Friday 20 Jul 2018 | 02:56 | SYDNEY
Friday 20 Jul 2018 | 02:56 | SYDNEY

IMF maintains tradition of failure

By

Stephen Grenville

22 July 2011 09:29

By vigorously-defended tradition, the Europeans get the top slot at the International Monetary Fund and the US gets the second slot – First Deputy Managing Director.

The change-of-guard is now complete. Former French Finance Minister Lagarde, newly-appointed to the Managing Director position, has now proposed David Lipton as her deputy. She describes his qualification as having 'a proven track record in economic crisis management'.

It is a currently-fashionable idea that failure is a necessary prelude to success, and David Lipton certainly fits the first leg of this model. He was the US enforcer in the IMF's negotiations with Korea in 1997, and insisted on the flawed IMF strategy in Indonesia during the Asian Crisis.

Of course, Lipton is in good company in Washington at present. He, Larry Summers (until recently head of President Obama's National Economic Council) and Tim Geithner (now US Treasury Secretary) might usefully swap stories on what they have learned from their mistakes in 1997-8.

Photo by Flickr user Growl Roar.