Chapter 1. Overview of Developments in FY2010
- International Monetary Fund. Independent Evaluation Office
- Published Date:
- July 2010
During the financial year 2010, the Executive Board discussed two IEO evaluations: IMF Interactions with Member Countries and IMF Involvement in International Trade Policy Issues. The Board also approved a Management Implementation Plan (MIP) on the trade evaluation. In March 2010, the IEO also posted on its website final issues papers for two ongoing evaluations: Research at the IMF: Relevance and Utilization and IMF Performance in the Run-Up to the Current Financial and Economic Crisis. Recently completed evaluations will be discussed in Chapter 2, and the ongoing evaluations will be summarized in Chapter 3.
Monitoring of Implementation of IEO Recommendations
Follow-up on IEO recommendations endorsed by the Executive Board is vital to establishing accountability and completing the cycle of learning to which independent evaluation contributes. As outlined in previous Annual Reports, in 2007 the Board established a system for tracking follow-up on and implementation of Board-endorsed IEO recommendations. In sum, a MIP is presented to the Board for each IEO evaluation, proposing how to implement each recommendation endorsed by the Board. A Periodic Monitoring Report (PMR) is prepared by IMF management and staff and presented to the Board each year to update the implementation status of MIPs issued, as well as to report on the status of the implementation of recommendations from evaluation reports issued before MIPs were introduced.
IMF management produced the most recent PMR in October 2009. This PMR reviewed the status of actions identified in the MIP for the IEO evaluation of Structural Conditionality in IMF-Supported Programs, as well as outstanding items from the previous PMR relating to evaluations of IMF Exchange Rate Policy Advice and The IMF and Aid to Sub-Saha-ran Africa. The PMR concluded that all key performance benchmarks had been met or were on track for timely completion and proposed no new remedial actions; the Evaluation Committee broadly endorsed this assessment.
In reviewing the PMR, however, the Evaluation Committee noted that more needs to be done in some cases to achieve the broader policy objectives underlying specific IEO recommendations, despite the fact that specific actions previously proposed may have been completed. The Committee drew attention in particular to Board-endorsed recommendations from the IMF Exchange Rate Policy Advice evaluation, including the integration of macro and financial surveillance and the review of the stability of the system of exchange rates. The Committee further emphasized the need to improve implementation of Board-endorsed IEO recommendations, possibly including revisions to the PMR process.
Budget and Staffing
In FY2010, the IEO expended approximately 95 percent of its budgetary resources (see Appendix 1). The corresponding underspending (about 5 percent of the budget) resulted from several vacancies for significant periods throughout the year. Thomas Bernes, the IEO’s previous Director, retired in July 2009, and Moisés Schwartz joined only in February 2010; two out of the three other B-level positions were also vacant for several months. In addition, the IEO had to refill all of its six economist positions during the year due to staff departures. The savings from these vacancies were offset in part by higher spending on senior consultants (as contractual employees) to assist in the preparation of IEO evaluations.
Staffing developments over the course of FY2010 again highlighted the costs of high staff turnover for the IEO’s work. In July 2009, the IEO undertook an assessment of recent staffing experience, the main challenges encountered in recruiting and retaining employees, and the aspects of the IEO’s employment policies that contribute to these difficulties. In April 2010, the IEO presented to the Executive Board a list of mitigating measures, which were developed after discussing practical, legal, and budgetary implications with the Human Resources Department, the Legal Department, and the Office of Budget and Planning. Among the changes approved by the Board are the possibility, in limited circumstances, to extend the term limit of employment for IEO senior employees and economists from a maximum of 6 years to a maximum of 12 years and the possibility of hiring Research Assistants as noncontractual employees for up to 6 years. The Board also approved a series of changes aimed at strengthening the IEO’s actual and perceived independence, including the adoption of a policy wherein IEO employees hired directly from the Fund would lose the guaranteed right of re-entry to the Fund staff if their IEO employment extends beyond 6 years, as well as expansion of the categories of IEO’s employees subject to a 12-month “cooling off” period before they can join the Fund staff. The changes approved by the Executive Board are cost neutral, and they will enhance IEO’s technical excellence and its institutional knowledge of the Fund while maintaining IEO’s diversity and freshness of experience and perspectives.
On March 12, 2010, the IMF’s Executive Board approved the IEO budget for FY2011 of 5.4 million, consistent with zero real growth over FY2010 and in line with the parameters expected for the Fund as a whole. 1 This follows reductions in real terms of 4 percent and 0.2 percent in FY2010 and FY2009, respectively. These reductions, which took place in the context of the Fund-wide downsizing, required the IEO to reduce by one the number of economist positions, while holding nonstaff budgets constant. The IEO also presented indicative budgets for FY2012 and FY2013. These indicative budgets are consistent with zero real growth, but the IEO expects to revisit these budgets after the new Director has had the opportunity to establish a medium-term work program and to review the IEO’s staffing and human resource policies.
Outreach and Communication Activities
The 2005 External Evaluation of the IEO noted that outreach is a “necessary tool” to inform stakeholders about IEO analyses and findings for these findings to have an impact. The IEO maintains a website with easy access to completed evaluations, issues papers for ongoing evaluations, the IEO work program, and other publications. The IEO also publishes a semiannual newsletter, available in English, French, Portuguese, Russian, and Spanish. To publicize and encourage discussion of its work, the IEO organized or participated in a number of public events in FY2010. These are listed in Appendix 2.
The FY2011 budget reflects the Fund-wide change in the methodology for budgeting for regular staff positions and a 2 percent projected increase in nonstaff expenditures. The Executive Board also approved a carrying forward of unspent funds from the FY2010 budget for spending in FY2011 up to a limit of 5 percent of the FY2010 budget, consistent with the policy on the carry forward of funds adopted by the Board in the past.