"Capacity development (CD) is one of the Fund’s three core activities and has grown in importance in recent years. It supports member countries’ efforts to build the institutions and capacity necessary to formulate and implement sound economic policies, thereby complementing the Fund’s surveillance and lending mandates. Member countries, partners, and external commentators give the Fund high marks for the quality of its CD. At the same time, efforts need to continue to strengthen Fund CD to serve members’ current and evolving needs.
The 2018 CD Strategy Review examines progress under the Fund’s 2013 CD Strategy and proposes a CD strategy for the next five years.
It notes substantial progress in addressing the 2013 recommendations, which included strengthening the CD governance structure, enhancing the prioritization processes, clarifying the funding model, strengthening monitoring and evaluation, promoting greater integration of TA and training, exploiting new technologies for delivery, and leveraging CD as outreach. However, background work for this review also pointed to the need to strengthen the CD framework further.
The review builds upon the existing CD strategy, focusing on two mutually reinforcing objectives. First, the impact of Fund CD needs to be increased by further strengthening integration with the Fund’s policy advice and lending operations, while continuing to make progress in framing CD through comprehensive strategies tailored to each member’s needs, capacity, and conditions, focusing on implementation and outcomes. Stronger coordination between CD and the Fund’s other core functions will better connect CD with countries’ risks and vulnerabilities and ensure surveillance and lending integrate lessons from CD more effectively. Second, the efficiency of CD needs to be increased by improving CD processes and systems. This will enhance transparency and strengthen the basis for strategic decision making.
Five specific areas of recommendations support the strategy. Likewise, they mitigate institutional risks stemming from the Fund’s CD activities. They include clearer roles and responsibilities for key internal and external stakeholders in the CD process; continued strengthening of prioritization and monitoring; better tailoring and modernization of CD delivery with a focus on implementation of TA recommendations; greater internal consultation and sharing of CD information; and further progress in external coordination, communication, and dissemination of information (Annex I)."
Mr. Richard I Allen, Ms. Majdeline El Rayess, Laura Doherty, and Priya Goel
This paper reviews the Public Financial Management (PFM) reform stategy for 16 Pacific Island Countries (PICs) during the period 2010-2020. The strategy was endorsed by the finance and economic ministers of the region (FEMM) in 2010. The paper analyzes more than 30 PEFA assessments carried out across the region. The region shares the generally slow pace of PFM reform that is also a feature of most developing countries. Some PICs have improved their PFM performance significantly, while others have done less well. PFM reforms have suffered from the small size and low capacity of many PICs, poorly designed PFM roadmaps, variable political suppport for reform, and vulnerability to natural disasters. The paper recommends that in the next five years, there should be a more granular and targeted approch to PEFAs. PICs should focus on basic PFM reforms and (where capacities allow) more transparent public finances, as well as better management of climate change considerations, public infrastructure, gender inequalities, and state-owned enterprises. Perseverance by countries in implementing reforms and leadership by finance ministries are critical. PFTAC’s advice is highly regarded across the region, and it could consider alternative modalities of CD delivery and stronger coordination with other development partners.
Mr. Richard I Allen, Majdeline El Rayess, Laura Doherty, Priya Goel, and Ms. Manal Fouad
from changes in the PEFA methodology as well as a reduction in the volume of CDdelivery. For 2017–2019, only 6 percent of total CD delivered by PFTAC covered this topic as compared to 20 percent for the period 2012–2016.
Figure 4. PEFA Performance over Time for Fiji, PNG, Samoa and Timor-Leste 20
Source: PEFA reports .
It is also interesting to compare the changes in PEFA scores for countries that have carried out more than one PEFA assessment over the past ten years . Figure 4 shows examples for PNG, Fiji, Samoa, and Timor-Leste. They confirm the
reflected in the Resource Allocation Plan (RAP), which lists expected CDdelivery activities for the coming year. The prioritization process also better integrates priorities at the country and regional levels through: (i) a stronger emphasis on aligning CD priorities outlined in area departments’ Regional Strategy Notes with country needs in both program and surveillance cases; and (ii) area departments’ channeling of authorities’ demands for CD to better inform the RAP process directly.
• Key priorities are adjusted each year and have recently included low
Board endorsed recommendations to strengthen the governance structure for CD operations and CD prioritization, clarify the funding model, reinforce the orientation of CDdelivery toward outcomes, enhance monitoring and evaluation, strengthen integration of technical assistance and training, exploit new technologies, and leverage CD in outreach. Updated CD Policies and Practices based on this review were endorsed by the Executive Board on September 4, 2014.
The current review builds on previous staff and Independent Evaluation Office CD reviews, policy reviews on
Themes for the 2018 Review
Proposed Framework for the Review
Box 1. Key Recommendations from 2013 CD Strategy Review
Box 2. Agility and Flexibility of the Fund’s CDDelivery
Box 3. Responsibilities of the Executive Board and the Managing Director in the Area of CD
Box 1. Produce shorter, more focused, and more comparable evaluations:
Figure 1. Capacity Development Approach
Figure 1. Share of Costs of Major IMF Activities, FY2016
Figure 2. Spending on Capacity Development
1. The principles presented in this document focus on areas that govern the Fund’s provision of CD, including its objectives, scope, prioritization, partnership with donors, delivery, monitoring and evaluations, and transparency.
2. These principles apply equally to technical assistance (TA) and training. They reflect important changes to the Fund’s CD activities over the last decade, including a marked rise in CDdelivery, a sharp expansion of donor financing, and more explicit attention to the results—improved outcomes in member countries
1. The principles presented in this document focus on areas that govern the Fund’s provision of capacity development (CD), including its objectives, scope, prioritization, partnership with donors, delivery, monitoring and evaluation, and transparency.
2. These principles apply equally to all CD activities. They reflect important changes over the last decade, including a marked rise in CDdelivery to around one-third of the Fund’s total annual spending, a sharp expansion of donor financing, increased recognition of the importance of
This statement summarizes the IMF’s policies and practices with regard to the delivery of capacity development (CD) activities. It updates the 2014 Statement on IMF Policies and Practices on Capacity Development and reflects the conclusions of the 2018 Review of the Fund’s Capacity Development Strategy, approved by the Executive Board on November 14, 2018. The purpose of the statement is to consolidate the guiding principles endorsed by the Board with policies and practices that are within the authority of IMF’s management and are followed by staff in carrying out capacity development activities. The statement is expected to be of use to IMF staff, Executive Directors and their staff, country authorities, and donors. It also serves as a point of reference for future reviews of the IMF’s CD activities.