IFI governance

Background

What is the ‘gentleman’s agreement’?

23 July 2019 | FAQ

The so-called gentleman’s agreement is yet another pillar of an undemocratic governance system. Leadership selection at the World Bank and IMF is subject to a historic ‘gentleman’s agreement’, which has ensured that the IMF managing director has always been European and the World Bank president is a US national. This agreement dates back to the creation of the institutions, when membership was limited to 45 states and when European powers still retained large colonies. Once the US nominates a candidate for Bank president, Europe uses its large voting rights on the Board to ensure the US candidate is picked in exchange for the US in turn supporting a European nominee for IMF managing director. In return, Europeans select their preferred candidate – the majority of whom have been French nationals – and await the seal of approval from the US (see Update 76).

The appointment of David Malpass, the US-nominated candidate, in April 2019 to the position of World Bank president demonstrated that the ‘gentleman’s agreement’ is alive and well (see Observer Spring 2019). Despite over 150 civil society organisations and individuals calling on the Board to live up to its commitment to an open, transparent and merit-based process – which was echoed by the demands by the Bank’s own staff association – Malpass was appointed president. The only other candidate put forward was Ziad Hayek, who was nominated by the Lebanese Government, but who subsequently withdrew, citing that this was due to pressure from “other governments”.

Civil society organisations throughout the world have long-since pointed out that the Fund and Bank continue to undermine their legitimacy by adhering to the gentleman’s agreement (see Observer Spring 2019). To replace this archaic and patently illegitimate process, they have demanded the introduction of an open, democratic, merit-based, transparent process for selecting the heads of both institutions. Importantly, this process, they say, should involve meaningful participation from low-and middle-income member states and allow any state, regardless of nationality, to put forward candidates on an equal footing.

For example, a 2011 civil society letter to the IMF called for the following:

  1. The candidate must gain the open support from at least the majority of IMF member countries, with no single bloc wielding excessive power. The best way to ensure this is for the winner to be required to gain the support of a majority of both voting shares and member countries
  2. The selection process should be strengthened. This should include having a public application procedure open to anyone to apply, and sufficient time to allow proper deliberation, interviews held in public, and open voting procedures and
  3. A clear job description and qualifications should be set out. The right candidate needs to be – and be seen to be – independent, and able to work with a variety of stakeholders, including civil society groups.

Demands to end the ‘gentleman’s agreement’ have been supplemented by broader calls for a democratic governance reform. Imbalanced IMF voting rights, for example, have long-since been a bone of contention from structurally underrepresented countries.The latest IMF managing director selection process is set to coincide with the IMF’s 15th General Review of Quotas (see Observer Winter 2018). Far from being seen as an opportunity to bolster the Fund’s legitimacy with a comprehensive redistribution of voting rights, the 15th review is expected to cement the structural inequities, reigniting calls for governance reform.

Latest articles on this issue

IFI governance

News

Civil society calls for an end to the 'gentleman's agreement' and a merit-based, open and transparent MD selection process

Civil society calls for the IMF to ensure the next MD selection process is undertaken in accordance with a merit-based, open and transparent process, underpinned by criteria involving a demonstrated commitment to international human rights, feminist principles, green and equitable development, as well as  publicly available shareholder votes.

26 March 2024 | Letters

IFI governance

News

World Bank announces management staff changes, including key players in the ‘evolution roadmap’ process

Anna Bjerde appointed as Bank’s managing director of operations as Axel van Trotsenburg replaces Mari Pangetsu as managing director of development policy and partnerships.

5 April 2023

Finance

Analysis

World Bank Group Evolution: Technical fixes or urgently needed reform?

World Bank Evolution Roadmap’s proposed superficial technical patches favouring the ‘logic’ of the market will likely fail to deliver the structural changes needed to support borrowing countries amidst global crises.

19 July 2023 | At Issue

IFI governance

Analysis

Democratic deficit in World Bank presidential appointment: Where is the evolution?

The World Bank Group needs to address its democratic deficit and lack of accountability. As it prepares to elect a new president and implement its “evolution roadmap”, it should use these key opportunities to embrace a profound reform.

5 April 2023

IFI governance

Analysis

The IMF at the 75th anniversary of the Universal Declaration of Human Rights: The need for governance reform

As the world celebrates the 75th anniversary of the Universal Declaration of Human Rights, it is time the IMF’s shareholders use the opportunities provided by the anniversary and growing calls for reforms to the international financial architecture to redesign the IMF’s governance structures and programmes to ensure they are consistent with the commitments outlined in 1948 and with international human rights law.

5 April 2023 | At Issue

Social services

News

Malpass makes World Bank a pariah with opposition to TRIPS waiver

World Bank President comes out against temporarily waiving intellectual property rights on Covid-19 vaccines

13 July 2021

IFI governance

Commentary

BWP's reaction to the resignation of World Bank's President David Malpass

The new World Bank's president should be appointed through a merit-based, transparent process with criteria publicly available and candidates being able to present their platform.

17 February 2023 | Statement

IFI governance

News

IMF's Independent Evaluation Office appoints new director and releases 2023 work plan

Changes in leadership have been announced at the WB Independent Evaluation Group and IMF Independent Evaluation Office. Furthermore, the IMF IEO published its 2023 Work plan introducing two new governance evaluations of the IMF’s mandate and its Exceptional Access Policy.

8 December 2022

Knowledge

News

It’s just the tip of the iceberg: civil society organisations call for an overhaul of the World Bank following the Doing Business Report scandal

More than 140 CSO groups and individuals call on the World Bank to focus on grappling with the harms caused by its undemocratic governance structure and biased publications like the Doing Business Report, and to take measures to decolonise the institution.

19 April 2022 | Letters

IFI governance

News

Staff changes in key positions at the IMF reflect adherence to out-dated gentleman’s agreement

IMF announces leadership changes as Gita Gopinath promoted to First Deputy Managing Director, Pierre-Olivier Gourinchas named Chief Economist, and Nadia Calviño heads IMFC.

6 April 2022