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Five Questions for Candidates to Head the IMF
June 1, 2011
To CGD’s “Choosing the Next Managing Director of the IMF” online survey, I would like to add a list of five key questions which would be a litmus test for my vote (if I had a chance to vote):
1. Should the IMF be turned into a true lender of last resort? If yes, how can that be accomplished? If no, why not?
2. Should Central Banks care about unemployment as much as they care about inflation? If yes, why? If no, why not?
3. Do you think capital controls should be allowed/encouraged? If yes, which kind and under what circumstances? If not, why not?
4. Do you think fiscal austerity programs should be designed in such a way as to protect the poorest and most vulnerable? If yes, how would you go about ensuring this? If no, why not?
5. Advanced countries make available information on tax returns so that researchers and the public can assess how progressive and fair their tax system is. Developing countries do not make this information available; the Mexican government, for example, explicitly refuses to provide it when asked (I have copies of emails and have spoken directly to the tax authorities in the Ministry of Finance). Should developing countries be required to make such information publicly available as, for example, part of the article IV consultations, or other mechanisms? If yes, how could this requirement be enforced? If no, why not?
My vote would go to the candidate who answers “yes” to all five questions and articulates her/his answers well. Some may wonder why I included number 5. A while ago (in a private conversation) a high-ranking IMF official said that the information from tax returns should not be made public because it could alienate the wealthy and trigger unwelcome responses. If the watchdog for the global financial systems is worried about protecting the wealthy, how can it be trusted?
Finally, I think that it is not enough to ask whether a candidate has “Experience managing economic and financial crises” (one of the criteria listed by CGD). The question is whether the candidate was successful at managing economic and financial crises. Success should be defined using five criteria: 1. Ability to recognize the possibility of a crisis in the making; 2. Ability to think through and prepare for worst case scenarios; 3. Ability to galvanize support for unpopular measures; 4. Ability to garner adequate support from external sources; and, 5. Ability to avoid excessive adjustment and protect the poor and vulnerable from the brunt of austerity measures. If you ask who has really been successful in managing crises using these criteria, some of the leading candidates would likely be no more.
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3 Responses to “Five Questions for Candidates to Head the IMF”
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June 9th, 2011 at 10:49 am
I think Nora Lustig’s questions for the Managing Director of the IMF candidates are excellent!
June 13th, 2011 at 9:56 am
I would love to add one question to the IMF candidates: assume the world adopts a single world currency, what kind of IMF would you visualize?
June 19th, 2011 at 10:54 am
Nora, you ask all the right questions. I agree entirely these are the requirements for a more positive IMF role, closer to Keynes’s vision of the IMF. Given the lineup of candidates for the job, it’s too bad the major powers have backed away from our contemprary “Keynesian moment”
To Daniel’s suggestion, perhaps the question should be, what reserve currency that was not a national currency? We have a blueprint for that – it was Keynes’ vision. He lost the debate to the U.S. (Harry Dexter White).