The search for the next IMF chief is on

With the sexual assault allegations put against former IMF head Dominique Strauss-Kahn the time has come to find another leader for the international bank. Again, the push is on from developing countries to have the new IMF chief be from somewhere other than Europe. However the US and the EU; who have all of the voting power on selecting the new head, are still unlikely to look for candidates elsewhere.

From the Guardian, writer Jayati Ghosh looks into the selection process and why Europe is using some faulty logic for keeping the appointment within their borders.

European governments have quickly rallied around the candidacy of Christine Lagarde, finance minister of France, for the top job at the IMF. For obvious reasons, this is not popular in the capital cities of major developing countries playing a more important role on the world stage.

For more than 60 years now convention, rather than any written rules, has dictated that the appointment of heads of the Bretton Woods institutions has been controlled by the traditional global powers. The US has provided the chief of the World Bank and Europe has provided the head of the IMF. These "conventions" emerged and were entrenched during a period when these two broad groupings controlled the global economy, and polity.

That is much less clear today. The medium-term future of the world economy is unlikely to be scripted only by these two players. Before the emergency exit of Dominique Strauss-Kahn had rendered the choice of the next head of the IMF an urgent matter, it was common to hear voices from developed countries suggesting that the next person to be in charge could and should be someone from the developing world. There is certainly no shortage of suitable candidates with sufficient international experience and knowledge of the workings of international finance.

In this context, the speed and strength of insistence with which European countries are pushing for a particular European candidate is notable. Even the support of the UK prime minister, David Cameron, for Lagarde cannot simply be ascribed to his dislike of Gordon Brown. The reason is not just because of European governments' perceived desire to retain some semblance of control over global institutions. It is also because the major immediate work of the IMF is to do with Europe: several European countries are involved in economic rescue packages worked out with the European Union, the European Central Bank, and the IMF – and others are likely to be waiting in the queue.

The argument being made is that since European countries are likely to be involved in bailout packages in the immediate future, it is especially important to have a European to head the Fund. Yet this was precisely the argument used – by Europeans – against having a person from the developing world to lead the institution: that debtor countries could not and should not provide the leadership because of possible conflicts of interest! Once European debtor countries are involved, apparently the inverse logic holds.