Front Matter

Editor(s):
Ruben Lamdany, and Hali Edison
Published Date:
December 2012
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    Independent Evaluation at the IMF The First Decade

    Ruben Lamdany and Hali Edison, Editors

    © 2012 International Monetary Fund

    Cover design: designMind, Washington, DC

    Cataloging-in-Publication Data

    Independent evaluation at the IMF : the first decade / Ruben Lamdany and Hali Edison, editors.

    — Washington, D.C. : International Monetary Fund, 2012.

    p. ; cm.

    Includes bibliographical references.

    ISBN 978-1-47553-126-8

    1. International Monetary Fund. Independent Evaluation Office.

    2. Financial institutions, International—Evaluation. I. Lamdany, Ruben, 1954– II. Edison, Hali J. III. International Monetary Fund.

    HG3881.5.I58 I53 2012

    Acknowledgments and disclaimer: We are grateful for the editorial and production assistance provided by Rachel Weaving, Alisa Abrams, and Esha Ray and the administrative assistance provided by Arun Bhatnagar, Annette Canizares, and Mari Lantin. The papers in this volume represent the authors’ views and not necessarily those of the IEO or the IMF.

    Publication orders may be placed online, by fax, or through the mail:

    International Monetary Fund, Publication Services

    P.O. Box 92780, Washington, DC 20090, U.S.A.

    Tel.: (202) 623-7430 Fax: (202) 623-7201

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    www.elibrary.imf.org

    Contents

    The following conventions are used in this publication:

    • In tables, a blank cell or N/A indicates “not applicable,” ellipsis points (. . .) indicate “not available,” and 0 or 0.0 indicates “zero” or “negligible.” Minor discrepancies between sums of constituent figures and totals are due to rounding.

    • An en dash (–) between years or months (for example, 2011–12 or January–June) indicates the years or months covered, including the beginning and ending years or months; a slash or virgule (/) between years or months (for example, 2011/12) indicates a fiscal or financial year, as does the abbreviation FY (for example, FY2012).

    Some of the documents cited and referenced in this book were not available to the public at the time of publication of this book. Under current policy on public access to the IMF’s archives, some of these documents will become available five years after their issuance. They may be referenced as EBS/YY/NN and SM/YY/NN, where EBS and SM indicate the series and YY indicates the year of issue. Certain other documents are to become available 10 to 20 years after their issuance, depending on the series.

    Foreword

    The Independent Evaluation Office (IEO) of the International Monetary Fund (IMF) was created in 2001 to strengthen learning, accountability, and transparency at the IMF. Ten years after its establishment is an opportune time to assess its contributions and to explore how it could be more effective. We marked this important landmark in true evaluative form, with a conference that took place on December 6, 2011, focusing on IEO’s achievements and challenges. Madame Lagarde, Managing Director of the IMF, joined me in opening the Ten Years Conference. In her remarks, which follow this foreword, she highlighted IEO’s independence and explained that its “ruthless truth telling” is “critical to the IMF’s credibility and effectiveness.”

    This volume includes the material that was prepared as background for this conference, as well as statements by participants and some additional studies that take stock of what the IEO has achieved in the decade since its establishment. The introduction puts the contributions in context, pulling together the main messages and discussing the main lessons from across IEO evaluations. Part I of the volume provides remarks by my predecessors, Montek Singh Ahluwalia and Thomas Bernes, and myself on our vision for the IEO and on its challenges. It is followed by six studies in Part II that examine different aspects of the IEO, starting with an explanation of why independent evaluation is needed in international organizations and a brief history of how the IEO came to be. The other chapters in that section describe the evaluation process, provide a retrospective of the 18 reports issued by the IEO during its first decade, and examine the impact of IEO evaluations.1Part III includes statements by current and former IMF Executive Directors, current and past members of Management and senior staff, and important external stakeholders who participated in the conference. Participants emphasized IEO’s independence and the quality of its evaluations as key strengths. They also pointed to areas for improvement—in particular the framework for follow-up on IEO evaluations.

