candidates along six criteria.
Partial points are awarded to Ms. Georgieva on experience in low- and middle-income countries because while she worked on these types of countries at the World Bank, her only period working in a low- or middle-income country was as an academic in Bulgaria. Mr. Rajan also gets partial points for management within an intergovernmental setting, as he was Chief Economist at the IMF, which while intergovernmental in nature, his department was supposed to be insulated from intergovernmental negotiations.
There’s nothing too exciting stored on that paragon of knowledge and wisdom, Wikipedia. Lets see: He’s has been the chairman of the National Bank of Kazakhstan since January 2009. He started his career at umm – the National Bank – in between he spent time with Deutsche Bank and the National Commission on Securities. Oh, don’t forget his political experience as Deputy Prime Minister of Kazakhstan in 2004.
imfboss has invited candidate assessments from civil society voices in the home countries of the candidates to head the IMF. Throughout the process we will be posting these here for your benefit. The below was first published in the Guardian.
In France, Dominique Strauss-Kahn epitomised to the point of self-parody the “gauche caviar” (champagne socialism): the Marrakech riad, the libertine lifestyle and a very, very wealthy wife. If Christine Lagarde succeeds him as director of the International Monetary Fund (IMF), there will no doubt be a radical change of style within the institution. To start with, the media will no longer have to cover extra-marital affairs with subordinates or worse. Strauss-Kahn’s flamboyant leadership will be replaced with a more down-to-earth one.
Lagarde has the discreet charm of the French bourgeoisie. Her uptight and sometimes demure manners will offer a stark contrast with Strauss-Kahn’s bling and brash personality. The French finance minister should be a great hit in Washington: she speaks an American-accented English, studied in the US and worked as congressional assistant. The financial media have adored her for a while: in 2009, the Financial Times ranked her the best finance minister of the eurozone, and Forbes magazine named her the 17th most powerful woman in the world. But if her record as finance minister is anything to go by, she should definitely not be given the job.
Peer Steinbrück was minister of finance under Chancellor Angela Merkel from 2005 until 2009 in the coalition of the Christian Democratic Party and the Social Democratic Party (SPD). He has studied economics and sociology and made a typical party career in the SPD working as an assistant of several social democratic ministers, for instance in the ministries for construction, for environment and for technology. In 2005 he was running as candidate for the presidency in the federal state of North-Rhine Westphalia, which by population is the biggest state in the German federation. But he was beaten with the worst result for his party since the end of the war.
Steinbrück belongs to the right wing of the SPD and represents a kind of “New Labour” policies. In the first years as finance minister he strongly supported further deregulation and liberalization of financial markets with the argument, that German competitiveness on global financial markets would have to be strengthened. However, before the Heiligendamm G8, he tried to advocate more transparency for hedge funds, but did not succeed and gave up, accepting the arguments of the UK and the US.
Axel Weber was head of the German Central Bank, the Bundesbank, from 2004 until April 2011. He had been appointed by the Schröder government, which consisted at that time of the Social-Democratic Party and the Green Party. Before his assignment he was part of the so called “Five wise men” an influential advisory board of five German top economic institutes to the federal government.
Weber, a university professor of economics, represents the hard core monetarist school and the tradition of the Bundesbank from the times of the Deutschmark. This paradigm of the Bundesbank has been imposed to the euro-zone and the anchored in the statutes of the European Central Bank (ECB).
It was therefore no surprise, that Weber did not understand the system in which he was playing quite an important role. When the first German bank, the IKB, was collapsing in August 2007 as a result of the rising tide of the US-subprime crisis, he declared that “the exposure of German Banks in the American real estate market is limited. It is concentrated on investments with a high rating. Any comparison, made by some media reports, between the present economic situation and the banking crisis of 1931 are completely erroneous.”