INTERNATIONAL MONETARY FUND AND THE WORLD BANK
Enhancing Collaboration: Joint Management Action Plan (Follow-Up to the Report of the External Review Committee on IMF-World Bank Collaboration)
Prepared by the Staff of the International Monetary Fund and the World Bank
Approved by Mark Allen (IMF) and Danny Leipziger (World Bank)
September 20, 2007
- Executive Summary
- I. Introduction
- II. Background and Changing Context
- III. Staff Follow-Up Activities
- IV. Joint Management Action Plan
- V. Moving Forward
- 1. Key Country-level Actions
- 2. Key Financial Sector Actions
- 3. Key Fiscal Sector Actions
- 4. Key Actions on Technical Cooperation
- 5. Key Human Resources Actions
- 6. Key Institutional Actions
- 1. Joint Management Action Plan Implementation Matrix: Follow-Up to the Report of the External Review Committee
- A. Staff Survey on Bank-Fund Collaboration
- B. Work Stream Reports
- C. Bank-Fund Staff Retreat: Following-up on the Malan Report
Abbreviations And Acronyms
Anti-Money Laundering/Combating Terrorism Financing
Country Assistance Strategy
Development Policy Loan
Debt Sustainability Analysis
External Relations Department (IMF)
External Relations Vice Presidency (World Bank)
Fiscal Affairs Department
Financial Sector Assessment Program
Fiscal Strategy Brief
Financial Sector Liaison Committee
Highly-Indebted Poor Country
International Bank for Reconstruction and Development
International Development Association
International Financial Corporation
International Monetary and Finance Committee
Joint Implementation Committee
Joint Management Action Plan
Joint Staff Advisory Note
Low-Income Countries Under Stress
Millennium Development Goals
Multilateral Debt Relief
Medium-Term Strategy of the IMF
Operations Policy and Country Services
Policy Development and Review Department
Public Expenditure and Financial Accountability
Public Expenditure Review
Poverty Reduction and Economic Management Network
Poverty Reduction and Growth Facility
Poverty Reduction Strategy Paper
Policy Support Instrument
Poverty and Social Impact Analysis
Review of Standards and Codes
IMF Statistics Department
Statistical Capacity Building Program
World Economic Outlook
In March 2006, the Managing Director of the International Monetary Fund (IMF) and the President of the World Bank commissioned the External Review Committee on IMF-World Bank Collaboration to look at the status of institutional collaboration and provide suggestions for improvement. The Committee’s report, released in February 2007, called for the strengthening of the culture of collaboration in the two institutions, and made a number of specific proposals in that direction. Following informal Board discussions in the Bank and the Fund, the Spring Development Committee and IMFC communiqués welcomed the Report’s messages and said that Ministers looked forward to seeing how the two institutions would take them forward.
The Joint Management Action Plan (JMAP) was prepared against this background, and the actions agreed between Bank and Fund managements in the JMAP are scheduled to be presented in informal Board meetings in early October. The JMAP will be launched immediately after the Annual Meetings. The goal is for most new systems to be operational in time for the preparation of FY09 budgets.
The JMAP draws on the results of a staff survey, recommendations from six staff work streams, and a joint staff retreat. These inputs found that collaboration has generally worked well, but could be improved. They pointed to specific steps to strengthen collaboration—building on existing good-practice approaches and consistent with the applicable policies of the two institutions, including those governing issues of confidentiality—rather than dramatic changes or the addition of bureaucratic layers.
The attached JMAP implementation matrix (Table 1) sets out the full list of actions agreed by the six work streams around which consensus developed at the retreat.
Taken together, the agreed actions in the JMAP are designed to:
|PROPOSAL OR PRINCIPLE SET OUT IN EXTERNAL REVIEW COMMITTEE REPORT||PROPOSED IMPLEMENTATION/ACTION1|
|1. The Bank, the Fund and other development parties should agree on what issues are ‘macro-critical’ for each country and who is responsible for what (including in the context of CASs/updates).||➣ For each country in which Bank and Fund are both active, primary responsibility for coordinating work programs to reside with Fund mission chief and Bank country director (or other interlocutor assigned by respective Area Department/Region).|
➣ At least once a year, in time to influence upcoming work programs, they will:
(i) discuss key country-level instruments as basis for coordinating work programs;
(ii) identify macro-critical sectoral issues, assign lead responsibilities for these areas, and identify gaps, with this process underpinning annual work plans and prioritization of technical assistance programs; and
(iii) share details on likely input requirements from other institution.
