Section IV Recommendations for Change

International Monetary Fund
Published Date:
April 2000
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140. In the recommendations below, we first lay out the general principle(s) governing each recommendation. Each recommendation also contains sufficient detail to ensure that the concept presented is clear. However, the recommendations are not intended to be blueprints for implementation. Putting them into practice successfully will require modification of some of our specific suggestions, and more detailed specification of others. We expect and welcome adaptation of the details of our recommendations. It is our expectation that the Executive Board will decide whether it agrees with the basic principles governing the recommendations, and leave it to Fund management to develop the details necessary to implement them.

141. The recommendations fall into two related sets. The first set contains what we consider to be the nine key, high-priority recommendations: these are suggestions for change that we believe are necessary to improve the effectiveness of the Fund’s research activities. The second set contains recommendations that supplement and reinforce the nine key ones.

142. Some of our recommendations directly address the Fund’s research activities. Others address issues in the overall organization of the Fund. While the latter have a more indirect link to the objective of improving the Fund’s research activities, they do have an important impact on the resources and incentives for research. We believe that it is important to improve aspects of the wider environment in which the research process operates in order for the organization to operate optimally. In laying out our recommendations, we distinguish between the two types.

143. A key principle behind all our recommendations is that for research to successfully meet the needs of the Fund, it must be encouraged by creating an environment conducive to the pursuit of creative ideas through appropriate incentives, accountability, and good management, and an avoidance of micromanagement.

Key Recommendations

Recommendations 1 through 3 focus on ways to allocate the Fund’s scarce resources for research.

The first recommendation addresses the need for a stronger coordinating mechanism to identify a research strategy and choose priority research projects (discussed in paragraphs 56–59). It also addresses the need for greater communication about ongoing or planned research projects (discussed in paragraphs 73 and 74), and the need to enhance the incentives to conduct high-quality research (discussed in paragraphs 94–108) by creating a mechanism for internal competition for resources for research products requiring additional resources. Furthermore, it addresses the need to increase staff interaction with the outside world by providing additional resources for conference participation (discussed in paragraphs 82–86), to improve the visiting scholars program by increasing transparency, and to allow reallocation of resources to enhance the collaboration between Fund staff and outside consultants (discussed in paragraphs 119–20).

Recommendation 1: Create a Committee on Research Priorities to assist in strategic planning and to support research activities in the Fund.

144. To improve the relevance, quality, and coordination of the Fund’s research, we recommend upgrading the role and responsibilities of the current Working Group on Fund Policy Advice, including:

  • expanding its priority-setting responsibilities;

  • giving it resources to allocate to specific research activities, and

  • renaming it the Committee on Research Priorities (CRP) to better reflect its new role.

145. The CRP should do the following.

  • Identify research priorities for the Fund through an annual strategic planning process involving all departments. This would also include the commissioning of specific research papers. These priorities and specific projects would set the agenda for the Fund’s research efforts in the year ahead. At an annual meeting, the Executive Board and management would review the research done in the previous year in relation to that year’s agenda, and discuss and approve the agenda proposed by the CRP for the coming year.

  • Encourage staff members, either individually or in partnership, with approval and time allocation from their departmental management, to submit proposals to the CRP seeking financial support for specific research projects (money for data collection, research assistance, travel, etc.). The CRP would evaluate and compare research proposals, and decide which projects should be allocated additional resources (guided by the Committee’s annual statement of research priorities). This would create a competitive process for submission of research proposals, and their transparent and fair evaluation.13

  • Through a transparent process, make decisions on inviting visiting scholars throughout the Fund and on projects involving contracts with outside researchers.

  • Be responsible for monitoring the projects it authorizes and evaluating their output. The Committee could make use of outside consultants to evaluate project output.

146. The members of the Committee on Research Priorities should be appointed by management and consist of staff chosen primarily for their strong research interests (and not necessarily on the basis of seniority). The Committee would normally be chaired by the Director of the Research Department, although Management should retain discretion on whom to appoint.

147. Management should encourage the submission of proposals to the Committee by acknowledging a department’s success in obtaining funding from the Committee in the annual performance reviews of department directors. The specific terms of reference of the Committee would need to be further elaborated by management.14

148. The budgets for the various activities of the Committee on Research Priorities should be decided by management and should come from reallocating some existing resources from departments to the CRP.

The second recommendation is designed to enhance the Fund’s commitment to research and ensure that staff have sufficient time to conduct high-quality research (discussed in paragraphs 65–68)

Recommendation 2: Introduce explicit departmental targets for staff time allocated to research activities.

149. Research cannot be treated as a residual activity if the Fund is to maintain its analytical capacity. Research produced for some Article IV consultations and other policy analysis research products such as the World Economic Outlook, the International Capital Markets report, G-7 notes, etc. has an established place in the organization. However, research above and beyond these products must be prevented from being squeezed out by operational demands. The amount of research conducted in the Fund should also be more transparently recorded in departmental budgets. We recommend that department directors, in consultation with management, set aside a percentage of staff time to be allocated to department-sponsored research, beyond that conducted as part of Article IV consultations or other policy analysis research products, and to independent research.15

150. The amount of time allocated to staff for these two categories of research would vary across departments, depending on departmental priorities, naturally with a higher allocation for the Research Department. The time allocation would be explicit in departments’ budgets, and department directors would be held accountable for meeting this target.

151. Given the current resource constraints, the success of this recommendation depends on the ability to free up staff time to conduct research over and above that produced for Article IV consultations and policy analysis research products. While Fund staff claim that they are currently too stretched for resources to put additional time aside for research, we believe that resources can be freed up and reallocated by implementing the recommendations we have identified below—in particular by reducing research activities with low value added and by increasing the efficiency of the research process. However, the Executive Board might also consider whether additional resources need to be allocated to research.

The third recommendation addresses the need for a different mix of research output in the Fund (discussed in paragraphs 44–49)

Recommendation 3: Shift the mix of research toward topics that add most value.

152. The current mix of research fails to adequately distinguish between topics where the marginal value of Fund research is particularly high, and others where Fund research adds little value to what goes on outside the Fund. For example, excellent research already takes place outside the Fund on topics such as the sustainability of the social security system in Europe.

153. There are, in particular, two areas in which the Fund has a strong comparative advantage in its research:

  • developing and transition country research for those countries for which there is a lack of good outside work (for instance, in Africa), and

  • cross-country research—research that draws policy-relevant lessons from cross-country comparisons based on in-depth knowledge of several countries.

154. We recommend that the Fund shift the mix of its research activities to incorporate more of these types of research, focusing on topics that are at the core of the Fund’s mandate.

155. Furthermore, recent developments have highlighted the need for the Fund to better understand the workings of the domestic financial sector in member countries and of the global financial system, given the important role of the IMF in ensuring the stability of the international monetary and financial system. We therefore recommend that an additional specific priority of Fund research be financial sector research. We observe that the Fund has recently been putting more resources into this activity. We encourage it to continue in this direction.

156. Management, department directors, and the Committee on Research Priorities should each take responsibility for ensuring that this shift to more developing and transition country, cross-country, and financial sector research occurs.16 Department directors can ensure that background research for Article IV consultations on a specific country that now appears in the “Selected Issues” paper included in some Article IV documents is restricted to cases where it provides substantial value added. Research on topics that are already adequately studied by academics or researchers in other policymaking institutions should not be undertaken. This implies that there could be fewer economists working on country-specific issues in industrial countries, who may then be able to be redeployed to other areas of the Fund where desirable research is not currently conducted.

157. The Committee on Research Priorities (discussed above) can encourage reallocation through its priority setting and project approval processes.

Recommendation 4 through 6 focus on providing a better incentive structure to promote high-quality research.

The fourth recommendation addresses the need to improve collaboration among departments (discussed in paragraphs 73–74) and to increase incentives for researchers in functional departments to be involved in the policy development process (discussed in paragraphs 104–108).

Recommendation 4: Create incentives to improve collaboration among departments and to encourage researchers to contribute to policy work.

158. Researchers, particularly those in the Research Department, need to be involved in policy work originating in other departments, not only to help improve the quality of this work, but to stimulate research ideas and to increase the relevance of their research. To achieve this, we recommend that the annual performance reviews for staff engaged in research should take into account whether a researcher has provided valuable service to other departments, based on input from these departments. Such services would include involvement in large-scale policy development projects, but also mission and review work.

159. Participation by functional department staff in policy development and mission work might be further enhanced by creating an informal and limited internal market for the services of functional department economists. We recommend that the Fund consider advertising requests for assistance for major policy development projects17 and mission work on the Fund’s internal website.18 Staff members with appropriate expertise would apply to be included in the project or mission, with the agreement of their department.

The fifth recommendation addresses the need to increase the incentives to conduct high-quality research (discussed in paragraphs 97–100).

Recommendation 5: Improve the assessment of research quality in the annual performance evaluation system.

160. The performance assessment for research staff needs to be based (more systematically than appears to be the case at present) on a serious assessment of the quality of their research, and not merely on the number of papers produced.

161. High-quality research at the Fund should be research that is relevant to the design of Fund policies, or adds to the stock of knowledge relevant for the Fund’s operations. Incentives to conduct high-quality research come from its recognition both within the Fund and outside it. The annual performance review for staff involved in research should therefore take into account the following internal and external signals of quality and relevance.

  • Is the research judged to have contributed significantly to the Fund’s mission?

  • Has the research been perceived to be of high quality by departmental management?

  • Has the research been directly useful in the operational work of the Fund?

  • Has the research been presented at a highly regarded conference or published in a high-quality academic journal or in one of the Fund’s official publication vehicles (i.e., excluding the Working Papers series)?19

  • Has the research been favorably received by the external review process (suggested later in this document)?

162. In departments whose primary focus is not research, department directors should consider appointing one staff member to assist departmental managers in evaluating the quality of the research activities of their staff.

The sixth recommendation addresses the need to increase accountability of staff involved in research, motivate them, and provide learning experiences for them (discussed in paragraph 102).

Recommendation 6: Give all staff, no matter how junior, opportunities to present their research products to management and the Executive Board.

163. Making presentations to management and the Executive Board is crucial to staff for their development into first-rate policy economists. It also helps to improve staff morale, which is important for retention of the best and brightest. Furthermore, those closest to a research product have the best understanding of it and so should be given the opportunity to present it. We recommend the following.

  • The Fund should adopt a convention that the primary author or authors of a research product should always be the ones to present it to management or the Executive Board (unless they opt not to do so). This includes both discussions of board papers on research topics, and individual items in the World Economic and Market Development presentations. Of course, a senior staff member should also be available at the presentation to support the department’s staff if needed.

  • As one example, we suggest that in the World Economic and Market Development presentations made to the Executive Board, the Director of Research should give an overall introduction, outlining the topics to be covered and presenting his or her assessment of Fund policies. This would be followed by individual presentations by staff, and then an informal question and answer period for each presentation. This structure has been extremely successful in public policy institutions in which some of the Committee members have been involved.20

The seventh recommendation addresses the need to ensure that a leader of the Research Department creates a culture that supports policy foundation and policy development research and engages the department in the policy development process (discussed in paragraphs 87–93).

