Main Findings

3. We agree on the need to narrow gaps in IMF research—efforts have been underway and will continue. Since 2008, the end of the period covered by the evaluation, the Fund has increased research in areas cited by the IEO. Topics covered include work on capital controls and macro-prudential policies, fiscal policy and debt sustainability, exchange rate regimes and stability of the international monetary system, monetary and exchange rate policies, optimal reserve holdings, reserves adequacy and country insurance, policy responses to the global financial crisis, fiscal multipliers and counter-cyclical policies, and various aspects of macro-financial linkages.

4. The report makes an important point about message-driven research, and could have delved more into this critical issue. Fund-relevant research will almost inevitably carry policy messages—that is what makes it relevant. But it is troubling if researchers feel that they need to toe a line or tilt empirical results. We support the call for vigilance against these risks and believe the report could do more in proposing concrete solutions.

5. The methodology employed to judge different research product lines would have benefited from taking explicit account of their intended purposes and audiences. For instance, in the discussion of technical quality, the report appears to have misunderstood the purpose of Regional Economic Outlooks (REOs), which are not simply research products but are also used as outreach tools, including as a means to engage policymakers. While the REO style may be narrative, policy recommendations are underpinned by rigorous research and provide analysis and messaging as well as policy advice that is grounded in cross-country and intra-regional analysis. To judge REOs by traditional academic metrics and benchmarks alone is therefore inappropriate. However, the report’s finding on the relevance and utilization of some REOs is well taken, and further efforts need to be made to improve these. The report could have used a more systematic framework for assessing the quality and relevance of Fund research, asking if the Board or Management had identified the goals of different lines of Fund research, and then evaluating outputs against those objectives.

Main Recommendations

6. Periodic strategic reviews of the functions and uses of research products merit further consideration. Such reviews could also consider how best to allocate time and resources among various research product lines and how best to improve the review process, taking into account budget constraints. If the Board agrees, staff will consider these issues and present proposals in the Management Implementation Plan (MIP). The recommendation to consult with member countries and the Executive Board on an indicative medium-term research agenda, however, raises concerns as it may limit flexibility and may be seen as a bureaucratic step. Notably, there is already consultation with the Board, for example, through periodic discussions of the Managing Director’s Work Program.

7. Staff generally support the need to consult more with country authorities on research topics prepared for surveillance. At the same time, staff and authorities will not always agree on which issues are most pressing, and staff will need to remain free to research the issues that they judge to be most important. The report should also recognize that the various research products differ with respect to the desirable degree of involvement of country authorities in the choice of topics. Selected Issues Papers (SIPs), for instance, are designed to provide background for bilateral surveillance, and so teams should normally be encouraged to consult with the authorities in advance on SIPs on a regular basis. This is not necessarily the case for all Fund research, especially on multilateral, theoretical, and/or cross-country work.

8. The recommendation to increase staff tenure is well taken, and knowledge of country specifics for research is clearly important. However, as noted in responses to previous evaluations, striking a balance between mission team stability on the one hand and the desire for cross-country perspectives, along with staff career development needs and department flexibility, on the other remains a complex challenge. An update on this important issue is provided in the Fourth Periodic Monitoring Report of Board-Endorsed IEO Recommendations.

9. We agree on the need to improve the ability of stakeholders to distill relevant findings and policy implications. Several initiatives have been undertaken since 2008 to begin to address this issue and more can be done. For example, the “Research at the IMF” website was created in 2009 precisely to promote the dissemination of IMF research, and there has been increased investment in other access channels such as the eLibrary and Google Book Search. The IEO also highlights the creation of the Staff Position Note/ Staff Discussion Note series since 2008 to help address this problem, to which we would add enhancements to publications such as the IMF Survey and Finance and Development.

10. As noted in paragraph 4, we agree on the need to promote openness to alternative perspectives. It is particularly important that researchers not feel that they need to toe a line or tilt empirical results. We will reflect on this issue and present proposals in the MIP.

