What is the ‘Gentleman’s Agreement’?

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.

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. 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. 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. 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.


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