Recommendation 7: Management should give a clear mandate to the Director of the Research Department to be both an active research leader and economic counselor to the Fund.

164. A Director of the Research Department plays two distinct roles in the organization, which in turn requires that he or she possess two equally important characteristics:

  • The Director of Research is the leader of the Fund researchers. To lead effectively, the Director needs to be actively engaged in the research process by creating an environment in which everybody, including the senior staff, is encouraged to express their views openly, considers it normal practice to attend seminars and comment on their colleagues’ research, and writes research papers as part of his or her job. Moreover, because the Committee on Research Priorities (described above) will normally be chaired by the Director of the Research Department, such a person will play a central role in the design of research projects throughout the Fund.

  • The Director of Research is the Fund’s Economic Counsellor, and as such is expected to be a source of independent advice to the Fund on policy issues, to be able to integrate the ideas of research staff into the design of Fund policies and operations, and to convey such ideas effectively to policymakers in the organization as well as outside.

The eighth and ninth recommendations focus on issues that have important effects on research activities but that also affect the organization as a whole.

The eighth recommendation addresses the need to improve the performance evaluation system and raise the accountability of staff (discussed in paragraphs 95–96 and in Box 2).

Recommendation 8: Create a more effective performance evaluation system.

165. The ability to discriminate between high and low performers is an essential feature of a performance evaluation process and of the award of merit increases in any well-managed organization. It is essential that poor performers be encouraged to leave the organization with a serious threat of termination.

166. The present performance evaluation system in the Fund—in which over 99 percent of staff economists are meeting or exceeding performance standards, and termination for poor performance is infrequent—clearly does not have the two essential features identified above. We understand that a review of the issues surrounding performance management is currently being conducted by the Office of Internal Audit and Inspection. We welcome this review and recommend that one outcome of this process should be a change in the performance evaluation system to incorporate the two essential features indicated in the paragraph above.

The ninth recommendation addresses the need to redesign the review process to both increase the effectiveness of researchers in this process and to make it more efficient (discussed in paragraphs 115–118).

Recommendation 9: For departments other than the Policy Development and Review Department, the Fund should consider how to reduce unnecessary internal review of Fund work and avoid formal written comments where informal communication would be adequate.

167. We are concerned that the review process is not operating as effectively as it could to bring insights from researchers in functional departments into the policy advice process. We also consider that the review process could operate more effectively with less time devoted to it. We understand that systematic studies of the review process are currently under way. We welcome these studies and would like to highlight the following issues for consideration in these studies.

  • Changes in the way review is conducted. As several staff members told us, the best exchange of ideas and constructive critiques of each others’ research in the Fund occurs in informal discussions over coffee or a meal in the cafeteria. The simple point is that a successful policy institution is one in which people spend a significant amount of their time discussing ideas with each other at the formative and preliminary stage of work rather than in writing comments on a piece of work, in its relatively final form, from behind closed doors.

  • We therefore consider that it would be more appropriate in the review process for a department to circulate an outline of its document (i.e., at an earlier stage of development than is presently the case) to other departments. The outline should include all key facts, figures, and preliminary conclusions. Departments should be invited, but not required, to make comments. Comments should be communicated informally (either orally or by e-mail), rather than by formal written memoranda (which is the current norm). Management should provide incentives in annual performance reviews to ensure that outlines are circulated at an early stage and that the department is prepared to discuss the documents openly with other departments.

  • In specific cases where Management thinks that more formal review is of crucial importance to the Fund, a seminar based on a draft outline should be the primary means of review. This brings researchers into the review process earlier (before positions are entrenched), and allows for better interaction between authors and reviewers than in the current written process.

  • The openness of a seminar is a more appropriate and productive way to bring comments from researchers to bear on important issues. It should also help reduce trivial comments because the person making them is more directly accountable. If a reviewer is unable to attend the seminar, he or she could still communicate his or her comments and suggestions verbally to those writing the paper/report.

  • If significant disagreements persist between departments, written comment could then be used to document differences and refer them to management.

  • A reduction in the amount of reviewing. Unless a department (other than the Policy Development and Review Department)21 has something of significant value to add, it should not make comments. The absence of comments by departments (other than the Policy Development and Review Department) should not be viewed as a sign that a department is not doing its job properly. Management should monitor departments’ progress in cutting out unnecessary review.

Supplementary Recommendations

168. The 13 supplementary recommendations below are designed to provide support for the 9 key organizational changes that we have recommended above. They are grouped into four categories: (1) changes in the culture, incentive structure, and accountability mechanisms; (2) changes to improve the dissemination of research; (3) changes in the allocation of resources in the organization to improve efficiency; and (4) establishment of an external review and monitoring process.

Changes in the Culture, Incentive Structure, and Accountability Mechanisms

Recommendation 10 addresses the need to encourage greater interaction with the outside world (discussed in paragraphs 82–86); Recommendation 11 addresses the need to increase morale and accountability of the junior staff by ensuring that only significant contributors are listed as authors on research products (discussed in paragraph 103); Recommendation 12 addresses the need to increase incentives for collaboration between the Fund and the World Bank (discussed in paragraphs 75–76); Recommendation 13 addresses the need to bring more flexibility into the hiring procedure for young economists suitable for the Research Department (discussed in paragraph 69); and Recommendation 14 addresses the need to reconsider the current management structure in the Research Department to improve efficiency and the environment for research (discussed in paragraph 123).

Recommendation 10: Encourage participation in relevant external conferences.

169. Participation by Fund researchers in external conferences is an important way of exposing them to outside ideas and having their research seen and critically examined by outsiders. Participation in relevant external research conferences needs to be further encouraged in the organization.

170. To encourage conference participation we recommend the following.

  • As a departmental objective, departments should explicitly allocate time to participate in conferences relevant to the Fund and ensure that their travel budget is sufficient to accommodate this.

  • Researchers should be allocated time to attend relevant conferences, particularly when they are asked to make a presentation or participate as a discussant. A high priority should be given to achieving this, so that operational responsibilities do not crowd out attendance.

  • Presentations and participation as a discussant in relevant conferences should be reflected in annual performance reviews and be rewarded.

  • The Committee on Research Priorities should be provided with an additional pool of resources to finance, at its discretion, conference participation in cases where the departmental travel budgets are exhausted.

  • Department directors should be held accountable by management for meeting conference attendance objectives.

Recommendation 11: Put only the names of significant contributors on Fund publications.

171. To improve morale of junior staff and increase accountability for the quality of their research product, we recommend that only the names of individuals who have made a significant contribution to the research should appear as authors on Fund publications and papers to the Executive Board. Staff whose contribution was limited to providing comments on a draft should not be deemed to have made a significant contribution. There should be no presumption that senior staff should be listed first on coauthored publications simply because of their seniority.

Recommendation 12: Improve collaboration between World Bank and Fund researchers.

172. There are large potential synergies between research activities at the World Bank and the IMF. In areas where both the Fund and the Bank have an interest in and conduct research on the same issues (for example, research on financial sector reform), collaboration could improve the quality of analysis in both institutions. In areas where one institution specializes and the other does not (for example, the World Bank in environmental issues, and the IMF in monetary policy), gains in efficiency could also be achieved by making use of each other’s expertise rather than trying to duplicate it.

173. Collaboration occurs naturally when researchers are encouraged to talk to each other. We recommend that new vehicles be created to encourage this process.

  • A joint weekly (or fortnightly) research seminar should be established by the Research Department in conjunction with their appropriate counterparts in the World Bank. The seminar would feature presentations by staff from both institutions or presentations by outside experts whose research is relevant to both institutions.

  • The World Bank and the Fund might also consider jointly running an annual research conference, organized on the Fund side by the Committee on Research Priorities, in which prominent academics and staff members from both institutions participate. An annual event along the lines of the National Bureau of Economic Research (NBER) Macroeconomic Annual Conference would go a long way toward improving the morale of Fund researchers and enhancing the reputation of the Fund and the Bank.

Recommendation 13: Introduce more flexibility into the hiring procedure for entry-level economists.

174. Attracting the best young researchers is particularly important to the Research Department, which differs from other departments in that research is a large component of an economist’s job in the Research Department. The hiring policies for entry-level economists must be flexible enough to ensure that economists with strong research skills can be hired for the Research Department.22

175. We recommend the following.

  • The pool of candidates selected for the second round of interviews in the Economist Program should include some candidates with strong research interests.

  • The Fund should make a commitment to some of those candidates who wish to work in the Research Department (and are suitable for the Department) that they will be placed in the Research Department after their successful completion of two years in the Economist Program. (This appears to be critical to attracting some of the best young researchers.)

  • Candidates with strong research interests who are interested in a commitment to being placed in the Research Department should be required to present their research at a seminar as part of their interview process, and the opinions of active researchers should be solicited and taken into account in the hiring decision.

Recommendation 14: Consider streamlining the management structure in the Research Department.

176. Multiple layers of management can stifle creativity as well as result in substantial inefficiencies. Successful research operations have a relatively nonhierarchical management structure. Adopting a structure with less reporting layers has become more common in public policy organizations, and may enhance the effectiveness of the Research Department.23 We therefore recommend that the Research Department consider alternatives to the current management structure as a means of increasing collegiality in the Department, enhancing intellectual exchanges, and making efficiency gains.24

Changes to Improve the Dissemination of Research

Operational staff and management are often too busy to read all research output, particularly long papers, and select that which is most relevant to their needs.

Authors of research, and the Fund as a whole, need to think about ways to make research more accessible in order to ensure its absorption into policy work. Recommendations 15 and 16 address the need to disseminate research effectively around the Fund (discussed in paragraph 126); and Recommendation 17 addresses the need to provide additional opportunities for young staff to make presentations to the Executive Board, thereby increasing accountability and motivation (discussed in paragraph 102).

Recommendation 15: Write and disseminate nontechnical summaries of highest quality and most relevant research.

177. In order to more effectively disseminate research ideas throughout the institution we recommend the following.

  • The Front Office in each department should, on a periodic basis, select a fraction of research papers (Working Papers, Policy Discussion Papers, Occasional Papers, papers submitted to outside journals) with interesting and/or relevant conclusions, and require that these be summarized by the authors. These summaries should be written for a nontechnical audience, making them accessible to educated laypersons (along the lines of the Economic Focus section in the Economist magazine). They should be more substantial than current abstracts, but short enough for busy people to readily absorb the key facts and conclusions—probably less than five pages.

  • These summaries should be disseminated to all departments and to individual members of the Executive Board or management if they so choose.

  • Assistance from the editorial/writing unit of the External Relations Department should be made available to assist staff in writing these nontechnical summaries.

Recommendation 16: Treat Working Papers as preliminary.

178. The purpose of issuing Working Papers should be primarily to stimulate discussion with other researchers. To ensure that Working Papers are treated as preliminary, and not end products of research nor representative of Fund views, we recommend that the Fund put more distance between its official views and the views expressed in Working Papers.

  • Working Papers should no longer be authorized for distribution by Front Offices or division chiefs, which is sometimes interpreted as suggesting that they have been approved by the Fund.