➣ Outcome of work program discussions to be summarized in brief memo to files, with matrix of activities and resource implications attached.
(i) Once vetted by area department director and regional vice president, summary of macro-critical sectoral issues and sharing of responsibilities to be reported to Bank and Fund Executive Boards in relevant documents.
(ii) Above to replace existing annex in Fund documents on World Bank assistance.
➣ Country teams to routinely:
(i) invite Fund mission chief/Bank Country Director/regional PREM sector manager/lead economist to interdepartmental pre-brief meetings;
(ii) provide post-mission debriefings;
(iii) share drafts of briefing papers, staff reports, and technical documents for review and comment.
|2. Work on macroeconomic stability and the aggregate effects of aid, including increased aid flows, must take into account what is happening at the sectoral level. The Fund should rely on the Bank for sectoral assessments.||➣ Bank staff to share sectoral data and analytic models (underlying Bank analysis) with Fund staff within a reasonable time when requested.|
➣ Fund teams to better anticipate requests for Bank analysis and register these requests with Bank staff as early as possible, to facilitate work planning.
➣ Requests for and delivery of Bank-provided analysis to be managed through Bank country units.
➣ Unanticipated requests, including timing of their provision, to be negotiated on best-efforts basis and delivered as agreed.
|3. Since the Bank has responsibility for analyzing sectoral aspects of public expenditure, and the Fund should have regard to the quality of public expenditure when considering fiscal aggregates, it is essential that the Bank is in a position to provide the Fund with timely advice, for example, through undertaking Public Expenditure Reviews.||PREM/PDR (in consultation with other units) to develop cross-support window to manage formal requests from the Fund for analytic work from the Bank in four areas—”topping-up” existing analytic work; ensuring complementary work in under-funded country programs; PSIAs; and rapid response for unanticipated requests and emerging problems. To this end, they should: (i) examine the feasibility and plausibility of various funding sources—from the Bank’s budget, the Fund’s budget, and/or donors via a trust fund; and|
(ii) provide recommendations for rationing in the face of possible excess demand, building on existing prioritization mechanisms in the Bank and the Fund.
➣ As enhanced resources for cross support in sectoral areas will need to be translated into professional skills to carry out the incremental work, Bank Networks (PREM, Sustainable Development and Human Development) to review their professional skills mix, especially for analyzing the sectoral/macro interface of aid and public expenditures as it affects the economy’s supply-side response and growth prospects.
|4. The Fund has to ... provide the Bank with comprehensive macroeconomic assessments of all countries, including small economies and micro-states, and not only those with a Fund program.||➣ Fund staff to provide in timely manner formal assessment letters (or recent Board documents if available), cleared by management, pursuant to IMF Assessment Letters Policy, upon request from Bank staff.|
➣ Fund staff to share data and macro frameworks (including underlying analytic models) with Bank staff within a reasonable time when requested.
|5. Delineation of lead responsibilities should not be based on a country’s income level [but] around central issues and the involvement of the Bank or Fund in a country should depend on a country’s views of its needs and circumstances and the relative expertise of the institutions.||➣ Agreed. Principle underpinning #1-4 above. No further action.|
|6. The Bank and the Fund need to better coordinate the delivery of all forms of technical assistance. The objective of technical assistance should be on capacity and institution building in the recipient country and must be responsive to the needs of the country. Whether technical assistance is provided by the Bank or the Fund should depend on the relative expertise of the institutions. There should be no ‘distortions’ in either the demand or delivery of technical assistance as a result of different funding arrangement, nor the ‘pricing’ of technical assistance by either institution.||➣ Bank and Fund country teams to consult as they prepare their annual work programs, including for technical assistance and capacity building. plans. Fund to share, for example, Regional Strategy Notes, Regional Allocation Plans, Fiscal Strategy Briefs (FSBs) and Financial Sector Strategy Notes. Bank to share CASs and Interim Strategy Notes (including medium-term plans for analytic work) and annual country work programs for economic and sector work and analytic and advisory activities.|
➣ Each institution to respond promptly to important country priorities, with emphasis on timely delivery. Mid-year review of work programs and operational budgets would offer such an opportunity, but some resources should be set aside ahead of time to handle urgent and high-priority country demands.
