- International Monetary Fund
- Published Date:
- September 1998
Published August 1997
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Good governance is important for countries at all stages of development…. Our approach is to concentrate on those aspects of good governance that are most closely related to our surveillance over macroeconomic policies—namely, the transparency of government accounts, the effectiveness of public resource management, and the stability and transparency of the economic and regulatory environment for private sector activity.
IMF Managing Director
Address to the United Nations
Economic and Social Council
July 2, 1997
The International Monetary Fund has long provided advice and technical assistance that has helped to foster good governance, such as promoting public sector transparency and accountability. Traditionally the IMF’s main focus has been on encouraging countries to correct macroeconomic imbalances, reduce inflation, and undertake key trade, exchange, and other market reforms needed to improve efficiency and support sustained economic growth. While these remain its first order of business in all its member countries, increasingly the IMF has found that a much broader range of institutional reforms is needed if countries are to establish and maintain private sector confidence and thereby lay the basis for sustained growth.
Mirroring the greater importance the membership of the IMF places on this matter, the declaration Partnership for Sustainable Global Growth that was adopted by the IMF’s Interim Committee at its meeting in Washington on September 29, 1996, identified “promoting good governance in all its aspects, including ensuring the rule of law, improving the efficiency and accountability of the public sector, and tackling corruption” as an essential element of a framework within which economies can prosper. The IMF’s Executive Board then met a number of times to develop guidance for the IMF regarding governance issues.
The Guidance Note reprinted in this pamphlet, adopted by the Board in July 1997, reflects the strong consensus among Executive Directors on the significance of good governance for economic efficiency and growth. The IMF’s role in these issues has been evolving pragmatically as more was learned about the contribution that greater attention to governance issues could make to macroeconomic stability and sustainable growth. Executive Directors were strongly supportive of the role the IMF has been playing in this area in recent years. They also emphasized that the IMF’s involvement in governance should be limited to its economic aspects.
Taking into account lessons from experience and the Executive Board’s discussions, the guidelines seek to promote greater attention by the IMF to governance issues, in particular through:
A more comprehensive treatment in the context of both Article IV consultations and IMF-supported programs of those governance issues within the IMF’s mandate and expertise;
A more proactive approach in advocating policies and the development of institutions and administrative systems that eliminate the opportunity for bribery, corruption, and fraudulent activity in the management of public resources;
An evenhanded treatment of governance issues in all member countries; and
Enhanced collaboration with other multilateral institutions, in particular the World Bank, to make better use of complementary areas of expertise.
Policy Development And Review Department