  • The following sentence should be added to the current disclaimer: “This Working Paper is preliminary and is for discussion purposes only.”

  • Working Papers should only be minimally screened for quality but should be screened by the External Relations Department, with the assistance of the department where the Working Paper originated, prior to release for confidentiality issues and problematic language.

Recommendation 17: Create a new vehicle for nonsenior staff to make presentations to Management and the Executive Board.

179. The Executive Board should have more face-to-face exposure to good Fund research. We recommend that periodically, perhaps four times a year, a Board meeting be scheduled at which staff make presentations of their research work. (In our committee’s experience, four presentations per meeting should be the maximum.) The topics for presentation could be chosen by the Executive Directors themselves, or by the Committee on Research Priorities. The Board meeting would be informal and would not require formal Board papers.

180. We understand that the Executive Board is already under significant time pressure, and that adding these additional meetings will create even further pressure. However, these meetings should be an important priority for the Executive Board because they will help the Board to provide input into the priorities for future research. They are also a more effective and efficient way of disseminating research to Executive Directors than the current system of providing them with Working Papers, and they will help send a signal to staff that research is valued in the Fund.

To successfully disseminate research outside the Fund, the Fund must have a coherent dissemination strategy, and researchers themselves must be involved in thinking about who their target audience is and how best to reach it. Recommendation 18 addresses the need for the Fund to enhance the reputation among policymakers and the public in member countries (discussed in paragraphs 132–35).

Recommendation 18: Improve dissemination of research to nontechnical audiences outside the Fund.

181. Improving the dissemination of the Fund’s expertise and research to nontechnical audiences outside of the institution is of great value in developing a constituency for the Fund’s work. It is important to ensure that nontechnical outsiders have access to appropriate publications, and that there is a coherent strategy for dissemination of these publications (on this latter point, the purpose and status of the current set of publications seems to generate some confusion).

182. We understand that the strategy behind the Fund’s nontechnical publications is currently being looked at by external consultants as part of a wider review of the Fund’s external communications strategy. If the review does not consider this issue in sufficient depth, we recommend that a more careful review take place, which considers the following issues.

  • The overall dissemination strategy, including whether there are too many publication vehicles.

  • Publication vehicles that have been successful in other public policy institutions. For example, if the changed orientation of the IMF Staff Papers journal is not sufficient for communicating to policymakers and the general public, the Fund might consider creating a separate policy journal. Such a journal must be set up with a serious peer review process and might even make use of prominent outside experts.

  • The wider issue of greater researcher involvement in some nontechnical external publications. Currently, the impetus behind two nontechnical publications—Finance and Development and the Economic Issues series—comes largely from the External Relations Department. We believe researchers themselves should be more actively engaged in the process:

    • (a) The External Relations Department should consult with the Committee on Research Priorities as to what research products might be appropriate for the nontechnical publications. When this research is written for these publications, the author of the original research should be responsible for writing up a nontechnical version of the original research with assistance from the External Relations Department.

    • (b) Researchers should be encouraged to submit work to appear in these nontechnical publications. Researchers should be given incentives to have their work published in these vehicles by receiving credit for these publications in their annual performance reviews and merit increases.

183. An additional advantage of engaging research staff in writing these nontechnical papers is that it will improve their ability to communicate with noneconomists. This will help them to become better policy economists.

Changes in the Allocation of Resources to Free Up Staff Time

Recommendation 19 addresses the need to create more time for economists to focus on research issues by increasing the number of research assistants (discussed in paragraphs 112–14).

Recommendation 19: Increase the number of research assistants relative to economists.

184. The lack of research assistants reduces the productivity of researchers in the Fund. The Fund has recently implemented changes to increase the number of research assistants and change the mix. We welcome these changes and encourage acceleration of the rate of change. We recommend that the Fund further increase (substantially) the number of research assistants in the organization. New hires should primarily be young college graduates with a relevant background, hired on fixed-term, nonrenewable contracts. This will increase the Fund’s head-count, but should reduce the need for economist staff, and therefore could be operated in such a way as to ensure it is roughly budget neutral. (For example, one economist could be traded off for, say, three research assistants.)25

185. Increasing the number of research assistants, and paying for it by reducing the number of economists, is likely to increase the overall efficiency of the research process.

Establishment of External Review and Monitoring Processes

Recommendations 20–22 address the need to open up the Fund to ideas from the outside world (discussed in paragraphs 82–86) and to increase accountability of the Fund’s research through the establishment of external review and monitoring processes.

Recommendation 20: Create an ongoing external review process for research products.

186. External review of research products has two important benefits. First, by opening up Fund research to outside scrutiny, it makes it more likely that that Fund research will incorporate the latest ideas and developments from outside, thereby preventing insularity. Second, external review will increase the accountability of Fund researchers, particularly if the results of the review are made public.

187. We recommend the following.

  • On an annual basis, the Fund should contract with outside experts, including academics, to read and comment on the individual products of the research projects that have been approved by the Committee on Research Priorities. These comments should then be published on the Fund’s external website and used by the Committee on Research Priorities and Management to analyze the success of research projects.

  • The Committee on Research Priorities might also contract to have a selection of other research products from throughout the organization subjected to external review.

Recommendation 21: Monitor progress on implementing the recommendations in this report.

188. To ensure the effective implementation of those recommendations that the Executive Board approves, the Board needs to monitor the progress of implementation. We recommend that one year from the date of this report, a follow-up report by management and staff, perhaps with the input of an independent external advisor, be submitted to the Board for discussion. At that time the Board can assess whether progress on these recommendations has been sufficient and what further steps need to be taken to improve the research process.

Recommendation 22: Create periodic, general, external reviews of research activities.

189. Although an external review of research products along the lines of our Recommendation 20 will increase the accountability of Fund research, it will, of necessity, be narrowly focused on individual research products. A more general external review should help the Fund evaluate whether the research process is being managed properly, whether the resources devoted to research are appropriate and whether research activities serve the operational needs of the Fund. We recommend that the Executive Board commit to another external review of research activities within five years. This should be part of an ongoing, regular process of external reviews, both of research and of the Fund’s other major activities.

Annex I Terms of Reference

December 4, 1998

1. Purpose of the Evaluation

The Executive Board of the International Monetary Fund has decided to request an independent external evaluation of the Fund’s economic research activities. The purpose of the evaluation is to assess whether economic research in the IMF contributes effectively to the achievement of the Fund’s objectives. For this purpose, the evaluation will assess the appropriateness of the present scale and organization of research activities, the way in which the level of resources and economic research programs are chosen, and how they relate to the overall work of the Fund. The evaluation will also seek to assess the quality and the added value of different aspects of the Fund’s economic research and to appraise its utility in the Fund, among its member countries, and within the wider economics community.

2. Focus of the Evaluation

The evaluation will focus on all aspects of the Fund’s economic research activities and will be carried out by three independent external experts, as indicated in Section 3 below. The experts are requested to consider five broad topics in their evaluation.

  • The definition of economic research in the Fund. The boundaries between research and operational work are not clear-cut since much of the staff’s regular work on surveillance and the use of Fund resources involves elements of research.

  • The objectives of the Fund’s economic research activities. Why does the Fund do research? Have the reasons changed over time? Are the current objectives the right ones? How might the objectives of the Fund’s research activities evolve over the medium term?

  • The organization of the Fund’s economic research activities. How are decisions made about the topics for research and the resources devoted to research and how are these related to the work program? How best should research work relate to operational work in the Fund? Is the present distribution of research time across departments the most appropriate?

  • The agenda and focus of the Fund’s economic research. What is the value added by the Fund’s own research activities, both within the Fund and externally? What should determine whether the Fund (rather than the academic community or other international institutions) undertakes specific research and how deeply? Does the research utilize effectively the wealth of information to which the Fund has access? Is there an appropriate balance in the Fund between research in theoretical economics and research on more operational topics? Should more resources be allocated to one or the other?

  • The influence of the Fund’s economic research. To what extent does the Fund’s research influence its policymaking and operational work? How is the quality of Fund research perceived by relevant interested parties and to what extent does it have influence in Fund member countries, in other international institutions, and within the academic community? What is the best way of publicizing the research (the role of conferences and seminars; the role of the publications concerning the World Economic Outlook and International Capital Markets report; the role of Staff Papers; the accessibility of Working Papers; etc.)?

In focusing on the above topics, the experts may wish to be aware of the following more specific questions that are of interest to Executive Directors:

  • (i) What incentives do Fund staff have for working on economic research? Is freedom of research preserved?

  • (ii) Are there any major areas of research at present undertaken by the staff whose value added could be regarded as insufficient? Are there major omissions in the Fund’s research agenda?

  • (iii) How useful is the visiting scholar program? Should research agendas be coordinated with other entities? Could more research be done in partnership with others or be contracted out?

  • (iv) How important is it for Fund staff to continue undertaking theoretical and applied research as a means of maintaining their human capital? In seeking to enhance the human capital of staff, does the Fund provide an appropriate mix of opportunities to its staff to receive training and to do research work?

  • (v) What internal or external mechanisms exist, or should exist, for ongoing evaluation of Fund economic research activities?

3. Evaluators and their Independence

Professors Francesco Giavazzi, Frederic S. Mishkin, and T.N. Srinivasan have agreed to conduct the evaluation and to submit a joint report; Professor Mishkin will serve as chair. They shall conduct their work freely and objectively and shall render impartial judgment and make recommendations to the best of their professional abilities. At their full discretion, the evaluators may wish to take into account the views of member country authorities, academic experts, representatives of other international organizations, and Fund Executive Directors and staff.

4. Access to Confidential Information and Protection of Confidentiality

  • The evaluators shall have access to information in possession of the Fund as needed for carrying out the evaluation. This may include, but will not necessarily be limited to, access to staff reports and other publications, internal memoranda and studies, existing databases, relevant communications with management, as well as minutes of Executive Board proceedings. The Chairman of the Evaluation Group of Executive Directors (Evaluation Group) shall make all necessary arrangements to facilitate and assist the procurement by the evaluators of relevant information in possession of the Fund.

  • The evaluators undertake not to disclose, deliver, or use for personal gain or for the benefit of any person or entity without the consent of the IMF, any restricted or confidential information in possession of the Fund that they receive in the course of the evaluation. The Chairman of the Evaluation Group will request an appropriate officer of the Fund to review the draft evaluation report with the purpose of pointing out to the evaluators any inadvertent disclosure of restricted or confidential information.

  • The evaluators are free to request information from country authorities and other sources outside the Fund as deemed appropriate.

5. Evaluation Report: Publication, Executive Board Consideration, and Comments

  • The Fund reserves the exclusive right to publish the report, and the evaluators undertake not to publish any part of the report separately.

  • In accordance with generally accepted practices for the conduct of audits and evaluations, the Chairman of the Evaluation Group will ensure that those whose actions and advice are the subject of evaluation shall have the opportunity to respond to relevant parts of the evaluation report in draft form, as well as in final form. The evaluators are free to take account of, or ignore, any comments on the draft evaluation report.

