Frontmatter Page
Established in July 2001, the Independent Evaluation Office (IEO) provides objective and independent evaluation on issues related to the IMF. The IEO operates independently of IMF management and at arm’s length from the IMF’s Executive Board. Its goals are to enhance the learning culture within the IMF, strengthen the IMF’s external credibility, promote greater understanding of the work of the IMF throughout the membership, and support the Executive Board’s institutional governance and oversight responsibilities. For further information on the IEO and its work program, please see its website (www.imf.org/ieo) or contact the IEO at (202) 623-7312 or at ieo@imf.org.
Copyright
© 2006 International Monetary Fund
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ISBN-13: 978-1-58906-608-3
ISBN-10: 1-58906-608-1
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Contents
Message from the Director
Abbreviations
Overview of Developments in Financial Years 2005 and 2006
Evaluating the Evaluators: Messages from the External Evaluation of IEO
Developments in FY2005–06
Evaluation Projects Undertaken in Financial Years 2005 and 2006
IMF Technical Assistance
The IMF’s Approach to Capital Account Liberalization
IMF Support to Jordan, 1989–2004
Financial Sector Assessment Program
Multilateral Surveillance
Status of Ongoing Projects
Structural Conditionality in IMF-Supported Programs
The Role of the IMF in Determining the External Financing Envelope in Sub-Saharan African Countries
The IMF’s Advice on Exchange Rate Policy
Looking Ahead: The IEO Work Program and Future Menu of Topics
Aspects of IMF Corporate Governance—Including the Role of the Board
The IMF’s Interactions with Its Member Countries
The IMF’s Research Agenda
The IMF’s Approach to International Trade Issues
Appendixes
Objectives and Modes of Operation of the IEO
Revised Administrative Budget: Independent Evaluation Office
IEO Outreach Seminars and Workshops in 2005–06
Terms of Reference for the External Evaluators of IEO, September 14, 2005
Evaluation of Prolonged Use of IMF Resources: Recommendations, Board Response, and Subsequent Follow-Up
Evaluation of the Role of the IMF in Recent Capital Account Crises: Recommendations, Board Response, and Subsequent Follow-Up
Evaluation of Fiscal Adjustment in IMF-Supported Programs: Recommendations, Board Response, and Subsequent Follow-Up
Evaluation of Poverty Reduction Strategy Papers and the Poverty Reduction and Growth Facility: Recommendations, Board Response, and Subsequent Follow-Up
Evaluation of the Role of the IMF in Argentina, 1991–2001: Recommendations, Board Response, and Subsequent Follow-Up
Evaluation of IMF Technical Assistance: Recommendations, Board Response, and Subsequent Follow-Up
Evaluation of the IMF’s Approach to Capital Account Liberalization: Recommendations, Board Response, and Subsequent Follow-Up
Evaluation of IMF Support to Jordan, 1989–2004: Recommendations, Board Response, and Subsequent Follow-Up
Evaluation of the Financial Sector Assessment Program: Recommendations, Board Response, and Subsequent Follow-Up
Evaluation of the IMF’s Multilateral Surveillance: Recommendations, Board Response, and Subsequent Follow-Up
Box
2.1 The Main Outputs of IMF Multilateral Surveillance
Tables
1.1 Completed and Ongoing IEO Work Programs
3.1 Sample Economies for the Evaluation
The following conventions are used in this publication:
In tables, a blank cell 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, 2005–06 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, 2005/06) indicates a fiscal or financial year, as does the abbreviation FY (for example, FY2006).
“Billion” means a thousand million; “trillion” means a thousand billion.
“Basis points” refer to hundredths of 1 percentage point (for example, 25 basis points are equivalent to ¼ of 1 percentage point).
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 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.
Message from the Director
This third Annual Report, the first under my tenure as Director of the Independent Evaluation Office (IEO), describes the activities of the IEO during the past year and a half. We have aligned the time frame of the report with that of our financial and work program years. As a result, during this transitional year, developments over a period exceeding one calendar year are covered.
The past year has been a very important one in the history of the IEO. As envisaged at the time of the creation of the office, the fifth year of operation of the office coincided with a period of reflection about what had been achieved and what changes would help the IEO better fulfill its original mandate of increasing transparency and accountability, as well as strengthening the learning culture of the IMF. As part of that exercise, the Executive Board appointed an External Evaluation Panel and charged it with investigating whether the IEO is meeting its goals.
