Alberto Alesina and Francesco Giavazzi write that the current search for a new IMF chief reflects the undue weight given to Europe in international affairs.
The whole world has turned upside down, and yet France and Britain, for example, retain permanent seats on the UN Security Council. This made sense in 1945; it does not today. Why France and Britain and not Germany or Japan, two much larger economies? Or India and Brazil, two huge countries?
Does it really make sense that two European Union (EU) member countries hold veto power on the Security Council while the Third World (outside of China) is completely unrepresented? The EU does not have a common foreign policy and it will not have one in the foreseeable future, but this is no reason to continue to provide a preference to France and Britain.
Europe’s over-representation extends beyond the Security Council. While a European foreign policy does not exist, Europe has some sort of common economic policy: 12 of the 15 current members have adopted the euro as their currency and share a central bank. Nevertheless Germany, France, Italy and Britain hold four of the seven seats at G7 meetings.[The Straits Times/Project Syndicate]
The authors have made a very important point. If the the constituents of the EU are coming into an ‘ever closer union’ it is only appropriate for the EU to retain only one vote in the United Nations Security Council.
The ‘tradition’ of selecting a European to head the IMF – which dishes out advice to developing nations, as indeed an American to head the World Bank has to be consigned to the dustbin of the 20th century. It makes very good sense to get someone who has experienced the realities of calling in the IMF and survived to head the organisation. India’s Manmohan Singh may be a good choice, but he seems to have disowned his successes since.
This is not to say another entitlement regime be created – this time with a tradition of a third world IMF survivor as the head. Just that the net be cast wide enough to catch the best candidate for the job.