➣ When work program is changed, other institution to be notified promptly. Similarly, Bank and Fund TA reports should also be provided to the other institution (at least in draft form) within 90 days after conclusion of field work.
(* See Technical Cooperation stream for collaboration on thematic issues)
|7. Financial Sector Liaison Committee (FSLC) should be given an elevated status, .. .mandate widened to promote collaboration on all financial sector issues, including being specifically empowered to better coordinate technical assistance to member countries||➣ Bank and Fund to :|
(i) enable better knowledge management and information sharing utilizing electronic platforms, with posted material to include: regional financial sector strategy notes and work plans; mission schedules, guidelines, terms of references for financial sector technical assistance missions; and
(ii) collaborate on development of shared financial sector indicators, and databases resulting from joint assessments and other work.
➣ FSLC to:
(i) elevate one/two meetings per year to Fund MCM director and Bank FPD vice president.
(ii) act as umbrella for other financial sector coordination activities, such as for asset/liability management and capital market development;
(iii) test new processes for sharing information on financial sector technical assistance strategies; .
(iv) renew practice of sponsoring meetings of Bank-Fund teams to discuss technical assistance follow-up for countries recently completing FSAP assessments;
(v) establish subcommittee to review FSAP policies and practices and provide input to 2009 Board review of FSAP program; and
(vi) coordinate ongoing efforts to assess implications of recent revisions to Basel Core Principles and possible revisions to other standards for FSAP assessments and joint paper being prepared.
|8. . the delineation of areas of responsibility for financial sector issues should not be based on .a country’s income levels. . endorses the IEO recommendation that the Fund take the lead where there are significant domestic or global stability issues, and the Bank . where financial sector development issues are paramount.||➣ Action already under implementation as part of follow-up to IEO Report.|
|9. Improved integration and harmonization of work on fiscal issues. ... In terms of ‘fiscal space’, there should be no suggestion that there is a trade-off between short-term stability and long-term growth.|
... integrated Bank-Fund approach to fiscal policy design that integrates the macro and compositional issues in determining stable fiscal positions. Fund cannot focus on macroeconomic stability and fiscal aggregates, without regard for the sectoral level. .Important that the Bank provide the Fund with timely inputs on efficiency and effectiveness of countries’ public expenditure programs.
|➣ Bank to:|
(i) use CAS process to establish broad priorities for analytic work on fiscal issues (including PSIA), for follow-up resource allocation in annual budgets, with Fund staff providing inputs into CAS process, including suggesting areas for analytic work.
(ii) use economic and sector work products to define broad strategic goals for fiscal policy, with explicit goal to strengthen analysis of fiscal policy and growth over time;
(iii) provide Fund staff with concept notes and related documents for economic and sector work and seek comments; and
(iv) monitor collaboration on fiscal sector issues through PREM thematic groups.
➣ Fund to:
(i) use briefing papers and existing staff reports to define macro-fiscal strategy for country, drawing on Bank inputs on fiscal compositional issues where appropriate;
(ii) share with Bank staff draft Surveillance Agendas for comment and encourage discussion with Bank counterparts on Fund surveillance priorities in the fiscal area;
(iii) share with Bank staff Fiscal Strategy Briefs (FSBs) and seek comments as they are updated, with FSBs currently produced by FAD to reflect Bank input to cover expenditure composition issues; and
(iv) more systematically raise questions related to Bank/Fund coordination on fiscal sector issues in internal review process.