  • Comments on the final evaluation report shall be considered part of the official record. If the Executive Board decides to make public the final evaluation report, it may also decide to make public the comments thereon, including the conclusions of the Executive Board consideration of the report.

6. Resources and Timing

The budget for the external evaluation of the Fund’s economic research activities shall not exceed US$220,000 (excluding any support from Executive Directors or Fund staff that might be requested by the evaluators); within this total, and in consultation with the Chairman of the Evaluation Group, the evaluators may arrange for research assistance support. The Chairman of the Evaluation Group will make arrangements to assist with any logistical or liaison support from Executive Directors or Fund staff requested by the evaluators.

The evaluators shall be provided with a contract for contractual employment, on terms and conditions approved by the Chairman of the Evaluation Group. The “Terms of Reference of the External Evaluation of the Fund’s Economic Research Activities,” dated December 4, 1998, shall be attached to the contract and acceptance of the contract by the evaluators shall also mean acceptance of the “Terms of Reference.” The contract will expire with delivery of the evaluation report and its consideration by the Executive Board, or if the Executive Board determines that the contract should be terminated for other reasons.

The evaluators will begin work in January 1999; completion of the evaluation report is expected for July 1999. The evaluators will keep the Chairman of the Evaluation Group informed of the progress of the work.

Annex II Nature and Organization of Economic Research in the Fund

How Is the Fund Organized?

1. The IMF has nearly 2,700 staff, of which approximately 1,100 are professional economists.26Annex 4 sets out the Fund’s organizational structure. There are 6 area departments, 8 functional and special services departments, and 12 information, liaison, and support departments. Most economists work in area departments and functional and special services departments.

2. Each department has a “Front” or “Immediate” Office, and several divisions. Staff in the Front Office include the head of the department (called a Director), between 5 and 15 managerial-level staff, and several support staff. The Front Office supervises and coordinates the work of the department. Each division within the department is led by either a “Division Chief or an Assistant Director” (depending on seniority) and contains around 6 to 10 economists. It may also contain a research assistant (in functional departments). Each division deals with a subset of the issues/countries covered by the department. Area departments are primarily responsible for monitoring and assessing economic developments in member countries in the region. For example, the African Department monitors and analyzes economic developments in the Fund’s 44 African member countries and in the region as a whole.

3. Functional and special services departments contribute to the Fund’s monitoring and analysis of developments in member countries, but they are organized around issues or functions rather than countries, and they also monitor and analyze developments in the international monetary system as a whole. For example, the Fiscal Affairs Department specializes in fiscal policy and fiscal institutions; and the Monetary and Exchange Affairs Department specializes in monetary policy, monetary and financial institutions, and exchange rate policy.

4. The Policy Development and Review Department has a particularly important role in the organization. It reviews and approves many of the documents originating in area departments to ensure that the work produced is consistent with the Fund’s overall approach, and that inconsistencies do not occur between the advice given to one member country and the advice given to another. As the name suggests, the Department also develops overall policies for the organization. For example, the recently introduced Contingent Credit Line was designed by the Policy Development and Review Department.

5. The Research Department is also classified as a functional department. Its role is discussed further below.

6. Economic research, as we have defined it at the beginning of Section II, is conducted to a greater or lesser extent in all the area departments and functional and special services departments in the Fund.

What Are the Objectives of Economic Research in the Fund?

7. Although not specifically referred to in the Articles of Agreement, research is conducted by the Fund to help it achieve the “Purposes” stated in the Articles of Agreement, particularly the first purpose:

  • To promote international monetary cooperation through a permanent institution which provides the machinery for consultation and collaboration on international monetary problems.27

8. The objectives of research undertaken in the Fund were most recently specified explicitly in the 1993 Review of Research Activities in the Fund:

  • The main objectives of research in the Fund are to further the staff’s understanding of policy and operational issues of relevance to the institution, and to improve the analytical quality of work prepared for management and the Executive Board, and of the advice provided to member countries. Different departments have differing objectives, depending on their particular institutional responsibilities. Generally speaking, the research programs of area departments are oriented toward country-specific and regional issues and seek to: (1) deepen the staff’s understanding of country situations for purposes of surveillance and the formulation of programs supported by the Fund; (2) strengthen the analytical basis for policy advice provided to country authorities; (3) assist the authorities in developing their analytical and policymaking capacities; and (4) disseminate the staff’s experience with policy approaches to economic problems and issues.

  • As functional departments have a greater diversity of interests and responsibilities, their research programs are more varied. These departments engage in research so as to: (1) improve surveillance of developments in the international monetary and financial systems, and in the world economic situation; (2) strengthen the analysis related to the design of adjustment and reform programs; (3) improve technical assistance provided to countries; (4) support the development and implementation of the Fund’s financial policies and operations; and (5) provide a set of up-to-date international statistical standards, as well as guidance on the statistical treatment of new issues and priorities in statistics.28

What Type of Research Is Done in the Fund?

9. As the discussion above suggests, decisions about what research should be undertaken are largely decentralized. Most research projects are initiated and designed at the departmental level. The 1993 Review noted that “this allows resources to be directed toward the most important policy and operational problems confronting each department.”29

10. Area departments tend to undertake mainly research that we have defined at the beginning of Section II as policy analysis research. This is consistent with the objectives for area department research stated above. That is, the research is mainly concerned with deepening the staff’s understanding of country situations and strengthening the analytical basis for policy advice in surveillance and program formulation. Some policy development research is also conducted in area departments. This is consistent with the objective of disseminating the staff’s experience with policy approaches to economic problems and issues.

11. Functional and special services departments, particularly the Monetary and Exchange Affairs Department and the Fiscal Affairs Department, undertake a mix of policy analysis, policy development, and policy foundation research. The Statistics Department and the Treasurer’s Department undertake very little economic research (the Statistics Department does, however, undertake specialized research in statistical methodology). The Policy Development and Review Department conducts mainly policy development research, such as the recent “IMF-Supported Programs in Indonesia, Korea, and Thailand: A Preliminary Assessment.” The research conducted in the Research Department is discussed separately below.

12. In order to get a ballpark idea of the total amount of research conducted in the Fund, the type of research conducted, and the distribution of that research between departments, we have constructed a historical list of research output of the Fund over the last four years, and classified the research in various ways.30

13. Tables 1 to 5 at the end of this annex set out:

  • research by country specificity (country-specific, cross-country, non-country-specific, or not classified) (Table 1);

  • research output by type of country (Table 2);

  • research output by department (Table 3);

  • research output by topic31 (Table 4); and

  • research by document type and department (Table 5).

Table 1.Research Products of the IMF by Country Specificity, 1995–98
1995199619971998All Years
Research specific to:
Not classified961622
Table 2.Research Products of the IMF by Type of Country, 1995–98
Country Type1995199619971998All Years
Relevant to all countries1037081107361
Other industrial countries759985106365
Transition economies62504660218
Developing countries122104120168514
Not specified851216
Note: Numbers in columns may not add to coral at bottom of column because some research was relevant to more than one type of country grouping.
Note: Numbers in columns may not add to coral at bottom of column because some research was relevant to more than one type of country grouping.
Table 3.Research Products of the IMF by Department, 1995–98
Department11995199619971998All YearsPercent of Total
Area departments165174.5161225.4372647
Africa (135)182313.520.474.95
Asia-Pacific (98)25.5303091.5177.011
European I (86)8683.56458.5292.019
European II (75)812.51117.549.03
Middle Eastern (59)13.515.52115.565.54
Western Hemisphere (103)141021.522.067.54
Functional and special services departments237173.5186216.3781352
Fiscal Affairs (98)3I.529.033.024.8118.38
IMF Institute (42)
Internal Audit and Inspection00.
Monetary and Exchange Affairs (68)3737.542.839.7157.010
Office of the Managing Director01.001.32.30
Policy Development and Review (103)3321.715.310.580.55
Research (67)123.574.577.3116.2391.625
Statistics (79)
Treasurer’s (63)
Geneva Office1120

Number of permanent: staff members in grades A11-B5, including resident representatives, is shown in parentheses.

Notes: Joint research was apportioned evenly among the departments involved.The large increases in research output in the Asia and Pacific Department and the Research Department in 1998 probably reflect a more complete list of research in the two departments in 1993 than in earlier years, as these departments specifically sent us a list of their 1993 research outputs, whereas the information for earlier years was obtained from other sources.

Number of permanent: staff members in grades A11-B5, including resident representatives, is shown in parentheses.

Notes: Joint research was apportioned evenly among the departments involved.The large increases in research output in the Asia and Pacific Department and the Research Department in 1998 probably reflect a more complete list of research in the two departments in 1993 than in earlier years, as these departments specifically sent us a list of their 1993 research outputs, whereas the information for earlier years was obtained from other sources.
Table 4.Research Products of the IMF by Research Topic, 1995–98
Topic1995199619971998All Years
International monetary system24263542127
International capital markets and official financing61616696284
Inflation and inflation stabilization2123193194
Growth and structural issues133127122129511
Development economics50361635137
Economies in transition53302722132
Fiscal issues68626163254
Monetary and financial sector issues39333733142
Exchange rate behavior33182634111
Fund financial policies21134543
Statistical issues1273426
Note: Numbers in columns may not add to total at bottom of column because some research fits into more than one topic category.
Note: Numbers in columns may not add to total at bottom of column because some research fits into more than one topic category.
Table 5.Research Products of the IMF by Document Type and Department, 1995–98
DepartmentWorking paperIMF Staff PapersOccasional PaperPPAAStaff MemorandumOther Fund PublicationOutside PublicationPublished1Mimeo2
Area departments22326401625887630118
European I567742191417
European II314752155
Middle Eastern3917292915
Western Hemisphere234191114
Functional and special services4576746261966763684
Fiscal Affairs776893101126
IMF Institute1812353
Internal Audit and Inspection1
Monetary and Exchange Affairs74511831351525
Office of the Managing Director311
Policy Development and Review2811341015512
Geneva Office4

Not specified where.

Or not enough information to categorize.

Note: Staff Memoranda are predominantly Selected Issues documents associated with Article IV consultations. The table counts every individual piece of research in a Staff Memorandum as a separate Staff Memorandum for the purposes of the table, even though one Staff Memorandum may, in feet, contain several pieces of research.

Not specified where.

Or not enough information to categorize.

Note: Staff Memoranda are predominantly Selected Issues documents associated with Article IV consultations. The table counts every individual piece of research in a Staff Memorandum as a separate Staff Memorandum for the purposes of the table, even though one Staff Memorandum may, in feet, contain several pieces of research.

How Much of the Fund’s Resources Are Allocated to Research?

14. It is difficult to estimate the total amount of resources dedicated to research in the Fund. The Fund’s Budget Reporting System does not record “research” as a separately defined output, partly because different types of research are conducted in the Fund (for example, the research associated with surveillance work is classified as “surveillance”). Furthermore, the value of research depends not only on how much time is available for research, but also on the time that the researcher has taken to convey the ideas in the research to others in the organization (through informal conversations, meetings, follow-up memos, etc.) and from the time that nonresearchers have taken to absorb the results of research that is conducted both within the Fund and outside it. Time spent on these activities is very difficult to quantify.

