Front Matter

Front Matter

Author(s):
International Monetary Fund. Independent Evaluation Office
Published Date:
August 2014
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    IEO

    Independent Evaluation Office

    of the International Monetary Fund

    EVALUATION REPORT

    Recurring Issues from a Decade of Evaluation

    Lessons for the IMF

    © 2014 International Monetary Fund

    Cataloging-in-Publication Data

    Joint Bank-Fund Library

    Recurring issues from a decade of evaluation: lessons for the IMF / prepared by an IEO team led by Shinji Takagi; the IEO team included Roxana Pedraglio and Jérôme Prieur. - Washington, D.C.: International Monetary Fund, 2014.

    p.; cm.

    At head of title: IEO—Independent Evaluation Office of the International

    Monetary Fund.

    Includes bibliographical references.

    ISBN: 978-1-48437-685-0

    1. International Monetary Fund. Independent Evaluation Office—Evaluation.

    I. Takagi, Shinji, 1953–. II. Pedraglio, Roxana. III. Prieur, Jérôme. IV. International Monetary Fund.

    HG3881.5.I58 R43 2014

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    Foreword

    The Independent Evaluation Office (IEO) was established in 2001 to provide objective and independent evaluation on issues related to the IMF. During the first 12 years of its existence, it produced 20 evaluation reports on subjects covering various aspects of the IMF’s core areas of responsibility: surveillance, lending, and capacity building. In 2013, an external committee headed by José Antonio Ocampo, noting that IEO recommendations “deemed by the Fund to have been met… tend to be raised again in subsequent IEO reports,” proposed that the IEO prepare a review of “generic and substantive issues” that are not “encapsulated in specific recommendations” but deserve monitoring. This evaluation was prepared as a response to this proposal. It identifies major recurring issues from the IEO’s first 20 evaluations and assesses where they stand.

    The IEO found a number of issues that had recurred across a wide range of contexts. Of these, this evaluation has focused on those issues that have been identified most frequently in past IEO evaluations, namely:

    • Executive Board guidance and oversight;

    • Organizational silos;

    • Attention to risks and uncertainty;

    • Country and institutional context; and

    • Evenhandedness.

    The evaluation finds that though the IMF Board and Management have taken actions to address each of the five sets of issues, challenges remain in each. To varying degrees, these challenges all emanate from the IMF’s character as a multilateral institution with multiple objectives and a complex governance structure. Despite the difficulty, efforts to address these issues are important for enhancing the IMF’s effectiveness and credibility. The report thus concludes that more can and should be done, especially in terms of broad-based, strategic responses.

    The IEO believes that a framework of reviewing and monitoring recurring issues would be useful in establishing incentives for improvement, strengthening the Board’s oversight, and providing learning opportunities for the IMF. In this respect, I am encouraged by the broad agreement, expressed by the Managing Director and the Executive Board, with the findings of this report. It is hoped that this report, along with systematic efforts to address the issues identified therein, will contribute to enhancing the IMF’s effectiveness in performing its important mission for the global economy.

    Moises J. Schwartz

    Director

    Independent Evaluation Office

    Recurring Issues from a Decade of Evaluation: Lessons for the IMF

    This report was prepared by an IEO team led by Shinji Takagi. The IEO team included Roxana Pedraglio and Jérôme Prieur. The evaluation benefited from discussions with the authors of all past IEO evaluation reports and participants at internal workshops. It incorporates comments by IMF staff on an earlier version, though the final judgments are the responsibility of the IEO alone. Arun Bhatnagar and Annette Canizares provided administrative assistance. Rachel Weaving, Roxana Pedraglio, and Esha Ray provided editorial and production management assistance. The report was approved by Moises Schwartz.

    Abbreviations

    AFR

    African Department (IMF)

    APD

    Asia and Pacific Department (IMF)

    DSA

    debt sustainability analysis (IMF)

    EMDCs

    emerging market and developing country economies

    EPA

    ex post assessment (IMF)

    EPE

    ex post evaluation (IMF)

    ESF

    Exogenous Shocks Facility (IMF)

    EU

    European Union

    EWE

    Early Warning Exercise (IMF/FSB)

    FAD

    Fiscal Affairs Department (IMF)

    FDMD

    First Deputy Managing Director (IMF)

    FSAP

    Financial Sector Assessment Program (IMF/World Bank)

    FSB

    Financial Stability Board

    FSF

    Financial Stability Forum

    FSG

    Financial Sector Surveillance Group (IMF)

    FSI

    Financial Soundness Indicator (IMF)

    FSS

    financial sector surveillance (IMF)

    FSSA

    Financial Sector Stability Assessment (IMF)

    FY

    Fiscal or financial year

    G20

    Group of Twenty

    GFSR

    Global Financial Stability Report (IMF)

    G-RAM

    Global Risk Assessment Matrix (IMF)

    HRD

    Human Resources Department (IMF)

    ICD

    Institute for Capacity Development (IMF)

    ICM

    International Capital Markets Department (IMF)

    IEO

    Independent Evaluation Office (IMF)

    IMF

    International Monetary Fund

    IMFC

    International Monetary and Financial Committee (IMF)

    INS

    IMF Institute (IMF)

    JSA

    Joint Staff Assessment (IMF/World Bank)

    JSAN

    Joint Staff Advisory Note (IMF/World Bank)

    LIC

    low-income country

    LTPE

    longer-term program engagement (IMF)

    MAE

    Monetary and Exchange Affairs Department (IMF)