|10 ... The Bank and the Fund need to better coordinate the delivery of all forms of technical assistance. The objective of technical assistance should be on capacity and institution building in the recipient country and must be responsive to the needs of the country. Whether technical assistance is provided by the Bank or the Fund should depend on the relative expertise of the institutions. There should be no ‘distortions’ in either the demand or delivery of technical assistance as a result of different funding arrangement, nor the ‘pricing’ of technical assistance by either institution.||➣ Bank and Fund country teams to :|
(i) consult as they prepare annual work programs for technical assistance and capacity building; (ii) identify priority items in other’s work program on which they want close coordination, and gaps in combined work programs that should be filled; (iii) build in flexibility to respond promptly and on best-efforts basis to high priority but unanticipated technical assistance requests; (iv) elevate unresolved issues on technical assistance to periodic meetings between Bank Regional Vice President and Fund Area Department Director.
➣ Bank and Fund to :
(i) create web portal on which up-to-date points of contacts and documents are posted, including terms of reference for technical assistance missions and planned activities in each country;
(ii) Fund staff to put in place procedures for systematic and timely sharing of technical assistance reports and other technical-assistance-related documents; and
(iii) Bank staff to put in place procedures for systematic and timely sharing of work programs for economic and sector work and analytical and advisory activities standard project and mission documents.
➣ Specific recommendations in Fiscal Sector:
(i) roles and modalities for staff participating in other institution’s missions to be clarified;
(ii) for ROSCs and PEFAs, coordination and planning to be strengthened by sharing mission schedules, and through cross-participation in missions, with consultations on newly scheduled missions to increase;
(iii) Bank staff to share concept notes (where they exist) and pre-mission documents for comments by Fund staff and Fund staff to share terms of reference for upcoming technical assistance missions with Bank staff and seek comments before finalization;
(iv) consultation by Bank staff with FAD on large revenue administration reform projects to be more systematic; and
(v) monthly coordination meetings of Bank/Fund staff working on public debt management and debt markets to continue, covering inter alia mission schedules (including with cross participation).
➣ Specific recommendations for Financial Sector
(i) At country level, Bank regional sector manager to be formally designated as contact point for IMF staff on financial sector technical assistance issues.
(ii) Collaboration on financial sector technical assistance and AML/CFT assessments to be enhanced by regularly inviting relevant staff from other institution to participate in planning meetings and sharing draft terms of reference and concept notes in advance of missions.
➣ Specific recommendations for Statistics
(i) Bank and Fund to identify contact points for statistics in each region.
(ii) Fund Statistics Department to provide advance notice of GDDS missions where Bank participation is needed, so Bank can secure resources.
|11. Collaboration should be a big part of staff performance assessments||➣ Routinely solicit staff and managerial performance feedback from sister institution.|
➣ Improve performance assessment of staff on secondment. Each institution to ensure that full performance assessment by sister institution manager is obtained, to be taken into account in determining secondee’s merit pay.
|12. ... any impediments in terms of different remuneration and retirement arrangements should be resolved. ...eventually the convention should be that , wherever possible in terms of their professional discipline, staff moving into senior positions will have worked ‘on the other side of 19th Street.’||➣ Remove administrative impediments to inter-institution mobility.|
(i) open internal vacancies to staff from sister institution; and
(ii) advertise vacancies in each other’s internal website, with “hotlinks” to direct staff to announcements in sister institution for selected internal vacancies and all external vacancies.
➣ Establish exchange program driven by institutional needs—subject to available resources—with assignments advertised exclusively in sister institution.
|13. Joint Implementation Committee (JIC) on low-income countries needs to be revitalized, with focus on proactively promoting collaboration and a dialogue on countries and the appropriate exchange of information, consistent with applicable confidentiality rules.||➣ Replace JIC by information and monitoring clearing-house function— consistent with decentralized processes prevailing nowadays—anchored in PREM and PDR. PREM and PDR to:|
(i) establish/maintain web portal and help desk for staff on issues related to Bank-Fund collaboration;
(ii) coordinate periodic reports to Management on current practices for managing Bank-Fund relationship, and on identification of good practices and policy or implementation issues that warrant institutional-level attention;
(iii) ensure that each institution is aware of other’s relevant policy initiatives to prevent failures of coordination during implementation; and
(iv) coordinate substantive Bank-Fund agenda for, and follow-up to, Spring/Annual Meetings and other relevant international meetings (for example, UN development summits).
