Front Matter

Front Matter

International Monetary Fund. Independent Evaluation Office
Published Date:
August 2010
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    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 ( or contact the IEO at +1-202-623-7312 or at

    © 2009 International Monetary Fund

    Production: IMF Multimedia Services Division

    Cover: Lai Oy Louie

    Cataloging-in-publication Data

    IMF interactions with member countries / [prepared by an IEO team led by John Hicklin]. – Washington, D.C.: International Monetary Fund, 2009.

    p.; cm. – (Evaluation report (International Monetary Fund. Independent Evaluation Office)

    Includes bibliographical references.

    ISBN 9781589069435

    1. International Monetary Fund. I. Hicklin, John, 1953-II. International Monetary Fund.

    Independent Evaluation Office. II. Series: Evaluation report (International Monetary Fund.

    Independent Evaluation Office)

    HG3881.5.I58 I435 2009

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    International Monetary Fund, Publication Services

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    The following conventions are used in this publication:

    • In tables, a blank cell or N/A 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, 2008–09 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, 2008/09) indicates a fiscal or financial year, as does the abbreviation FY (for example, FY2009).

    • “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.


    This evaluation investigated the effectiveness of IMF interactions with member countries. It found that IMF interactions were least effective with advanced and large emerging economies, together accounting for about 90 percent of global GDP. Interactions were most effective with low-income countries (those eligible for the Fund’s Poverty Reduction and Growth Facility), and, to a lesser extent, with other emerging economies, reflecting the broad effectiveness of interactions in a program and/or technical assistance context. In general, interactions contributed to a good exchange of views and provided objective assessments. However, in other areas, including the international dimensions of IMF surveillance, effectiveness and quality were not rated highly. Outreach with stakeholders beyond government was found to contribute little to the effectiveness of IMF interactions. The evaluation also found that interactions were undermanaged, although some individuals managed particular interactions very well.

    The evaluation’s recommendations aim at improving the effectiveness of core IMF activities, which will be more important as the financial crisis subsides. They are also relevant to the implementation of initiatives that have taken shape since the close of the evaluation period and that are too recent to be assessed—both the new responsibilities supporting international policy coordination that the IMF has been given in the wake of the crisis, and the new country-level approaches that the IMF has adopted. As Executive Directors stressed in their discussion of the report in December 2009, concerns raised in the evaluation about the effectiveness and independence of Fund surveillance in advanced and large emerging economies merit serious consideration. The perceived lack of candor and value-added, and concerns about evenhandedness, point to challenges requiring close follow up.

    Going forward, IMF management’s formulation of a plan to implement the recommendations endorsed by the Board will provide an opportunity to consider how these issues will be managed in the context of a time-bound action plan with monitorable benchmarks for assessing results. Given the critical importance of interactions to the Fund’s overall effectiveness, ongoing and future IEO evaluations will have more to say about them in particular contexts. In the meantime, it is hoped that this report will contribute to a fruitful debate about how best to pursue the needed improvements.

    John Hicklin

    Acting Director

    July–October 2009

    Independent Evaluation Office

    IMF Interactions with Member Countries

    This report was discussed by the IMF’s Executive Board on December 14, 2009. Under the overall direction of then IEO Director Thomas A. Bernes (through July 2009), the evaluation team was led by John Hicklin and Sarat Chandran (through August 2009) and included Joanne Salop, Louellen Stedman, Marie Thérèse Trasino, Roxana Pedraglio, Scott Standley, Jennet Hojanazarova, Angela Lisulo, and, at various stages, Iqbal Zaidi, Nils Bjorksten, Hugh Young, Rob Gregory, and Armen Gomtsyan. Contributions were commissioned from Tony Dean, John Dodsworth, Anthony Elson, Michael Hammer and Shana Warren, Arntraud Hartmann, Leonardo Martinez-Diaz, David Peretz, Jan Aart Scholte, Shinji Takagi, Paulo Vieira da Cunha, and Kenneth Watson. Administrative assistance was provided by Annette Canizares, Arun Bhatnagar, Jeanette Abellera, Erika Marquina, and Sarah Balbin. Editorial and production assistance was provided by Rachel Weaving and Esha Ray. In cases of potential or perceived conflict of interest, team members recused themselves from interviews with country officials or staff and related follow-on work. The IEO is responsible for all judgments—and any errors—contained in the report, and the views are not necessarily those of individual members of the team, including of co-leader Sarat Chandran. By contrast, background papers commissioned in the context of this evaluation are the views of the authors and not necessarily of the IEO. The final report was approved by John Hicklin in his capacity as Acting Director.