    MAP

    Mutual Assessment Program (IMF/G20)

    MCD

    Middle East and Central Asia Department (IMF)

    MCM

    Monetary and Capital Markets Department (IMF)

    MFD

    Monetary and Financial Systems Department (IMF)

    MIP

    Management Implementation Plan (IMF, IEO-related)

    OED

    Offices of Executive Directors (IMF)

    OTM

    Office of Technical Assistance Management (IMF)

    PMR

    Periodic Monitoring Report (IMF, IEO-related)

    PRGF

    Poverty Reduction and Growth Facility (IMF)

    PRGT

    Poverty Reduction and Growth Trust (IMF)

    PRS

    Poverty Reduction Strategy (IMF/World Bank)

    PRSP

    Poverty Reduction Strategy Paper (IMF/World Bank)

    PTA

    preferential trade agreement

    RAM

    Risk Assessment Matrix (IMF)

    RAP

    Resource Allocation Plan (IMF)

    RES

    Research Department (IMF)

    RSN

    Regional Strategy Note (IMF)

    SPR

    Strategy, Policy, and Review Department (IMF)

    SSP

    Statement of Surveillance Priorities (IMF)

    TA

    technical assistance

    TGS

    Technology and General Services Department (IMF)

    TOR

    terms of reference

    TSR

    Triennial Surveillance Review (IMF)

    UFR

    use of Fund resources (IMF)

    VE

    Vulnerability Exercise (IMF)

    WEO

    World Economic Outlook (IMF)

    WTO

    World Trade Organization

    The following conventions are used in this publication:

    • An en dash (–) between years or months (for example, 2008–09 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, 2008/09) indicates a fiscal or financial year, as does the abbreviation FY (for example, FY2009).

    • “Billion” means a thousand million; “trillion” means a thousand billion.

    As used in this publication, the term “country” does not in all cases refer to a territorial entity that is a state as understood by international law and practice. As used here, the term also covers some territorial entities that are not states but for which statistical data are maintained on a separate and independent basis.

    Some of the documents cited and referenced in this report were not available to the public at the time of publication of this report. Under the current policy on public access to the IMF’s archives, some of these documents will become available 3 or 5 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 types of documents may become available 20 years after their issuance. For further information, see www.imf.org/external/np/arc/eng/archive.htm.

    Executive Summary

    This evaluation seeks to help the IMF enhance its effectiveness by identifying major recurring issues from the IEO’s first 20 evaluations and assessing where they stand. These issues have affected the IMF’s performance in all of its core areas of responsibility: surveillance, lending, and capacity development. Their recurrence in different contexts in multiple IEO evaluations suggests that they are intrinsic to the nature of the institution, with deep roots in its culture, policies, and governance arrangements.

    The evaluation has been prepared in response to the 2013 External Evaluation of the IEO, which proposed that the IEO prepare a review of “generic and substantive issues” that are not “encapsulated in specific recommendations” but deserve monitoring. The External Evaluation made this proposal as a way to strengthen the follow-up process for Board-endorsed IEO recommendations, which in its authors’ view had become a “box-ticking” exercise that tended to dilute their substance (Ocampo, Pickford, and Rustomjee, 2013, pp. 23–24, 26). This report aims to contribute to strengthening the follow-up process by focusing on key issues that have recurred in IEO evaluations, rather than on specific recommendations and their implementation.

    The present evaluation focuses on recurring issues in the following five areas:

    • Executive Board guidance and oversight;

    • Organizational silos;

    • Attention to risks and uncertainty;

    • Country and institutional context; and

    • Evenhandedness.

    The evaluation finds that though the Board and Management have taken actions to address each of the five sets of issues, challenges remain in each, and are likely to persist. To varying degrees, these challenges all emanate from the IMF’s character as a multilateral institution with multiple objectives and a complex governance structure. Despite their difficulty, efforts to address these issues are important for enhancing the IMF’s effectiveness and credibility. More can and should be done, especially in terms of broad-based, strategic responses.

    Issues for Board Consideration

    The recurring issues identified by the evaluation in five areas—(i) Executive Board guidance and oversight, (ii) organizational silos, (iii) attention to risks and uncertainty, (iv) country and institutional context, and (v) evenhandedness—are to varying degrees inherent to the nature of the IMF and are thus likely to present ongoing challenges for the institution. This raises the question of how best to address them, going forward, in view of the IMF’s overall institutional priorities and resource constraints. Despite their long-term nature, the IMF should try to mitigate their adverse impact while keeping these issues at the forefront of its agenda.

    This evaluation, given its nature as a stock-taking exercise and in keeping with the suggestion of the 2013 External Evaluation of the IEO, does not propose specific recommendations on how to address the five sets of issues reviewed in the report. Nonetheless, after preparing this evaluation, the IEO believes that a framework of reviewing and monitoring recurring issues would be useful in establishing incentives for progress, strengthening the Board’s oversight, and providing learning opportunities for the IMF.

    In light of this conclusion, the IEO recommends that the following reports be prepared for the Board periodically:

    • An IEO report, similar to this one, identifying and reviewing important issues that have recurred in its evaluations. This could be done every five years.

    • A status report, prepared by staff, to monitor the progress the IMF has made in addressing recurring issues, focusing on the big picture rather than on the implementation of specific IEO recommendations that will continue to be monitored via the Periodic Monitoring Report (PMR). The first staff report could be prepared within two years, followed by similar reports every five years thereafter.

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