Journal Issue

IMF Watchdog: The Independent Evaluation Office: Pushing for Change at the IMF

International Monetary Fund. External Relations Dept.
Published Date:
September 2004
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To get objective and substantive feedback on the IMF’s performance, the Executive Board established the Independent Evaluation Office (IEO) in July 2001. The IEO has produced a series of detailed reports on aspects of the IMF’s work. The reports are used to evaluate how the IMF does its job and to help formulate desirable changes in policies and practices.

The IEO reports to the IMF’s Executive Board. It works at arm’s length from the Board and independently of the management and staff of the institution. The IEO comprises a director and 12 other staff, most of them recruited from outside the IMF.

The IEO’s website ( gives detailed information on its terms of reference, work to date, status of ongoing projects, evaluation reports, and seminars and outreach activities. The website also provides opportunities for interested stakeholders (country authorities, academia, nongovernmental organizations, and other members of civil society) to interact with the IEO in defining its work program, determining the terms of reference of individual studies, and submitting substantive inputs to these studies.

The IEO develops its work programs on the basis of internal discussions and broad-based consultations. Studies completed during 2002-04 were evaluations of prolonged use of IMF resources; the role of the IMF in recent capital account crises in Korea, Indonesia, and Brazil; the role of the IMF in Argentina during the crisis of 2000-02; and the effectiveness of the Poverty Reduction Strategy Paper (PRSP) process and the Poverty Reduction and Growth Facility (PRGF). An evaluation of IMF technical assistance is expected to be completed in 2004, as envisaged under the 2003-04 work program. The 2004-05 work program expands the IEO’s evaluation efforts to four projects, which will include the Financial Sector Assessment Program and Financial Sector Stability Assessments; the IMF’s approach to capital account liberalization; the role of multilateral surveillance; and a country case study.

Common themes in IEO evaluations

The IEO’s initial reports contained several common themes related to program design and uncertainty, surveillance, and conditionality and ownership.

Program design and uncertainty

  • Risks should be explicitly taken into account in program design, and excessively optimisti assumptions avoided. Explicit contingency planning would help make programs more flexible. Greater transparency about the assumptions and rationale of program design would permit more rapid redesign in the event contingencies actually occur.


  • Surveillance should inform program design. Based on its surveillance activities, the IMF should provide the authorities with a frank assessment of critical weaknesses and encourage the authorities to develop a reform plan.

  • Greater candor is key to making surveillance more effective.

  • Systematic stocktaking allows for greater learning from experience, especially in countries with IMF-supported programs.

Conditionality and ownership

  • Domestic political commitment to core policy adjustments is more important than specific conditions.

  • The IMF should consider “second-best” adjustment programs that meet minimum criteria, and should also be prepared to hold back financing when country ownership of programs is insufficient or programs do not meet minimum criteria.

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