- International Monetary Fund. Independent Evaluation Office
- Published Date:
- September 2011
© 2011 International Monetary Fund
Production: IMF Multimedia Services Division
Please send orders to:
International Monetary Fund, Publication Services
P.O. Box 92780, Washington, D.C. 20090, U.S.A.
Tel.: (202) 623-7430 Fax: (202) 623-7201
Message from the Director
I am pleased to present the eighth Annual Report of the Independent Evaluation Office (IEO), describing activities during the year from May 1, 2010 to April 30, 2011.
This year, the IEO issued an evaluation of IMF Performance in the Run-Up to the Financial and Economic Crisis: IMF Surveillance in 2004–07. The IEO has also completed an evaluation of IMF Research: Relevance and Utilization, which was discussed by the Executive Board in early FY2012.
The Crisis evaluation found that the IMF fell short in warning member countries about risks to the global economy and the buildup of vulnerabilities in their own economies in the run-up to the crisis that began to manifest in mid-2007. The evaluation called on the IMF to recalibrate its analysis in surveillance to emphasize risks and vulnerabilities and to cultivate a culture that is proactive in crisis prevention. The nature of the crisis meant that the report focused on financial sector issues, yet most of its recommendations dealt with institutional changes that would improve the IMF’s capacity to scan for risks and vulnerabilities across the board. These recommendations included changes to institutional structures and incentives to strengthen accountability, foster better assessment of risks, promote candor and clarity in messages, and enhance the ability to “speak truth to power.”
I am encouraged by the broad agreement expressed by the Managing Director and Executive Board with the conclusions and recommendations of this report. The report has also led to a vigorous debate among IMF staff. This introspection is an important catalyst for change. Indeed, the IMF has already undertaken a number of initiatives to address the weaknesses revealed by the crisis. However, the IEO believes that additional changes are needed to reform the IMF’s culture, governance, and practices so that the IMF is better prepared to confront future challenges.
The problems uncovered by this evaluation are long-standing, and many of them had been identified in the past. Thus, it is critical to establish a process of monitoring reforms and evaluating their impact, as the basis for designing new and corrective initiatives. The implementation of these initiatives will need close attention by Management and oversight by the Executive Board, as well as the support of authorities in member countries.
A full summary of the evaluation report and the Executive Board discussion is provided in Chapter 2 of this report. Chapter 2 also reports on the Management Implementation Plan for the 2009 IEO report on IMF Interactions with Member Countries.
In my message last year, I touched briefly on the issue of follow-up on IEO evaluations. Concerns have been expressed about weaknesses in the process established for this purpose. As the IEO approaches its tenth anniversary, I believe that it will be important to address this issue, to ensure that the IEO continues to contribute to a process of learning that strengthens the institution. The issue is discussed further in Chapter 3.
In early FY2011, the IEO consulted with the Executive Board and other stakeholders within and outside the Fund on a work program going forward. On this basis, it identified topics for several future evaluations, two of which were launched in FY2011—one reviewing the IMF’s advice on international reserves and the other exploring the IMF’s role as a trusted advisor to member countries. The IEO is consulting with stakeholders to help define the proposed focus and approach for these new evaluations. Draft issues papers are available on the IEO website for public comment. Chapter 4 briefly summarizes the tentative scope of these two evaluations and mentions other topics that may be launched during FY2012.
The recent global financial and economic crisis and its lessons have highlighted the importance of a strong, effective, and well-equipped IMF. Going forward, the IEO will continue to work to make a meaningful contribution to this end.
Moises J. Schwartz
Independent Evaluation Office