How To Choose the IMF's Next Leader

It's time to abandon the corrupt practices and secretive agreements that have steered the organization so wrong.

By Joseph E. Stiglitz
Posted Friday, June 3, 2011, at 11:14 AM ET

Sooner than expected, the International Monetary Fund will have a new managing director. For more than a decade, I have criticized the fund's governance, symbolized by the way its leader is chosen. By gentlemen's agreement among the majority shareholders—the G-8—the managing director is to be a European, with Americans in the No. 2 post and at the head of the World Bank.

The Europeans typically picked their nominee behind the scenes, as did the Americans, after only cursory consultation with developing countries. The outcome, however, was often not good for the IMF, the World Bank, or the world.