How Do Individual Departments Allocate Resources to Research?

15. The process by which resources are allocated to research varies among departments. In general, in area departments, research is planned at the division level as part of the annual Article IV consultation process (whereby a team of Fund economists visit each Fund member, generally annually, to discuss the country’s economic policies with government officials and others in the member country and make an assessment and policy recommendations). Research tends to be undertaken on countries that do not have economic programs supported by the IMF (a program is the set of measures agreed to by the member country in conjunction with the use of the Fund’s financial resources), as program divisions find their time and resources consumed by mission travel and program work. Some departments say they have a “wish list” of research projects that they would like to do, but frequently operational demands crowd out time for research.

16. The Asia and Pacific Department has experimented with setting up a small group of staff who have been given significantly reduced operational responsibilities so that they have time to do research on important issues relevant to the Asia-Pacific region. Some of the topics for this research come from discussions in the Front Office. Other topics are chosen by the staff themselves.

17. People we spoke to in some of the functional departments described research as the residual in their departments’ budget allocation process. Demand- driven operational work such as technical assistance, mission work, and review work takes priority, and remaining time is allocated to research and other activities (training, etc.). In general, some research topics are directed from the Front Office and others are chosen by individual economists, in consultation with their division chief.

18. Several departments also set money aside to bring in visiting scholars to work on projects of interest to the Fund and interact with Fund staff. The size of the visiting scholars program, and the way it operates, varies by department.

What Is the Role of the Research Department?

19. As can be seen from Table 5 at the end of this annex, the Research Department conducts about 25 percent of the total research produced by the Fund in volume.32 Given its prominent role in the Fund’s research activities, we describe it separately here.

20. The Department has a Front Office (consisting of 7 managerial staff and 15 other staff) and 6 divisions: Capital Markets and Financial Studies, Commodities and Special Issues, Developing Country Studies, Economic Modeling and External Adjustment, Emerging Market Studies, and World Economic Outlook. Around 70 professional economist staff work in the department, supported by around 23 research officer/assistants and 5 specialized technical vendors. The Director of the Research Department is known as the Fund’s Economic Counselor. This role requires the Director to be a source of independent advice to the Fund on current policy issues and the design of Fund policies and operations, and to convey such ideas to policymakers in the organization as well as outside.

21. The Department has several key (somewhat overlapping) functions:

  • to conduct research on issues relevant to the Fund;

  • to input into the analysis and design of Fund policy advice to member countries (through participation on missions and review of other departments’ work);

  • to prepare the World Economic Outlook, including coordination of the interdepartmental forecasting exercise; and

  • to prepare the International Capital Markets report.

22. The Department also prepares notes and presentations on the current state of the world economy and key international economic and financial issues for the Executive Board and various other audiences such as the G-7 and APEC.

23. The Department has provided a rough estimate of the breakdown of its professional economists’ time (for the Department as a whole) in FY1998/99 as follows:

10.5%Research for and preparation of the World Economic Outlook
17%Research for and preparation of the International Capital Markets report and resources allocated to the global markets unit
7.5%Reviewing the work of other departments
4%Article IV and use of Fund resources, missions, and mission-related research
2.5%Preparation of G-7 notes, Coordinating Group on Exchange Rate (CGER) exercises, and briefings for other meetings
2%Research for papers designed for presentation to the Executive Board (for example, the 1998 board paper on Early Warning Systems)
35%Other research
21.5%Other activities (predominantly managerial supervision and training)

24. The Department notes that the figure for “other research” is probably overestimated as it is calculated as a residual, and probably includes other activities (including, possibly, research for the World Economic Outlook).

25. The research output of the Department covers a wide range of topics. Research output reflects both directed research (topics chosen by departmental management), and nondirected research (topics chosen by individual researchers):

  • Fully directed research. This generally takes the form of papers written for the Executive Board. The Economic Counselor, in consultation with management, decides what papers will be prepared for the Executive Board. These generally stem from requests from the Executive Board for research on certain issues or discussion that the Economic Counselor has observed in the Executive Board where he thinks that a research paper could add depth to the Executive Board’s discussions. These papers (such as the recent papers on Hedge Funds, the Coordinating Group on Exchange Rate framework for estimating equilibrium exchange rates, and the role of Early Warning Systems in anticipating balance of payments crises) are generally a mix of literature review and new thinking by the Department.

  • Semidirected research. As part of the process of preparing the World Economic Outlook and the International Capital Markets report, the Front Office generates a broad set of topics/themes for each report. Individual researchers can develop their own specific research proposals within these topics/themes, and discuss and agree on them with the Front Office. Research may also be conducted by mutual agreement with an area department that requests the services of someone on the Research Department staff to conduct a piece of country-specific research.33

  • Nondirected research. When not otherwise engaged in review work, mission activities, other operational activities or directed research, staff are able to work on subjects of their own choosing, typically in consultation with their managers, subject to the constraint that the work must have some relevance to the Fund’s mission. This generates a broad range of research. Some young staff continue to explore their thesis topics. Others work on topics relevant to the division they are in that they have either identified individually or in conjunction with their managers.

Does a Mechanism Exist for Coordinating Research Between Departments and/or Identifying High-Priority Research?

26. The Working Group on Fund Policy Advice (WGFPA) was set up in 1989 to “serve as a forum for identifying country related, analytical and policy issues and strengthening research collaboration on these issues so as to enhance the effectiveness of Fund policy advice.”34 This was an attempt to bring some centralization to the otherwise decentralized process of conducting research.

27. The Working Group on Fund Policy Advice meets several times a year (historically, between two and seven times). It is responsible for maintaining and disseminating a database of all ongoing and planned research projects across the Fund and ensuring that there is no overlap between projects. (The list of ongoing projects can be found on the internal website (, and a similar list, edited to remove confidential research, appears on the Fund’s external website (

28. The Working Group on Fund Policy Advice is also responsible for taking a Fund-wide perspective on the key issues on which the Fund needs to do research and compiling a list of projects of Fund-wide interest that should be undertaken. Its terms of reference specifically refer to “analytical and empirical issues that arise in individual country cases which have wider implications” and “special studies … to evaluate and draw lessons from the Fund’s experience in providing policy advice to its members….”

29. Once a year, a meeting is devoted to identifying these priority projects. Each member comes to the meeting with a list of projects that his/her department intends to undertake or thinks should be undertaken. Other members of the group may indicate their own department’s willingness to participate. Individual members also make suggestions outside of the departmental list, and a list of suggestions made by Executive Directors in the course of Board meetings is also discussed.

30. A complete list is then compiled, based on departments’ willingness to undertake the projects, and sent to the First Deputy Managing Director, who agrees to or amends the project list and may offer additional suggestions. In FY1997/98 the Working Group identified eight such research projects, including The Implementation of Monetary Policy in Dollarized Economies, which was presented at an Executive Board seminar, and Exit Strategies—Policy Options for Countries Seeking Greater Exchange Rate Flexibility, which was presented to the Executive Board. Both papers have been published in the Occasional Papers series. In FY1998/99, 17 projects were identified.

31. The 1989 terms of reference for the Working Group on Fund Policy Advice also specified that the group should receive, from the Research Department:

  • “reports on its agenda in the area of the design of economic policy, particularly relating to the developing countries” and

  • “periodic reports on the implications of its research work for practical policy issues.”

32. There does not appear to have been any specific reporting on these issues in the history of the group.

What Role Does the Executive Board Play in the Research Process?

33. The Executive Board has an indirect role in shaping the research agenda of the Fund. The Board influences the research conducted in the Fund in four ways:

  • (1) During Board meetings, Board members may make suggestions for research that they think would be useful for the Fund to conduct. The Board Secretary makes a note of the suggestions of Executive Directors, and these suggestions feed into the deliberations of the Working Group on Fund Policy Advice (discussed above).

  • (2) Issues discussed in the Board may spark research ideas in individual staff members who are attending the Board meetings.

  • (3) Executive Directors, on behalf of the countries they represent, can suggest research ideas to mission chiefs in advance of Article IV missions to their constituency countries.

  • (4) Department directors and the management decide on what research products (outside of Article IV-related Selected Issues research) they think should be produced for presentation to the Executive Board. These are included in the twice yearly forward-looking Work Program of the Executive Board (the Work Program is a list of the items that management proposes for consideration by the Executive Board in Board meetings in the six months ahead. The list of items includes Article IV reports, internal management issues, general policy issues, etc., which are predictable in advance). Directors consider the Work Program in a Board meeting, and may seek to add or delete items from the list, including specific pieces of research.

34. The World Economic Outlook and the International Capital Markets report are always presented to the Board in draft form (i.e., additional changes can be made after the Board meeting). Other individual pieces of research presented vary from year to year. In 1998, for example, the Board considered a paper on “Hedge Funds and Financial Market Dynamics” and another on “Experience with Disinflation and Growth in the Transition Economies.” Some of these research pieces are designed mainly to inform the Board rather than to drive Fund policy (e.g., “Hedge Funds”). Others are not research pieces in themselves, but policy development papers that are based upon research (e.g., “Involving the Private Sector in Forestalling and Resolving Financial Crises”).

35. Members of the Executive Board also receive copies of all of the Fund’s research output.

How Is Research Disseminated Inside and Outside the Fund?

36. Not all research conducted in the Fund is disseminated externally. Some feeds into Board papers on policy development (for example, the research component of the policy development process surrounding the Contingent Credit Line), most of which are not made public. Other pieces of research are circulated internally in the form of Internal Memoranda. For example, in 1998, the Policy Development and Review Department issued several memos including “Aid in Fund Programs: Preliminary Considerations” (a note on analytical issues related to treatment of aid in Fund-supported programs), and, in conjunction with the Research Department, “Asian Crisis Countries: Exchange Rate Assessments” (a note presenting a first cut at exchange rate assessments for Indonesia, Korea, and Thailand).

37. Research that is disseminated externally as well as internally is published in several forms:

  • IMF Survey. This is a 16-page newsletter-type publication issued 23 times a year. It contains short, nontechnical articles on recent IMF research and policy analysis and articles on current events at the IMF. It is automatically distributed to university libraries, university professors, government agencies, international agencies, and financial writers, and is available by subscription and on the Fund’s website.

  • Finance & Development. This is a free, nontechnical quarterly magazine for policymakers, academics, economic practitioners, and others who are interested in the work of the IMF and current economic issues. The publication includes articles reviewing the analysis and activities of the IMF. Articles are about four pages in length. Some of them draw on more technical Fund publications such as Working Papers. Some are written by guest authors. The magazine also contains book reviews on current topical publications. Issues are also available on the Fund’s website.

  • IMF Staff Papers. This is the Fund’s in-house economic journal aimed at the academic community. It is published quarterly and contains theoretical and empirical analyses of various macroeconomic and structural issues. Beginning with the March 1999 issue, copies are also available on the Fund’s website.

