The IMF oddsmakers

By Felix Salmon
May 18, 2011

The Economist has one list of William Hill odds for who’s going to succeed Dominique Strauss-Kahn as managing director of the IMF; William Hill itself has a slightly different list. I would be much obliged if a reader in the UK would please pop down to William Hill for me and place a lot of money on Christine Lagarde at 20-1, as she’s listed on the William Hill site, or even at 14-1, where the Economist has her.

Kemal Dervis is the clear favorite here. But I don’t buy it: for one thing, the single most important issue facing the managing director of the IMF right now is Greece. And the bad blood between Greece and Turkey is so deep and so ingrained that I simply can’t see how any Turk could be credibly impartial on the subject of Greece.

Second-favorite is Montek Singh Ahluwalia, who at 67 is too old for the job. He’s followed by the top EU official on the list, Axel Weber. Again, given that the head of the IMF is going to be essentially brokering a deal between Greece, on the one hand, and Germany, on the other, it doesn’t make sense to me to put a German in that job.

Also near the top of the list are Gordon Brown, who’s already been ruled out by David Cameron; John Lipsky, who’s American and therefore a non-starter for anything but a temporary position; and Peer Steinbrück, who’s also German. Interestingly, Arminio Fraga is not on the list at all, and neither is Turkish finance minister Mehmet Simsek, one of the few people to openly lobby for the position.

If it were possible to short these odds, I’d happily short all Turks, Germans, and North Americans, including Mark Carney and Agustin Carstens. But since it’s not, I’ll make do with a long bet on Lagarde. Anybody willing to help me out?

Update: William Hill have now tightened Lagarde in to 10/1. Still worth a £25 bet, though. Thank you Matt!


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She’s shortened to 10-1 I’m afraid, but I still tried to put down £100 for you. Unfortunately William Hills are lightweights and wouldn’t let me stake more than £25 online, so that will have to do for now.

They’re offering:

5/2 Kemal Dervis – Turkey
5/1 Montek Singh Ahluwalia – India
7/1 Axel Weber – Germany
8/1 Tharman Shanmugaratnam – Singapore
8/1 Gordon Brown – UK
10/1 John Lipsky – USA
10/1 Mark Carney – Canada
10/1 Christine Lagarde – France
12/1 Philipp Hildebrand – Switzerland
12/1 Peer Steinbruck – Germany
16/1 Stanley Fischer – Israel
16/1 Changyong Rhee – South Korea
16/1 Hyun Song Shin – South Korea
16/1 Trevor Manuel – South Africa
20/1 Mohamed El-Erian – Egypt
25/1 Agustin Carstens – Mexico

Posted by mattclarkdotnet | Report as abusive

Apparently the comedy £25 limit is because it’s a market especially susceptible to ‘inside information’. And no, the nice man on the phone couldn’t keep a straight face when he said it.

So I made the best of a bad job and popped £25 each on Philipp HIldebrand and Trevor Manuel for you as well.

Posted by mattclarkdotnet | Report as abusive

Thank you Matt!

Felix, what about Tharman Shanmugaratnam? You didn’t mention why he wouldn’t be a good candidate, but his odds are fairly good. I don’t know anything about him.

Posted by kmbutler | Report as abusive

Gordon Brown – UK: opposition at home
John Lipsky – USA: out because of US world bank president Zoellick
Axel Weber – Germany: resigned from German Bundesbank, likely because of different opinions with the government, so also opposition at home
Christine Lagarde – France: faces an inquiry at home ( 3347659 ) and French hold the job very often, hard to sell to non G7 countries
Mark Carney – Canada: unlikely as Canada is linked very strong to the USA

Peer Steinbruck – Germany: wants to run for chancellor in 2013, faces opposition in own party, but has public support; government will consider supporting him to get rid of him (as he is in the opposition party SPD)

Kemal Dervis – Turkey: Looks like a good bet regarding his experience in international financial organizations

Hildebrand would be a workable compromise.

Posted by S_2 | Report as abusive

amartya sen

Posted by rjs0 | Report as abusive

Pray tell why you consider 67 as too old for the job.

Posted by TomLindmark | Report as abusive

I think you have to give Montek Singh Ahluwalia better odds than you do — he is on the list because of a widespread feeling that it is time for an east Asian to head the IMF, and he is for various reasons more plausible than any of the others on the list who might benefit from the same idea.

Posted by Christofurio | Report as abusive

TomLindmark, it’s not me, it’s the IMF. You have to be 65 or younger to get the job. They’d have to change the rules to appoint M Singh Ahluwalia, or Stan Fischer.

Posted by FelixSalmon | Report as abusive

Trevor Manuel would be a purely political choice. He has no training in economics and has a trade school qualification.

He was no university degree, let alone advanced degrees. He was ‘finance minister’ but all he did was to rely on the advice of consultants. The head positions in SA are all about race and little about meritocracy. This is the sought of influence peddling that South Africa is now renowned for. Making Trevor Manuel even the Deputy of the IMF would be an insult to the very concept of merit based appointments.

Posted by RS108 | Report as abusive

William Hill lists Lagarde now at 6/4, Paddy Power at 4/5 ( tting/current-affairs/imf-betting/Next-I MF-chief-2682647.html ). But both differ significantly on Montek Singh Ahluwalia (5/1 vs. 33/1) and other Asian candidates.

Posted by S_2 | Report as abusive

I know that David Cameron hates Gordon Brown (while Brown himself has basically campaigned for the position) but can there be a case made for Brown as the head of the IMF? That is to say, domestic politics aside (ha!), is Brown a valid candidate?

Posted by GregHao | Report as abusive

@RS108 I disagree completely with your assessment of Manuel, he successfully managed to balance many different forces (labour unions, leftist pressure, big business etc etc) while Finance minister of SA and the country implemented some very tough economic reforms that ensured lower inflation and smaller budgets in SA. Maybe he’d habe the attitude and balls to actually stop bailing out every single Euro nation that can’t keep their spending in check. Ask yourself this question, would Mexico or Brazil have received such “wonderful” loans as Greece has? No – clearly the wonderfully qualified heads of the IMF have not used their “fantastic” degrees properly.

Posted by Sicklyafrican | Report as abusive