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Miles Kahler's Research Cited in Foreign Policy

Why Is the IMF Chief Always European?

05/18/2011
Joshua E. Keating, Foreign Policy

WithInternational Monetary Fund (IMF) Managing Director Dominique Strauss-Kahn cooling his heels in Rikers Island after an arrest on sexual assault charges and a growing chorus of international voices -- including U.S. Treasury Secretary Timothy Geithner -- calling for him to resign, speculation is rampant as to who will be his replacement. Officials from Brazil and South Africa are calling for the next managing director to be from a developing country, but European governments counter that, in accordance with tradition, the next director should be European. (French Finance Minister Christine Lagarde has been floated as one possible candidate.) But when was it agreed that the IMF should always be run by a European?

It never really was. The policy is a long-standing "gentlemen's agreement" under which the IMF managing director is a European and the World Bank president is an American. There's no mention of the director's nationality in the IMF's Articles of Agreement, which state only that the director is appointed by the organization's executive board. The voting rules are set up so that countries with the highest "quotas" -- a measure of the size of their economy and economic viability -- are given preference for membership. In practice, for most of the IMF's history, this has meant that the United States and Western Europe have dominated the board.

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Miles Kahler is Rohr Professor of Pacific International Relations at IR/PS and Distinguished Professor of Political Science at UC San Diego. His principal areas of research are international relations and international political economy, particularly international institutions and global governance, Asian regional institutions, the evolution of the nation-state, and the political economy of international finance.