  • World Economic and Financial Surveys. The semiannual World Economic Outlook (WEO) and the annual International Capital Markets report are the two anchor publications in this publication series, but other individual studies covering monetary and financial issues of importance to the world economy are also included in the series (e.g., Toward a Framework for Financial Stability, 1998). This series is widely distributed to member governments, academia, business, media, and international organizations. (The WEO and the International Capital Markets report are also available on the Fund’s website.)

  • IMF Staff Country Reports. These reports contain background material and research on economic developments and trends in individual IMF member countries. They are background documents prepared in the context of the periodic consultation with member countries. Not all member countries permit the release of background documents. The research content in country reports varies by report. These reports are targeted at member country officials, academia, the media, and business. They are also available on the Fund’s website.

  • Economic Issues. These publications (about 10 annually) present the Fund’s economic research (drawn primarily from selected IMF Working Papers) in accessible language, to a nonspecialist audience. The one-topic booklets are designed to acquaint readers with Fund research topics of current importance. They are distributed to research institutes and academia (as well as to business, the media, and other educated lay audiences) and are also available on the Fund’s website.

  • Working Papers. Working papers cover a wide range of topics of both a theoretical and an analytical nature. They are distributed to member country government policymakers, academia, and the media by subscription or individual copy. They are also available on the Fund’s website.

  • Policy Discussion Papers (formerly Papers on Policy Analysis and Assessment). These papers cover research in the area of policy design. They are normally fairly nontechnical and are aimed primarily at operational staff involved in mission work in the Fund and people outside the Fund who are interested in policy issues. They are also available on the Fund’s website. Consideration is being given to compiling these papers into an annual volume.

  • Books and Seminar Volumes. These cover a wide variety of topics (e.g., Transition to Market: Studies in Fiscal Reform (1993); Value-Added Tax: International Practice and Problems (1988)). Seminar volumes are based on seminars held or cosponsored by the IMF. Both books and seminar volumes are distributed to member country government officials, academia, business and the media.

  • Occasional Papers. The Occasional Papers series (about 20 produced annually) features staff analyses of a variety of economic and financial subjects of current importance to the Fund’s work, with topics including both country and policy analyses. These publications are aimed at government officials, business, academia, and the media.

  • Staff Studies. These one-off studies cover a range of topics (e.g., External Evaluation of the ESAF, The Economy of the West Bank and Gaza Strip) and are targeted at member government officials, academia, business, and the media.

A list of these documents is found in the Fund’s Publications Catalog. The Fund also has an internal document database, which contains (among other things) Working Paper and Policy Discussion Paper titles and summaries, and Board papers and IMF Staff Country Reports (both in full text in recent years). Research is also presented to external parties through Fund-organized seminars and conferences, and at outside conferences.

Table 6.Comparison of Citations of Staff Papers, Brookings Papers on Economic Activity, and World Bank Economic Review(Citations of 1991 and 1995 Articles)
IMF Staff PapersBrookings Papers on Economic ActivityWorld Bank Economic Review
Number of citations since publication200783315814899
Number of articles322419124532
Average citations per article:
including self-citations6.53.317.
excluding self-citations5.92.716.
Source: Social Sciences Citation Index.
Source: Social Sciences Citation Index.
Table 7.Comparison of Journals Citing Staff Papers, Brookings Papers on Economic Activity, and World Bank Economic Review(Citations of 1991 and 1995 Articles)
Imf sp (32 articles)208bpea (19 articles)331wber (45 articles)148
Int monet fund s pap20am econ rev20world dev20
j int money fin10brookings pap eco ac20world bank econ rev9
econ j9eur econ rev16econ dev cult change6
j dev econ9reg stud12am j agr econ5
world dev9weltwirtsch arch10land use policy5
j int econ8q j econ8econ polit weekly4
weltwirtsch arch8rev econ stat8food policy4
appl econ6int monet fund s pap6j public econ4
am econ rev5j int econ6world bank res obser4
eur econ rev5j polit econ6dev change3
j econ issues5econ j5dev econ3
mach sch econ5growth change5j dev stud3
brookings pap eco ac4j comp econ5j econ lit3
econ model4j econ perspect5j econ perspect3
j comp econ4jahrb natl stat5j mod afr stud3
open econ rev4oxford rev econ pol5land econ3
rev econ stat4pap reg sci5rev income wealth3
rev etud comp est q4can j econ4b indones econ stud2
econ lett3econ lett4ids bull-l dev stud2
j dev stud3j econ hist4j dev areas2
j econ dyn control3j law econ4j econ behav organ2
j econ persp3rand j econ4soc econ stud2
j jpn int eco3reg sci urban econ4third world plan rev2
j macroecon3rev income wealth4trimest econ2
j money credit bank3appl econ3africa1
j policy model3econ inq3agr ecosyst environ1
rev econ3econ polit weekly3am j econ sociol1
world bank econ rev3ind labor relat rev3am polit sci rev1
world dev j dev stud3j monetary econ3ambio1
eastern eu econ2j money credit bank3ann assoc am geogr1
econ model2j urban econ3ann u rev anthropol1
economist2natl tax j3bus hist1
econ polit weekly2new engl econ rev3can j econ1
econ rec2rev ind organ3ecol econ1
explor econ hist2small bus econ3econ j1
int polit oslo2appl econ lett2econ lett1
j afr econ2Cambridge j econ2environ plann1
j bank financ2can public pol2environ resour econ1
j econ lit2econ hist rev2Geogr z1
kyklos2econ model2george wash j intl1
scand j econ2environ plann c2gerontologist1
acta oecon1ind relat2int labour rev1
appl econ lett1int j ind organ2int monet fund s pap1
cato j1int regional sci rev2int rev adm sci1
con temp econ pol1j common market stud2j am plann assoc1
econ dev cult change1j dev econ2j asian stud1
economica1j econometrics2j bank finance1
econ theory1j hous econ2j comp econ1
eur j op res1j ind econ2j dev econ1
europe-asia stud1j labor econ2j econ educ1
geneva pap risk ins1j policy model2j eur soc policy1
int econ rev1j popul econ2j inst theor econ1
j econ1j public econ2j lat am stud1
j financ quant anal1j regional sci2j law econ organ1
j monetary econ1kyklos2j peasant stud1
j post keynesian ec1mich law rev2j policy model1
j world trade1mon labor rev2j polit econ1
math comput simulat1q rev econ financ2j rural develop1
nationalokon tidsskr1rev econ2popul dev rev1
oxford econ paper1scand j econ2public admin devel1
public money manage1urban stud2public choice1
q rev econ finan1world dev2public finance1
s afr j econ1accident anal prev1q rev econ financ1
scand j econ1acta sociol1rev can etud dev1
scot j polit econ1am j econ sociol1s afr j econ1
southern econ j1am polit sci rev1soc forces1
trimestr econ1ann pharmacother1soc legal stud1
wb res ober1ann regional sci1soc policy adm1
world econ1antitrust law1soc sci med1
cato i1tijdschr econ soc ge1
china econ rev1urban geogr1
communist econ ec tr1world econ1
econ dev q1yale law j1
econ geogr1
econ record1
econ soc rev1
environ plann a1
eur j polit res1
eur rev agric econ1
eur urban reg stud1
georgetown law j1
harvard bus rev1
housing stud1
int econ rev1
j am real estate urb1
j appl econom1
j bank financ1
j econ bus1
j econ educ1
j econ lit1
j hum resour1
j inst theor econ1
j jpn int econ1
j labor res1
j law econ organ1
j macroecon1
j transp eng1
j world trade1
kolner z soziol soz1
manch sch econ soc1
med care1
omega-int j manage1
open econ rev1
oxford b econ stat1
oxford econ pap1
pac aff1
polit ekon1
polit quart1
prog plann1
public finance rev1
rev econ stud1
s afr j econ1
scot j polit econ1
southern econ j1
Stanford law rev1
strategic manage1
technol forecast soc1
transport res b-meth1
transport res e-log1
transport rev1
transport sci1
trimest econ1
u pa j int econ law1
u penn j int bus law1
water resour res1
world bank econ rev1
world bank res obser1
world econ1
Imf sp (24 articles)78bpea (12 articles)58wber (32 articles)99
int monet fund s pap13am econ rev4world bank econ rev11
j int money financ5q j econ4j dev econ5
econ j4brookings pap eco ac3world bank res obser4
j econ lit4eur econ rev3econ rec3
open econ rev4ind relat3j financ3
brookings pap eco ac3j afr econ3world dev3
am econ rev2world econ3am econ rev2
appl econ2econ j2econ dev cult change2
appl econ lett2j dev stud1econ j2
econ lett2j law econ1inc monet fund s pap2
econ rec2b indones econ stud1j dev stud2
j jpn inc econ2calif law rev1j econ lit2
oxford rev econ pol2communist econ ec tr1j econ perspect2
weltwirtsch arch2contemp econ policy1j int money financ2
am polic sci rev1econ inq1j portfolio manage2
ann regional sci1econ lett1new engl econ rev2
contemp econ policy1econ polit weekly1q rev econ financ2
dev econ1econ soc rev1world econ2
econ dev cult change1economist1africa1
econ inq1ekon samf tidskr1am j agr econ1
econ model1eur j oper res1appl econ lett1
econ soc rev1eur rev agric econ1brookings pap eco ac1
eur econ rev1food policy1can j econ1
ind relat1ind labor relat rev1china econ rev1
int j forecasting1int econ rev1common mkt law rev1
j comp econ1int polit-osio1communist econ ec tr1
j econ dyn control1j appl econom1comp polit1
j econ perspect1j bank financ1contemp econ policy1
j int econ1j dev econ1decon educ rev1
j monetary econ1j econ lit1desarrollo econ1
j policy model1j inst theor econ1econ lett1
j polit econ1j int econ1econ model1
j popul econ1j money credit bank1econ polit weekly1
jpn world econ1j polit econ1econ transit1
kyklos1jahrb natl stat1ecosystems1
nber macroecon ann1nationalokon tidsskr1en erg econ1
public choice1open econ rev1eur econ rev1
reg stud1oxford econ pap1europe-asia stud1
scand j econ1polit soc1food policy1
soc res1rev black polit econ1geo forum1
va law rev1weltwirtsch arch1j afr econ1
world bank econ rev1j comp econ1
world dev1j econ theory1
j financ econ1
j financ intermed1
j financ quant anal1
j finance1
j int econ1
j interam stud world1
j llbr inf sci1
j monetary econ1
1 popul econ1
lat am res rev1
open econ rev1
oxford econ pap1
public admin develop1
public choice1
rev financ stud1
soc forces1
soc res1
stud family plann1
theor soc1
water resour res1
weltwirtsch arch1
Table 8a1971–99 Citations of Staff Papers Articles Published in Selected Years(Excluding Citations in Staff Papers)
Year of Citation
Year of Publication
Table 8b.1971–97 Comparison of Total Citations (Over Selected Time Periods) of Staff Papers Articles Published in Selected Years(Excluding Citations in Staff Papers)
Year of PublicationFirst three years1First four yearsFirst five years

“First three/four/five years” refers to the number of citations of Staff Papers articles in the first three/four/five years after they have been published (including the year of publication).

“First three/four/five years” refers to the number of citations of Staff Papers articles in the first three/four/five years after they have been published (including the year of publication).