11. While coordination of research could help avoid duplication—certainly necessary in a constrained budgetary environment—it is also important that individual research efforts are not stifled. As the report itself notes, there have been numerous attempts at coordination of research over the years. We believe there is merit in healthy competition of research efforts across departments and would not want to stifle this. By the same token, departments should not seek to force collaboration for individual pieces of research (e.g., SDNs, and other research outputs that represent the views of the individual authors). Nonetheless, collaboration with the Research Department and/or other functional departments having expertise in the topic should otherwise be expected, especially in Board papers with substantial analytical content. To help researchers across the Fund identify research priorities while avoiding duplication of effort, better information sharing and dissemination is needed within the institution. To achieve this, one possibility would be to resurrect the Committee on Research Priorities (CRP), with the Managing Director or First Deputy Managing Director chairing, and the Director of Research as secretary. The Director of Research could also report to the Executive Board once per year, reviewing major research accomplishments over the past year and laying out identified priorities for the following year.

Key IEO Findings

Directors broadly shared the main IEO findings. They concurred that, while global and core macroeco-nomic issues were adequately covered in IMF research, up until 2008, there were some gaps in the coverage of macro-financial linkages and capital account issues. They acknowledged, however, that efforts since then have narrowed these gaps, and urged staff to build on this progress. Directors also noted gaps in country-level research, especially for low-income countries where the influence of IMF research on policymaking is greatest.

Directors expressed concern regarding the finding that the technical quality of the various research products is uneven. Some Directors pointed out that the different purposes and intended audiences of different research outputs call for a differentiated approach to assessing quality.

Directors considered worrisome the finding that there is a widely held perception that IMF research is message-driven, or that policy conclusions do not always follow from the analysis. While recognizing that research produced by the IMF will inevitably carry policy messages—especially surveillance-oriented research—they considered it critical for the credibility of the institution that the conclusions of in-house research are not biased by the IMF’s position on the subject or excessively influenced by other work done internally, and, conversely, that its policy advice is grounded on robust analysis. In this context, many Directors underlined the importance of addressing concerns about the internal culture and institutional values—identified in previous IEO evaluations—with a number of Directors regarding staff diversity in terms of academic background and professional experience as critical in this regard. More broadly, Directors stressed that IMF research should aim primarily at improving the analytical tools for the IMF to carry out its core mission.

Directors agreed on the need for improved dissemination of IMF analytical work, allowing a wider group of stakeholders to distill relevant lessons and increasing its contribution to the policy debate. They welcomed the progress made since 2008 on this front, such as the new “Research at the IMF” website and the new Staff Position/Discussion Note series, and encouraged continued efforts in this area.

IEO Recommendations

Directors broadly endorsed the main recommendations of the IEO, and looked forward to further analysis and discussion in the context of the forthcoming Management Implementation Plan.

Directors generally saw merit in conducting a periodic strategic review of research products. Management and staff were encouraged to focus on how best to allocate resources among the various research product lines, balancing the trade-off between quantity and quality of research products; and to strengthen quality controls, the internal review process, and incentives to enhance the technical content of research, while taking into account budget constraints. More specifically, some Directors suggested re-examining the value-added of Regional Economic Outlook reports, while a few highlighted their usefulness to intended audiences. Most Directors also supported the IEO recommendation to set an indicative medium-term research agenda, possibly in consultation with member countries and the Executive Board, although a few Directors were not in favor of Board involvement in the agenda-setting process. At the same time, Directors underscored the need to retain adequate flexibility for staff to take on independent research projects.

Directors broadly supported the IEO recommendation to consult more with country authorities on research topics prepared for bilateral and regional surveillance, particularly for Selected Issues Papers. Recognizing that staff and the authorities do not always agree on the prioritization of issues, Directors agreed that staff should remain free to research the issues that they feel are most important. Longer country assignments for mission members could facilitate collaboration with authorities and enhance familiarity with country-specific conditions.

Directors agreed on the need to improve the management of IMF research and were open to the various proposals to achieve that objective. These include designating a Research Coordinator, or setting up a committee of department heads or department research coordinators chaired by management, tasked with coordinating activities across the IMF and setting standards for quality reviews, as well as addressing other weaknesses identified in the IEO report. A few other Directors cautioned that a centralized approach could undermine innovative thinking. Directors emphasized that, in promoting internal collaboration, efforts should be made to preserve healthy intellectual competition across departments. Before implementing new initiatives, many Directors called for an examination of the reasons behind the failure of similar efforts in the past, including the currently inactive Committee on Research Priorities.