[God, I hope not! The thought I might, however inadvertently, be cruel to an economist haunts my every moment at the keyboard. And I must admit I am unfair about economists’ comic potential. For a truly rollicking chucklefest, I know I can always turn to the works of Paul Krugman. His NY Times column today appears below.]
D.O.A. at the I.M.F.
By Paul Krugman
Nothing in the bylaws of the International Monetary Fund says that its managing director has to be European. Still, there is a long tradition to that effect -- part of a gentlemen's agreement that gives the considerably less critical directorship of the World Bank to an American.
But on Monday, when European Union finance ministers formally endorsed Caio Koch-Weser -- a Brazilian-born German official who has spent most of his career at the World Bank -- the United States promptly and bluntly rejected that choice.
To appreciate why the Americans decided to be so ugly, you need to understand that the head of the I.M.F. is one of the most crucial economic officials in the world, right up there with the chairman of the Federal Reserve and the U.S. Treasury Secretary. The managing director not only needs to be smart and experienced; he also needs to be diplomatically forceful. It's not a job for an ordinary bureaucrat.
Unfortunately, people who should know regard Mr. Koch-Weser as, well, an ordinary bureaucrat. He is, by all accounts, intelligent and likable. But he has spent his career at the wrong kind of institution; the World Bank is not a place to get experience in financial firefighting. More important, insiders I spoke to described Mr. Koch-Weser as someone who got along by going along -- someone who never expressed strong ideas of his own, who always seemed to say what he thought his superiors wanted to hear. That's not exactly the kind of man you want in the hot seat when the next global crisis breaks out.
So why did the Europeans select such a weak candidate? That's where the story gets awfully funny -- that is, it's funny, but it's also awful.
The problem begins with the French. France has long been an ardent advocate of the idea of Europe -- a Europe led by Frenchmen. And Paris has been ruthless in its determination to put its nationals in charge of everything from the I.M.F. to the European Central Bank.
At some point, however, Europe's largest nation was going to demand its turn. Given that a Frenchman has headed the I.M.F. for the last 22 years (and for 32 of the last 37 years!), the Germans figured that it was about time they got a chance. The trouble was that they didn't have any qualified candidates.
No, they aren't a nation of dummkopfs; it's a question of background. Germany does not have an elite civil service like the French or the British; nor does it have the kind of cross-pollination among business, academia and government that produces a Robert Rubin or Larry Summers. Nobody I talked to could come up with any German candidate he regarded as suitable for the job. Mr. Koch-Weser was the best Germany could find -- and he wasn't good enough.
Even the British and the French made their disappointment clear, withholding their endorsement for three months after the German government began pushing Mr. Koch-Weser. What finally concentrated their minds was the horrifying prospect that the job might actually go to the right person.
Last week a coalition of developing countries forced the issue by formally nominating Stanley Fischer, the I.M.F.'s first deputy managing director. Mr. Fischer (a former teacher and colleague of mine) has every conceivable qualification but one. An eminent economist, he is also an experienced policy maker -- he was the point man in the Asian crisis -- who has been noteworthy for his tact, discretion and ability to stay cool under fire. Even those who have criticized some of the I.M.F.'s decisions regard him as perfect for the job. But though born in what is now Zambia, Mr. Fischer is a naturalized U.S. citizen.
That apparently does not bother the African, Latin American and Middle Eastern (!) nations that have championed his candidacy. But the Europeans want a European, though most of them don't really want Mr. Koch-Weser. (Everyone suspects that Britain and maybe even France were willing to give lip service to an unsatisfactory candidate only because they counted on the Clinton administration, which is having trouble defending the I.M.F. against a hostile Congress in any case, to veto him.)
Now the truth is that there are plenty of qualified Europeans; there are citizens of Britain, Italy, Sweden, Poland who could do the job. Still, one wonders: Is it too late for Mr. Fischer to acquire a German passport?
[end]
Carl
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