Annex III The Review Process

To ensure the quality and consistency of the Fund’s work, and to keep Fund staff abreast of developments in other areas of the Fund, review is used extensively. A formal review process is applied to a number of Fund documents, including the following.

  • Briefing Papers: internal briefings prepared by every mission team prior to going on mission. Briefing papers contain background data, a summary of the issues that the mission team thinks should be discussed on mission, and a statement of the position the team thinks it should take.

  • Staff reports: these reports are prepared for the Executive Board on the outcome of the mission.

  • Letters of Intent: these contract-type documents are written with member country authorities who are negotiating a program with the Fund.

  • Policy Framework Papers: these documents, prepared by member country authorities in collaboration with staff in the Fund and the World Bank, set out a medium-term economic and financial policy framework in conjunction with IMF/World Bank structural adjustment loans.

  • Country Strategy Papers: these papers set out a multiyear strategy and analytical framework to guide Fund work on specific countries.

  • Memoranda of Economic Policies: these documents are written jointly with member country authorities negotiating a program with the Fund.

  • World Economic Outlook.

  • International Capital Markets report.

  • Policy papers presented to the Executive Board: e.g., “Involving the Private Sector in Forestalling and Resolving Financial Crises.”

This annex describes the review process associated with specific country-related work, namely, the first six types of documents identified above. The review process for the other documents listed above is similarly thorough, but involves different reviewers depending on the nature of the document.

After a document has been written, one or more of the senior staff in the Front Office of the author’s department review it to determine whether it is consistent with the department’s overall approach. Once the author has made any amendments suggested by the Front Office, the document is sent to the Policy Development and Review Department—the primary reviewing department—and various other departments depending on the nature of the document. For example, a briefing paper might be sent to the Monetary and Exchange Affairs, Fiscal Affairs, Legal, Statistics, Treasurer’s, and Research Departments for comments. These latter Departments are not required to comment if they do not think that they can add any value (for example, both the Research Department and the Fiscal Affairs Department have, in consultation with area departments, established a list of the countries that they regularly comment on). These departments check for technical accuracy, appropriateness of policy recommendations, completeness, and consistency of treatment across countries.

Reviewing departments often send the document to several people in their department with different specializations. In some departments, all reviewers’ comments are sent to the Front Office where they are consolidated into a departmental statement (including any additional comments made by the Front Office coordinator) and sent back to the originating department, with a copy sent to the Policy Development and Review Department. In other departments, coordination of comments generally takes place at the divisional level.

The authors use their judgment to incorporate changes suggested by the reviewers, then send a revised copy to their Front Office and the Policy Development and Review Department for clearance. If the Policy Development and Review Department does not think that other departments’ comments have been adequately incorporated, they will not “sign off on the document. Unresolved disagreements between departments are brought to the attention of the Deputy Managing Directors, who have responsibility for adjudicating.

The review process is the subject of significant debate and dissatisfaction in the Fund. Three years ago, management issued a memorandum attempting to streamline the review process and improve the quality of the outcome. The memorandum noted that “we do too much reviewing” and that steps should be taken to reduce “by a considerable margin the volume of reviewing that is done in the Fund.”

The memorandum made the following recommendations.

  • originating departments should exercise discretion over which departments, other than the Policy Development and Review Department, are asked to comment on papers;

  • departments should not feel obliged to comment on all papers circulated to them;

  • reviewing departments should confine their comments strictly to their own areas of expertise;

  • area departments should take full responsibility for quality control;

  • the Policy Development and Review Department, in its comments, should distinguish between the two to four key issues that have to be addressed, and minor or editorial comments;

  • area departments should seek to consult with relevant reviewing departments on important policy issues before briefs are prepared;

  • area departments should, as much as possible, allow reviewing departments three working days to give their comments; and

  • papers sent to management should include a one-page summary that outlines key issues. This should be accompanied by a cover note that identifies any differences of views among departments.

Three years later, discussions we have had with economists throughout the Fund reveal that there continues to be substantial dissatisfaction with the review process.

Management and department heads are aware of these problems, and are in the process of looking again at the way in which the interdepartmental review procedures are operating and the possible need for improvements. The body of our report makes recommendations for improvements to the process, from the perspective of (1) ensuring that researchers have a more effective input into operational work, while at the same time (2) reducing the overall amount of time that is devoted to the review process, both in area and functional departments.

Annex IV IMF Organizational Chart

*The Institute also supports two training centers: the Joint Vienna Institute (Vienna, Austria) and the Singapore Regional Training Institute (Singapore).

Annex V GlossaryA-level:

The Fund’s job gradings for permanent staff are divided into groups “A” and “B.” For economists, A-level positions are predominantly nonmanagerial, although grade A15, the last grade before the B-level, has some managerial responsibility (note that the career structure for noneconomists is somewhat different).

Annual Performance Review:

See Box 2 on page 28.


The Asia-Pacific Economic Cooperation (APEC) is a regional grouping of 21 economies in the Asia and Pacific region. It was established in 1989 as an informal dialogue group, and has since become the primary regional vehicle for promoting open trade and practical economic cooperation. The APEC group holds a number of meetings annually. The IMF’s Research Department provides information and analysis of current economic issues to certain APEC meetings.

Area Department:

See page 46, paragraph 2

Article IV Consultation:

Under the provisions of Article IV of the Articles of Agreement (see Articles of Agreement), the Fund holds bilateral consultations with all its members countries, in most cases every year. As part of these consultations, a staff team from the Fund visits a country to discuss with the authorities the economic developments and the monetary, fiscal, and structural policies that the authorities are following. The team also gathers relevant economic and financial information on the economic situation in the country. On its return to Fund headquarters, the team prepares a report analyzing the economic situation and evaluating the stance of policies. This serves as the basis for discussion by the Fund’s Executive Board.35

Articles of Agreement:

The Articles of Agreement established the IMF’s existence. They are a charter of rights and obligations on both the Fund and its members. There have been several modifications to the original Articles.


The Fund’s job gradings for permanent staff are divided into groups “A” and “B.” For economists, B-level is the managerial level (note that the career structure for noneconomists is somewhat different).

Coordinating Group on Exchange Rates (CGER) exercise

Internally, the Fund tries to identify possible misalignments among major currencies. An interdepartmental working group (the CGER) acts as the technical secretariat to prepare exchange rate analysis for staff and management discussion using a methodology developed in-house. CGER exercises are conducted periodically.

Department Director:

Each Fund department is headed by a director.

Economic Counselor:

The Director of the Research Department is formally known as the Fund’s Economic Counselor. The role of the Economic Counselor is to be a source of independent advice to the Fund on policy issues, to integrate the ideas of research staff into the design of Fund policies, and to convey such ideas to policymakers inside and outside the Fund.

Economist Program

Program: Each year, the Fund hires 30–35 economists below the age of 33 into its Economist Program. Participants in the program undertake one-year assignments in two different departments—usually an area and a functional department—and take part in at least two missions. Applicants require a superior academic training in economics—with emphasis on monetary economics, international trade, and finance and public finance. Typical participants in the Economist Program are around 29 years old, with a Ph.D. in macroeconomics and demonstrated aptitude in working as an applied economist on policy issues in an international environment.36

Executive Board:

The Executive Board is a 24-member, in-residence board. The Board is staffed by representatives of the Fund’s member countries. The Board meets at least three times a week in formal session and is responsible for conducting the day-today business of the Fund. It carries out its work largely on the basis of papers prepared by IMF management and staff.37

First Deputy Managing Director:

The Fund has three Deputy Managing Directors, who are each responsible for different aspects of the Fund’s operations. Currently the First Deputy Managing Director is assigned responsibility for, among other things, research, policy development, and policy advice to national authorities.

Front (or Immediate) Office:

See page 46, paragraph 2.

Functional Department:

See page 46, paragraphs 3 and 4.


Group of Seven (G-7) meetings are meetings between representatives of Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States. Economic and financial issues are among the topics discussed in G-7 meetings.

G-7 Notes:

In preparation for G-7 meetings, the IMF’s Research Department prepares information notes on world economic and market developments.

IMF Institute:

The IMF Institute is the IMF’s training department for officials of member countries. The Institute runs a number of economics courses and also organizes seminars and training courses for Fund staff.

IMF Staff Papers:

See page 51.

Internal Memorandum:

A wide variety of internal memoranda exist in the Fund. For the purposes of this report, an internal memorandum is a think piece on an issue that is for internal consumption only. It may be prompted by the need to explore a difficult issue that the Fund is grappling with, or to clarify Fund thinking on an issue, or to discuss an issue that is the subject of internal debate.

International Capital Markets report:

This report, prepared by the Research Department, surveys developments in international financial markets. The report draws on discussions with commercial and investment banks, securities firms, stock and futures exchanges, regulatory and monetary authorities, and others.38


The term “management” in this report refers to the Managing Director, the First Deputy Managing Director, and the two Deputy Managing Directors.


The term “mission” is used generically in the Fund to refer to any overseas travel related to the Fund’s work. In the context of this report, however, it is used to refer specifically to the visits of teams of IMF staff to member countries in the context of Article IV consultations, programs, or technical assistance.

Mission Chief:

A mission chief is the staff member who leads the team of staff on a mission (see above).

Occasional Papers:

See page 51.

Policy Discussion Paper:

See page 51.


A program is a detailed economic package based on the analysis of the economic problems of the member country. It specifies the policies being implemented or that will be implemented by the country in the monetary, fiscal, external, and structural areas, as necessary, to achieve economic stabilization and set the basis for self-sustained growth. It is usually supported by the use of Fund resources, and therefore includes criteria that the members must adhere to as a condition for the use of Fund resources.

Research Assistant:

A research assistant helps economist staff with various aspects of their data and computer work. Tasks might include comparing and evaluating alternative data sources, and ensuring consistency of data series and definitions; providing support in maintaining fully documented data files; performing various computations, preparing charts, and formatting tables to Fund standards; and executing computer programs for statistical and econometric analysis in support of policy work. Qualifications for the job generally include completion of a university degree program in economics, or equivalent, with good knowledge of statistics and econometrics.

Review Process:

See Annex III, page 60.


Surveillance refers to all aspects of the Fund’s monitoring, analysis of, and advice concerning the policies and prospects of individual member countries and the world economy. The IMF exercises surveillance through both multilateral and bilateral means. Multilateral surveillance consists of Executive Board review of developments in the international monetary system based principally on the staff’s World Economic Outlook reports and through periodic discussions of developments, prospects, and key policy issues in international capital markets. Bilateral surveillance takes the form of consultations with individual member countries, conducted annually for most members, under Article IV of the IMF’s Articles of Agreement.39

Visiting Scholar:

Visiting scholars are academics (and sometimes policymakers) who are paid by the Fund to come to the Fund for a period of time to conduct research and interact with Fund staff. In the Research Department, visiting scholars typically come to the Fund for between two and four weeks. Some departments specifically set aside resources for visiting scholars; others fund visiting scholars out of their accumulated vacancies. Decisions about who to invite are made by individual departments.

Working Group on Fund Policy Advice:

See pages 59–50, paragraphs 27–32.