|14. Strengthening the review function of PREM unit in the World Bank would allow it to more effectively work with the Policy Development and Review Department in the Fund in terms of facilitating collaboration between the two institutions in their dealings with low-income countries.||➣ In coordination with area departments and regions, PREM and PDR to examine review schedules as they apply to joint country products to see how both institutions’ needs can best be met. Using help-desk function, PREM and PDR to assist country teams in advance planning and resolving operational issues that might arise.|
➣ Replace current ad-hoc arrangements by clear statements of good practice. Periodic reports by PREM and PDR to review practice across regions and area departments, with recommendations for improvement to respective Managements.
|15. Members should readily consent to the sharing of information with the other institution.||➣ For documents not already routinely shared between Bank/Fund staff, transmittal letters to authorities to indicate that, unless otherwise instructed, attached reports will be made available to other institution, which would agree to maintain confidentiality.|
|16. Continued close collaboration on debt sustainability assessments is vital given the expansion in the volume and source of funds available to LICs.||➣ To enhance usefulness of DSAs, Bank staff should be consulted by Fund staff on public DSAs for middle-income countries.|
➣ Public DSAs to be integrated into long-term fiscal strategy that underpins both Fund and Bank advice to countries, and used to analyze particular fiscal policy issues.
|17. Work...on how [Bank and Fund] would collaborate in responding to hypothetical crises - undertake ‘war games’. ... The design and implementation by the Bank and the Fund of new or expanded financing facilities and liquidity instruments to help countries face shocks should complement rather then duplicate each other.||➣ Both institutions to continue to take steps to ensure their ongoing preparedness to respond in coordinated manner in event of financial crisis, building upon lessons learned from past crises.|
(i) improve coordination on country issues—through new procedures for country team coordination, including regular meetings on work programs, agreement on instruments and division of labor, and new systems for requesting and tracking inputs from the other institution;
(ii) enhance communications between the staff of the two institutions working on common thematic issues—through new electronic platforms for the sharing of focal point names, documents, mission schedules, and other information among staff in the two institutions working on country teams and/or the financial sector, fiscal issues, and technical cooperation; and
(iii) improve incentives and central supports for collaboration on policies, reviews, and other institutional issues—through new procedures for reflecting collaboration in staff and managerial performance reviews; and the replacement of the Joint Implementation Committee by an information and monitoring clearinghouse function anchored in the Policy Development and Review Department (PDR) in the Fund and the Poverty Reduction and Economic Management Network (PREM) in the World Bank, which also will manage the institutional systems for cross-support.
The JMAP aims to translate identified good-practice approaches to collaboration into standard practices. Systematic implementation will be facilitated by the establishment of dedicated portals and electronic platforms supporting the retrieval and sharing of information, building upon existing systems. The JMAP also envisages a two-pronged approach to monitoring, relying on collaboration data tracked by the portals, once established, and periodic self-assessments by units within both institutions.
Taken together, the above actions should lead to improvements in coordination and communications between the two institutions, thereby nurturing the culture of collaboration in both. Of course, important differences will remain between the two institutions—from their distinctive cultures to more specific organizational and administrative differences—and successful implementation will depend on mutual understanding of and respect for these differences. It will depend critically on sustained attention by the managements of the two institutions, with whom primary responsibility for Bank-Fund collaboration will continue to rest.
PDR and PREM, in collaboration with other units, will prepare periodic progress reports, highlighting emerging examples of good practice as well as problem areas that need further attention. An interim report will be prepared for the two managements in time for the 2008 Annual Meetings, as a basis for taking stock of implementation efforts to date. The first progress report for the two Boards will be prepared in time for the 2009 Annual Meetings. Subsequent reporting arrangements will be determined in due course.