    I hope that the material presented in this volume will be helpful to the Executive Board and IMF Management, as well as to authorities in member countries, to understand how independent evaluation is contributing to the legitimacy and effectiveness of the IMF, and how the function can be strengthened. The discussions may also provide useful insights to academics and those interested in enhancing the evaluation function in other international organizations.

    Moises J. Schwartz

    Director

    Independent Evaluation Office

    Notes

    These evaluations can be found in the IEO website (www.ieo-imf.org), and summaries are included in Part IV of this volume.

    Remarks by IMF Managing Director Christine Lagarde

    The Independent Evaluation Office is an entity that not many organizations would tolerate. It goes under the skin of the institution, and under the skin of projects, reports, and ways of operating. It consults with IMF Management and takes what it wants of Management’s feedback, but it reports directly to the Executive Board. Obviously the Board’s Evaluation Committee, headed by Executive Director Majoro, plays a critical role here, and I would like to recognize the work of the eight members of this committee. Once reports of the IEO are approved by the Board they are published and can be checked by each and every member of the media or by any other observer who may like to either praise or criticize. The fact that not many organizations would allow such an arrangement is recognized by some of the Fund’s most qualified observers, including the journalist Martin Wolf. In an article prompted by the IEO’s review of how the Fund performed during the financial crisis,1 Wolf said, “The IMF’s quick reaction to the crisis made up for much of its initial neglect. Scrutinizing what it got wrong, it is again leading the way. Others should now follow.”2 Wolf has since observed that the Independent Evaluation Office is an important innovation and that it has produced superb evaluations of what has happened.

    “Ruthless Truth Telling” Critical to the IMF’s Credibility and Effectiveness

    The IEO has several missions: enhancing our learning culture, strengthening our external credibility, promoting a greater understanding of our work, and supporting the Board’s governance and oversight.

    For the IMF, the independent evaluation function is critical to both credibility and effectiveness. Credibility and effectiveness are two of the Fund’s key attributes, but only because they are also two of its key objectives. Credibility and effectiveness deserve and demand a constant effort from each of us. They are predicated on honesty, on the quality of our work, on our even-handedness. Because we in the Fund are keen to trade honestly on our credibility, and to continue to be effective in whatever we do—be it our surveillance, our recommendations, our technical advice, or our programs under the lending policies and the various instruments that we have in store—we want the IEO to continue to produce honest, fair, and demanding analysis in a constant dialogue with us. Seen in this context, the IEO is a true child of Lord Keynes, in that it carries out the mandate of “ruthless truth telling” at the heart of an institution whose own mission is to tell the truth.

    Over the last 10 years the IEO has addressed all the key components of the IMF’s work. IEO reports include assessments of the prolonged use of IMF resources and of fiscal adjustment under IMF programs; an evaluation of the enhanced Financial Sector Assessment Program; the 2007 evaluation of IMF structural conditionality; and the 2008 evaluation of IMF governance3—a study that has proved to be not only invaluable but the subject of many debates, with obviously yet more to come.

    Let us face it: anybody tends to be defensive when the findings about their work are negative. But given that we in the IMF trade on telling the truth and being honest in the review work that we do, in the programs we design, and in the technical assistance we provide, we ourselves should also be told the truth about the way in which we operate. This is a brave choice and one that we stand for. And we want to continue to have the support of the IEO and its ultimate honesty, because it is this internal honesty and internal truth telling that enhances our own ability to tell the truth.

    Progress Needed on Evaluation Follow-up

    I recognize that we need to make progress, particularly in the stage of implementing the recommendations from evaluation and in the follow-up to the implementation. We are open to ideas. We should explore again honestly what can be done and how it can best be done—without adding another layer of bureaucratic process on top of what exists, because we want to be very careful with our resources. I am sure that we have the creativity and agility to enhance effectiveness without adding to bureaucracy. If you in the IEO can propose such ideas, we should and will be better at implementing them.

    To conclude, I would certainly encourage you in the IEO to continue with your good work, and to make your own improvements as well. I am not suggesting that there should be an IEO of the IEO of the IEO, like Russian dolls nested one inside the other. Because, frankly, you already have plenty to do and we have plenty to do to work together in good cooperation with a good spirit.

