IDEAS home Printed from https://ideas.repec.org/p/tsy/wpaper/wpaper_tsy_wp_2007_3.html
   My bibliography  Save this paper

Governance of the International Financial Institutions: The case for merit-based selection of agency heads

Author

Listed:
  • Michael Kooymans

    (Treasury, Government of Australia)

Abstract

The Managing Director of the International Monetary Fund and the President of the World Bank are appointed under a 60 year old unwritten convention that the Managing Director is nominated by the countries of Western Europe while the President is nominated by the United States. All ten Bank Presidents since 1946 have been US citizens and all nine IMF Managing Directors have been citizens of one of six Western European countries.This paper argues that these arrangements are anachronistic, are contrary to modern corporate governance best practice, are inconsistent with the multilateral character of the IMF and World Bank, and undermine their legitimacy and effectiveness. Removing nationality restrictions on candidates for senior leadership positions would be an important complement to other initiatives to modernise the governance arrangements, strategies and operations of the IMF and World Bank. In particular, it would be consistent with measures being taken to enhance the voice and participation of developing member countries, particularly emerging market economies whose voice has not kept pace with their growing economic weight. Australia has been a strong advocate for these governance reforms.The paper briefly examines the origins of the convention and the evolution of selection processes for the positions of Managing Director and President over recent years. It also identifies concerns expressed by many member countries about the processes. These concerns relate to transparency and consultation as well as the nationality restrictions inherent in the convention. Alternative selection models are also discussed to illustrate how the issue might be taken forward in a practical way.

Suggested Citation

  • Michael Kooymans, 2007. "Governance of the International Financial Institutions: The case for merit-based selection of agency heads," Treasury Working Papers 2007-03, The Treasury, Australian Government, revised May 2007.
  • Handle: RePEc:tsy:wpaper:wpaper_tsy_wp_2007_3
    as

    Download full text from publisher

    File URL: http://www.treasury.gov.au/~/media/Treasury/Publications%20and%20Media/Publications/2007/Working%20Paper%202007%2003/Downloads/PDF/Tsy_Working_Paper_2007-03.ashx
    File Function: First version, 2007
    Download Restriction: no

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Xenia Roduner, 2012. "Governance in International Financial Institutions: The Case of the IMF," Chapters,in: Research Handbook on International Financial Regulation, chapter 16 Edward Elgar Publishing.

    More about this item

    Keywords

    International Monetary Fund; World Bank; governance;

    JEL classification:

    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • F53 - International Economics - - International Relations, National Security, and International Political Economy - - - International Agreements and Observance; International Organizations
    • F59 - International Economics - - International Relations, National Security, and International Political Economy - - - Other

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:tsy:wpaper:wpaper_tsy_wp_2007_3. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (The Treasury (Commonwealth of Australia)). General contact details of provider: http://edirc.repec.org/data/trgovau.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.