Working Paper:

The Working Paper series features original research by Fund staff, consultants, and visiting scholars. The length of a Working Paper, except for review articles, should not normally exceed 25 single-spaced pages (including figures, tables, and appendices).

World Economic Outlook:

The World Economic Outlook (WEO) is generally produced twice annually. It is prepared by the Research Department, drawing on input from all Fund departments, primarily from the information they receive through their consultations with member countries. The WEO contains the IMF’s projections for a number of economic variables in its member countries, both individually and in various different aggregates. It also contains an analysis of the trends, policies, and issues underlying the projections.

Bibliography (Selected)


Papers on Inflation Targeting

Working Papers and PPAAs

Selected Issues

    DunawaySteve and others1999Canada: Selected Issues IMF Staff Country Report No. 99/14.

    LaneTimothySkanderVan den Heuvel and others1998United Kingdom: Selected Issues IMF Staff Country Report No. 98/04. Also published as“The United Kingdom’s Experience with Inflation Targeting,”IMF Working Paper 98/87.

    SamieiHosseinJan KeesMartijnZenonKontolemis and LeonardoBartolini1999“United Kingdom: Selected Issues,”IMF Staff Memorandum SM/99/43.

30 Randomly Selected Working Papers from 1998

Research Considered by Departments to Be Their Best Work in 1998


Asia and Pacific

European I

European II

Fiscal Affairs

IMF Institute

Monetary and Exchange Affairs

Middle Eastern

    HandyHoward and a staff teamEgypt: Beyond Stabilization Toward a Dynamic Market Economy IMF Occasional Paper No. 163 (May1998).

    NashashibiKarimPatriciaAlonso-GamoStefaniaBazzoniAlainFelerNicoleLafromboise and SebastianParis-HorvitzAlgeria: Stabilization and Transition to the Market 1998 IMF Occasional Paper No. 165.

Policy Development and Review

    GhoshAtish Rex and StevenPhillips“Warning: Inflation Can Be Harmful to Your Growth,”IMF Staff PapersVol. 45 (December1998).

    “IMF-Supported Programs in Indonesia, Korea and Thailand: A Preliminary Assessment,”Executive Board Paper EBS/98/139August1998.

    “Involving the Private Sector in Forestalling and Resolving Financial Crises”Executive Board Paper EBS/98/139August1998. (This was an interesting, well-written paper, but we did not include it in the evaluation because we considered that, although it was based on research, it was not actually a research paper.)


    BergAndersen and CatherinePatillo“Are Currency Crises Predictable? A Test,”IMF Working Paper 98/154; also published in IMF Staff PapersVol. 46 (June1999).

    FloodRobert and NancyMarion“Perspectives on the Recent Currency Crisis Literature,”IMF Working Paper 98/130(this excellent paper was excluded from the evaluation).

    KodresLaura and ChristianJochum“Does the Introduction of Futures on Emerging Market Currencies Destabilize the Underlying Currencies?”IMF Working Paper 98/13; also published in Staff PapersVol. 45 (September1998).

    MauroPaulo and AntonioSpilimbergo“How Do the Skilled and the Unskilled Respond to Regional Shocks? The Case of Spain,”IMF Working Paper 98/77; also published in IMF Staff PapersVol. 46 (March1999) pp. 17.

Western Hemisphere

We would note, however, that outsiders’ perceptions may not fully take account of the fact that in the period of the late 1980s to early 1990s, the Fund’s research was not perceived within the Fund as being successfully integrated into its operations.

Of the 364 Working Papers, 138 (or a little over a third) were on topics of concern to industrial countries only and 166 (or less than half) were on topics of interest to developing countries. The remaining 60 were either theoretical or general enough to be of possible interest to both groups of countries. In addition, using a quick, simplified ratings scale, we assessed the relevance of the research for the Fund and the extent to which it made use of the Fund’s special expertise and advantages. Our results, while subjective, suggest that a large number of the Working Papers were on topics that are not central to the Fund’s operations and that much of the research is on topics already widely studied outside the Fund.

We did not find irrefutable evidence that this has resulted in a decrease in the number of research products in recent years (see Tables 1-5 in Annex II, which show a decline in research in 1995 to 1997 but an increase in 1998. However, the list of research products for 1998 may, for various reasons, include more of the total research than the lists for earlier years). Nonetheless, the staff’s concerns that research is being squeezed out could be an important factor behind the observation that the quality of research is not as high as might be expected.

Our reading of the research output in paras. 32–52 provides support for this view. We sensed that in area departments, research was often hastily done without any prospect of staff being given the time to revise and refine their research.

See Annex III for a discussion of the review process.

Although some staff feel that not enough effort is made to integrate the analysis contained in these products into the Fund’s operational work.

That is, in all area departments and research producing functional departments (Policy Development and Review, Monetary and Exchange Affairs, Fiscal Affairs, IMF Institute, and Research).

The two most probable reasons cited by the staff to whom we spoke for the relative lack of research assistants are the following. First, there is a prevalent attitude in the Fund that in entering the data themselves, economists get a better understanding of the data. We agree that economists need to understand the data, but engaging in the rote task of data entry and collection is not necessarily the best way of achieving this goal. Second, the Fund has a head-count approach to budgeting. This has the unintended consequence of biasing hiring toward Ph.D.s because a manager will almost always choose to hire a highly qualified economist over a research assistant if the extra cost of hiring an economist is not reflected in his or her budget.

Details on how the review process operates can be found in Annex 3.

The Research Department alone, which has a specific budget for visiting scholars, allocates about 275 person-weeks to visiting scholars. The Fiscal Affairs Department, also has a visiting scholars program of about 60 person-weeks. Other departments also bring in visiting scholars on a short-term basis, utilizing accumulated vacant staff-weeks from their overall head-count allocation.

We attempted to do similar citation counts for the World Economic Outlook, the International Capital Markets report, Occasional Papers, and several Fund conference volumes. We do not report these tables because we could not satisfy ourselves of the accuracy of these counts and did not have the resources to conduct a more thorough count.

The CRP could consider inviting, possibly on a case-by-case basis, outside academics to its meetings, in order to use their experience in making decisions.

The purpose of the CRP is to ensure some coordination and prioritization to exploit the synergies from decentralized research. The CRP should not become another layer of hierarchy or overly centralize the research process. Management should monitor the workings of the CRP to make sure that this does not happen.

Staff need to be given some time to independently pursue their own research interests without approval of their projects. Giving staff this time to pursue their own intellectual curiosity is a strong incentive to produce quality research and to maintain their human capital by keeping abreast of developments in their own fields of interest. This research should, however, be evaluated ex post for its relevance to the Fund’s work. See Recommendation 5 below.

We recognize that the Fund has, in recent years, greatly enhanced its research capabilities on transition countries and is also increasing the number of projects devoted to developing country and financial sector research. This recommendation reinforces this trend.

With limited exceptions approved by management on the basis of sensitivity.

The posting of requests on the Fund’s internal website would supplement the current informal process in which departments approach other departments directly for assistance on policy work.

This will not be a relevant criterion for all pieces of Fund research.

There might be a concern that the quality of presentations will be inadequate when given by more junior staff. In our experience, this has rarely occurred in public policy institutions with which we have been affiliated. Staff have tremendous incentives to give a good presentation because it has a beneficial impact on their careers. Furthermore, giving presentations to the Board creates strong incentives for staff to improve their presentation skills.

The Policy Development and Review Department has the organizational responsibility to certify the paper’s contents as representing the Fund’s position. Thus, there is clearly a need for this department to continue to make written comments.

In a poorly integrated organization, creating a special hiring procedure in a research department has the potential to isolate the department. However, successful research departments in public policy organizations are those in which there are some individuals who focus on research, but the department ensures that there are strong incentives in place to encourage those researchers to provide value to the operational parts of the organization, and to exit them when they fail to do so. Recommendation 4 addresses this by providing greater incentives for researchers to be involved in the operations of the Fund.

In a research unit headed by one of the Committee members, such a change in structure produced substantial increases in efficiency because the time devoted to management activities and multilevel editing of written documents decreased dramatically. It also led to substantial improvements in the quality of research output because researchers were now held more accountable for their final product and did not feel that they had to make their products less controversial to please the many layers of management.

We have neither the time nor the expertise to design a detailed proposal for change, which would also need to consider any proposed changes in the wider context of the general organizational structure of the Fund. We see value in bringing in external experts to consider this issue.

This complication would not arise if the Fund had a dollar budget rather than a head-count budget for staff.

Fund economists are hired through two main channels: (1) through the Fund’s Economist Program, which hires recent graduates from top economics faculties around the world (generally at the Ph.D. level); and (2) at midcareer level. Midcareer economists are hired from public policy making institutions, academia, and the private sector. The Economist Program looks for people with a strong interest in public policy and the capacity to work in various parts of the Fund. Economist Program hires spend their first two years in two different parts of the Fund, and are then offered a permanent place in a department if they have performed successfully in their first two years.

Article I (i).

Review of Research Activities in the Fund, prepared by the Interdepartmental Working Group on Fund Policy Advice, November 16, 1993, p. 2.

Ibid., p. 3.

This list was constructed by combining the official annual list of completed research projects from the Interdepartmental Working Group on Fund Policy Advice, the Fund’s publication Research Activities of the International Monetary Fund, January 1991-December 1997, and several other lists of research output that departments provided us with. We have classified research output according to year of publication. This is somewhat artificial, as a paper that was worked on throughout one year may not have been published until the following year. We have tried to capture as much of the Fund’s research output as we can, but the list may miss some shorter internal pieces of research that have not been published and some research that has been published outside the Fund that has bypassed the Fund’s normal vehicles for the distribution of research and has not been reported in the Interdepartmental Working Group’s list. The list may also fail to incorporate some papers that, although not considered to be pieces of research themselves, may have a research component to them. The list for 1998 is likely to be more comprehensive than lists for earlier years.

Classification taken from Research Activities of the International Monetary Fund, January 1991-December 1997.

Note, however, that a volume estimate is somewhat simplistic since some of the research produced in the Research Department is of much larger scale than that produced in area departments.

There is no formal contracting system for area departments that wish to use the expertise of a staff member in the Research Department. Departments that require specialized research (or that simply want a staff member from Research to accompany a mission) either contact a specific individual, or they approach the Economic Counsellor, someone in the Front Office, or the relevant division chief and ask them whether the department is able to provide someone suitable for the project or mission.

“Review of Research Activities in the Fund,” op. cit., p. 1. It has 15 members—one from each area and functional/special services department, and one from the External Relations Department. It is chaired by the member from the Research Department. All members are appointed by the First Deputy Managing Director.

Definition adapted from the Annual Report of the Executive Board for the Financial Year ended April 30, 1997, International Monetary Fund, Washington.

Definition adapted from advertisement for Economist Program in Finance and Development, June 1999, p. 57.

Definition adapted from IMF, Annual Report, 1998, p. iv.

Definition adapted from International Capital Markets, September 1998, Preface, p. ix.

Taken from IMF, Annual Report, 1998, Chapter VI, p. 33.

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