    Notes

    IEO, IMF Performance in the Run-Up to the Financial and Economic Crisis: IMF Surveillance in 2004–07, 2011.

    Martin Wolf, “The IMF goes to the confessional,” Financial Times, February 9, 2011.

    IEO, Evaluation of Prolonged Use of IMF Resources, 2002; Fiscal Adjustment in IMF-Supported Programs, 2003; Financial Sector Assessment Program, 2006; Structural Conditionality in IMF-Supported Programs, 2007; Governance of the IMF: An Evaluation, 2008.

    Abbreviations

    ACP

    African, Caribbean, and Pacific Group of Countries

    ADB

    Asian Development Bank

    AfDB

    African Development Bank

    AFR

    African Department

    ARSC

    Annual Report on Structural Conditionality

    CG

    Conditionality Guidelines

    CGER

    Consultative Group on Exchange Rate Issues

    CMSR

    Consolidated Multilateral Surveillance Report

    CODE

    Executive Board Committee on Development Effectiveness (World Bank)

    EBRD

    European Bank for Reconstruction and Development

    ECF

    Extended Credit Facility

    ECG

    Evaluation Cooperation Group

    ECR

    Evaluation Completion Report

    EG

    Evaluation Group

    EIB

    European Investment Bank

    ESAF

    Enhanced Structural Adjustment Facility

    EVC

    Evaluation Committee (IMF)

    EVO

    IMF Evaluation Office (2000–01)

    FSAP

    Financial Sector Assessment Program

    FSSA

    Financial System Stability Assessment

    G-7

    An informal forum founded to coordinate economic policy among leaders of prominent industrialized nations including Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States

    G-20

    Steering committee created by the G-7, with membership of G-7 countries and systemically important developing countries

    GFSR

    Global Financial Stability Report

    IC

    Interim Committee (of the IMF Board of Governors, precursor to the IMFC)

    IDB

    Inter-American Development Bank

    IEG

    Independent Evaluation Group (World Bank Group)

    IEO

    Independent Evaluation Office of the IMF (as of 2001)

    IFAD

    International Fund for Agricultural Development

    IFI

    International financial institution

    IMF

    International Monetary Fund

    IMFC

    International Monetary and Financial Committee (of the IMF Board of Governors)

    IP

    Issues Paper

    IsDB

    Islamic Development Bank

    JMAP

    Joint Management Action Plan

    LIC

    Low-income country

    MCD

    Middle East and Central Asia Department

    MD

    Managing Director

    MDB

    Multilateral development bank

    MDG

    Millennium Development Goal

    MIP

    Management Implementation Plan

    MONA

    Monitoring of Fund Arrangements (Database)

    MTS

    Medium-Term Strategy

    NGO

    Nongovernmental organization

    OECD-DAC

    Organization for Economic Cooperation and Development-Development Assistance Committee

    OED

    Operations Evaluation Department (World Bank)

    OEG

    Operations Evaluation Group (International Finance Corporation)

    OEU

    Operations Evaluation Unit (Multilateral Investment Guarantee Agency)

    OGN

    Operational Guidance Note

    OVE

    Office of Evaluation and Oversight (Inter-American Development Bank)

    OIA

    Office of Internal Audit and Inspection

    PDR

    Policy Development and Review Department

    PIN

    Public Information Notice

    PMR

    Periodic Monitoring Report

    PRS

    Poverty Reduction Strategy

    PRSP

    Poverty Reduction Strategy Paper

    PRGF

    Poverty Reduction and Growth Facility

    PSIA

    Poverty and Social Impact Analysis

    RTAC

    Regional Technical Assistance Centers

    SACU

    Southern African Customs Union

    SADC

    Southern African Development Community

    SC

    Structural conditionality

    SSA

    Sub-Saharan Africa

    SU

    Summing Up

    TA

    Technical assistance

    TOR

    Terms of reference

    TSR

    Triennial Surveillance Review

    UN

    United Nations

    UNCTAD

    United Nations Conference on Trade and Development

    UNEG

    United Nations Evaluation Group

    WEO

    World Economic Outlook

    WG

    Working Group

    WP

    Working Paper

    WTO

    World Trade Organization

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