    African Department


    Asia and Pacific Department


    Asia Pacific Economic Cooperation


    Association of Southeast Asian Nations


    Bank for International Settlements


    Central America, Panama, and the Dominican Republic Technical Assistance Center


    Caribbean Regional Technical Assistance Center


    Contingent Credit Line


    Communauté Économique et Monétaire de l’Afrique Centrale


    Civil society organization


    Deputy Managing Director


    European Central Bank


    Eastern Caribbean Currency Union


    Executive Director


    Extended Fund Facility


    Exogenous Shocks Facility


    European Union


    European Department


    External Relations Department


    Flexible Credit Line


    First Deputy Managing Director


    Financial Sector Assessment Program


    Gross domestic product


    Global Financial Stability Report


    Group of Seven major industrial countries


    Group of Twenty industrial and emerging market countries


    Heavily Indebted Poor Countries Initiative


    Human Resources Department


    Independent Evaluation Office


    International Monetary Fund


    Middle East and Central Asia Department


    Monetary and Capital Markets Department


    Managing Director


    Multilateral Debt Relief Initiative


    Nongovernmental organization


    Organization for Economic Cooperation and Development


    Office of Executive Director


    Policy Development and Review Department


    Public Information Notice


    Purchasing power parity


    Poverty Reduction and Growth Facility


    Poverty Reduction Strategy Paper


    Policy Support Instrument


    Princeton Survey Research Associates International


    Regional Economic Outlook


    Research Department


    Report on the Observance of Standards and Codes


    Regional technical assistance center


    Stand-By Arrangement


    Selected issues paper


    Strategy, Policy, and Review Department


    Sub-Saharan Africa


    Technical assistance


    Triennial Surveillance Review


    Union Économique et Monétaire Ouest Africaine


    Use of Fund resources


    United Nations Development Program


    World Economic Outlook


    Western Hemisphere Department


    Working Party 3 (OECD)

    Executive Summary

    This evaluation assesses the degree to which IMF interactions with member countries were effective and well managed in 2001–08, with particular attention paid to 2007–08. It contains a number of findings that are relevant to the tasks that lie ahead for the Fund in implementing the new responsibilities it has recently been given to help members deal with the global financial crisis.

    Overall, the evidence is mixed. While one may be tempted to take solace from relatively high perceptions of overall effectiveness in some country groupings, such reaction needs to be tempered by clear evidence of lack of agreement between the authorities and staff on the scope of interactions in some cases, and of widely varying effectiveness in particular roles. Interactions were effective in a program and technical assistance context and, in general, in contributing to a good exchange of views and in providing objective assessments. However, in other areas, including in the international dimensions of its surveillance and other work, where one would expect the IMF to excel, effectiveness and quality were not rated highly.

    The evaluation evidence shows that IMF interactions were least effective with advanced and large emerging economies. They were most effective with PRGF-eligible countries, and, to a lesser extent, with other emerging economies. Particularly troubling was the continuing strategic dissonance with large advanced economies, especially about the Fund’s role in international policy coordination, policy development, and outreach. The authorities did not give the Fund high marks for its effectiveness in these areas. Neither did staff, who nevertheless aimed to do more. The evidence also points to limited effectiveness with large emerging economies, many of whom saw the surveillance process as lacking value and/or evenhandedness.

    The evaluation found that outreach with stakeholders beyond government contributed little to the effectiveness of IMF interactions. The Fund’s transparency policy did less than staff had hoped to increase the Fund’s traction, as some authorities blocked timely dissemination of mission findings. Dissemination initiatives designed to gain influence in domestic policy debates by repositioning the Fund as an informed analyst—and distancing it from the negative legacy of past engagement—remain work in progress.

    The evaluation found that interactions were undermanaged, although some individuals managed particular interactions very well. The Fund’s strategy was ineffective in enhancing traction with surveillance-only countries. The Fund paid too little attention to the technical expertise and other skills that might have added value, and neglected to manage pressures that staff felt to provide overly cautious country assessments—a finding of major concern, especially in respect to staff work on systemically important countries. In PRGF-eligible countries, an institutional strategy replete with attractive financing, debt relief, and strong links to donor funding made for an abundance of traction. But in some cases it also led to what authorities perceived to be arrogant and dictatorial staff behavior—though they saw evidence of progress in recent years. Staff incentives and training largely ignored interactions, and responsibilities and accountabilities for relationship management were not clear.

    The following recommendations aim at enhancing the effectiveness of IMF interactions with members:

    • To make the Fund more attractive to country authorities and promote traction: (i) improve the quality of the international dimensions of the Fund’s work; (ii) recruit specialist skills and bring more experts on country visits, especially where traction is waning; (iii) articulate menus of products and services for emerging market and advanced economies; and (iv) replace the now defunct country surveillance agendas with strategic agendas to enhance country focus and accountability.

    • To improve the effectiveness of outreach: (v) clarify the rules of the game on outreach; and (vi) decide how to handle the Fund’s negative reputational legacy in countries where it is a factor undermining interactions, and equip staff with the skills and resources to follow through.

    • To improve the management of interactions: (vii) develop professional standards for staff interactions with the authorities on country assessments; (viii) increase mission chief and staff tenure and training, and improve incentives for interactions; and (ix) clarify relationship management responsibilities and accountabilities.

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