T he European Union is asserting its exorbitant privilege of appointing the managing director of the International Monet­ary Fund, even as the Americans just exerted theirs of appointing the president of the World Bank. Both pay lip-service to transparency and good governance, but it is hard to see how these archaic traditions serve the goals of the international financial system. Indeed, the figleaf justification of having a managing director who enjoys strong ties to the administration in an import­ant capital is being blown away as the French administration attempts to send an unwanted political opponent to lead the IMF in Washington.

This comes as the IMF faces a bloody battle to reform country quotas (which determine voting power) to make them more representative of economic power. In all likelihood, quota reform will produce a mouse by the time of the Fund-Bank annual meetings, increasing the quota of emerging markets by just enough to be mathematically noticeable but not enough to make any real difference. At that same meeting, the appointment of the new managing director, the elephant in the room, may go unchallenged if the Europeans get the US to go along. So much for the greater legitimacy of international financial institutions!