The panel’s report was discussed by the Executive Board in April 2006. Executive Directors agreed with the report that the IEO had served the IMF well and had earned strong support across a broad range of stakeholders. They also welcomed the panel’s observation that inside and outside interviewees were overwhelmingly of the view that the IEO has acted independently. Directors concurred that a more focused orientation, together with strong support from the Executive Board and management, would help ensure the IEO’s continued usefulness and relevance. Chapter 1 of this Annual Report discusses the main findings and recommendations of the Evaluation Panel as well as the reactions of Executive Directors and describes concrete actions taken since then to follow up on the recommendations.
Chapter 2 of the Annual Report summarizes the findings and recommendations of five additional completed evaluations: on IMF Technical Assistance; the IMF’s Approach to Capital Account Liberalization; IMF Support to Jordan, 1989–2004; the Financial Sector Assessment Program (FSAP); and Multilateral Surveillance. The status of three ongoing projects, on Structural Conditionality in IMF-Supported Programs, on the Role of the IMF in Determining the External Financing Envelope in Sub-Saharan African Countries, and on IMF Advice on Exchange Rate Policy, is discussed in Chapter 3. Finally, Chapter 4 describes the recently approved work program for FY2007 and beyond, which adds four projects to the pipeline: Aspects of IMF Corporate Governance (including the role of the Executive Board), the IMF’s Interactions with Its Member Countries, the IMF’s Research Agenda, and the IMF’s Approach to International Trade Issues.
Important general lessons pertaining to strengthening IMF surveillance emerged from our two most recent evaluations that are particularly germane as the IMF implements its Medium-Term Strategy. The FSAP evaluation found that much improvement could be achieved in ensuring future coverage of all systemically important countries, in addressing cross-border issues and, more generally, in better integrating financial sector analysis with bilateral surveillance. The Multilateral Surveillance evaluation found that there is room to achieve a better integration of both financial and macroeconomic dimensions as well as bilateral and multilateral policy analysis and policy prescriptions. It called for a better “customer focus” in IMF products. This evaluation also stressed the need to enhance the impact of the Executive Board and the International Monetary and Financial Committee (IMFC) and smaller country groupings in multilateral surveillance activities.
Conducting effective evaluations of IMF activities is not possible without the cooperation of those being evaluated and feedback from capitals and external observers. I and the rest of the IEO staff would like to express our thanks to the Executive Board, IMF management, and the staff for their time and responsiveness. At the same time, we would also express our appreciation to the many outside stakeholders who have shared their thoughts and perspectives with us.
Thomas A. Bernes
Director
Independent Evaluation Office
Abbreviations
| EFF | Extended Fund Facility |
| FAD | Fiscal Affairs Department (IMF) |
| FSAP | Financial Sector Assessment Program |
| FSLC | Financial Sector Liaison Committee |
| FSSA | Financial System Stability Assessment |
| G-7 | Group of Seven |
| G-20 | Group of Twenty |
| GFSR | Global Financial Stability Report |
| ICM | International Capital Markets Department (IMF) |
| IEG | Independent Evaluation Group (World Bank) |
| IEO | Independent Evaluation Office (IMF) |
| IFI | International financial institution |
| IMF | International Monetary Fund |
| IMFC | International Monetary and Financial Committee |
| IOSCO | International Organization of Securities Commissions |
| JSA | Joint Staff Assessment |
| JSAN | Joint Staff Advisory Note |
| LTPE | Longer-term program engagement |
| MCM | Monetary and Capital Markets Department (IMF) |
| MDG | Millennium Development Goals |
| MFD | Monetary and Financial Systems Department (IMF) |
| MTS | Medium-Term Strategy |
| OECD | Organization for Economic Cooperation and Development |
| OTM | Office of Technical Assistance Management |
| PEM | Public expenditure management |
| PPM | Post-program monitoring |
| PRGF | Poverty Reduction and Growth Facility |
| PRS | Poverty Reduction Strategy |
| PRSP | Poverty Reduction Strategy Paper |
| RAP | Resource allocation plan |
| ROSC | Report on the Observance of Standards and Codes |
| TA | Technical assistance |
| TACSN | TA Country Strategy Notes |
| TAIMS | TA Information Management System |
| TOR | Terms of reference |
| WEO | World Economic Outlook |