Part 2 Report of the External Evaluation Committee on the IMF’s Economic Research Activities
- International Monetary Fund
- Published Date:
- April 2000
|Frederic S. Mishkin (Chairman)||A Barton Hepburn Professor of Economics, Graduate School of Business, Columbia University, United States|
|Francesco Giavazzi||Professor of Economics, Department of Economics, Bocconi University, Italy|
|T.N. Srinivasan||Samuel C. Park, Jr. Professor of Economics and Chairman, Department of Economics, Yale University, United States|
Note: Johanna Honeyfield, Special Projects Officer, served as the coordinator of this committee. She was much more than a coordinator of the committee: but for her efficiency, energy, enthusiasm, and intimate knowledge of the Fund as an organization, we would not have been able to complete our report successfully and in time. We thank her for her extraordinary work going above and beyond the call of duty. We also thank Michael Vaney for his research assistance. Finally, we thank the Director and staff of the Office of Internal Audit and Inspection, in particular Elena Frolia.
Executive Summary and Recommendations
Research is critical to the Fund’s successful operation because it provides the analytical foundations for the work of the institution. Without it, the Fund’s views and advice would lack credibility. The contribution of research to the work of the Fund depends on ensuring that research is relevant, of high quality, and disseminated effectively. Our evaluation finds that there is room for improvement on these dimensions.
Specifically, we find the following.
Although the Fund produces some excellent research products, there is substantial room for improvement in the overall quality of the Fund’s research.
The mix of research conducted at the Fund needs to be directed more to areas where it can add the most value.
Research in functional departments needs to be integrated to a greater extent into operational work.
Fund researchers do not have the visible profile in the outside world that they had in the past.
To determine the factors that lie behind these conclusions, we examine five basic issues central to the research process:
incentives and accountability;
resource allocation; and
We find room for improvements on a number of fronts and we make a set of recommendations to achieve these improvements. The recommendations focus on setting priorities for research activities in the Fund and improving incentives and accountability in the research process. Most of the recommendations directly address research activities. However, we believe that it is also important to improve aspects of the wider environment that have an important influence on incentives and resources for research. To this end, we make two recommendations of a more general nature.
Our recommendations are grouped into two sets: this first set consists of 9 key recommendations, followed by a second set of 13 supplementary recommendations.
In our evaluation of the research process, we found room for improvement in the following areas:
the value attributed to research in the day-to-day priorities of the Fund;
the amount of time allocated to conduct high-quality research;
the coordination of research and overall research strategy and priorities;
the mix of research;
communication between departments regarding their research activities;
incentives to conduct high-quality research;
openness to the outside world;
the choice of visiting scholars; and
the allocation of resources for hiring consultants.
The following three recommendations, which focus on allocation of the Fund’s scarce resources, address the issues identified above.
1. Create a Committee on Research Priorities to assist in strategic planning and to support research activities.
This committee should identify research priorities for the Fund. It should also provide resources to research projects it selects from those submitted to it and make Fund-wide decisions on inviting visiting scholars and hiring outside consultants.
2. Introduce explicit departmental targets for staff time allocated to research activities.
Each department should be required to set aside a share of its staff time for research and make this explicit in its budget.
3. Shift the mix of research toward topics that add most value.
Within its mandate, the Fund should shift more of its research efforts toward developing and transition economy, cross-country, and financial sector research.
The following could also be improved:
collaboration between departments;
incentives for researchers to be involved in the policy development process;
accountability of staff involved in research work.
The three recommendations that follow address these issues, and those mentioned earlier, by making improvements to various aspects of the Fund’s incentive structure.
4. Create incentives to improve collaboration between departments and to encourage researchers to contribute to policy work.
Research staff should receive credit in their annual performance reviews for providing valuable service to other departments, based on input from these departments. Requests for assistance on major policy development projects and mission work should be advertised on the Fund’s internal website.
5. Improve the assessment of research quality in the annual performance evaluation system.
The performance assessment for research staff should be based more systematically than at present on a serious assessment of the quality, and not merely the number, of research papers produced.
6. Give all staff, no matter how junior, opportunities to present their research products to management and the Executive Board.
The Fund should adopt a convention that the primary author or authors of a research product should always be the ones who present it to Management or the Executive Board (unless they opt not to do so).
The culture in the Research Department must be supportive of research.
The following recommendation focuses on the role of the Director of the Research Department in fostering a culture that supports research and engages the department in the policy development process:
7. Give a clear mandate to the Director of the Research Department to be both an active research leader and economic counselor to the Fund.
A Director of Research should be actively engaged in the research process, as well as being a source of independent advice to the Fund on policy issues.
There is a need to improve accountability in general and make better use of resources. These issues have important effects on the resources and incentives for research activities but also affect the organization as a whole.
The following recommendations, of high priority but of a more general nature, address these issues.
8. Create a more effective performance evaluation system.
The performance evaluation system should be changed to discriminate more effectively between high and low performers and to encourage poor performers to leave the organization, with a serious threat of termination.
9. Consider how to reduce unnecessary internal review of Fund work and avoid formal written comments where informal communication would be adequate.
As part of an evaluation of the review process, the Fund should consider changes that allow review to take place at an earlier stage of the document development process, make communication more informal, and reduce the amount of reviewing.
Recommendations 10 to 14 address issues relating to the Fund’s culture, incentive structure, and accountability.
10. Encourage participation in relevant external conferences.
As a departmental objective, each department should explicitly set aside time for their staff to participate in external conferences of relevance to the Fund, and ensure that presentations by staff at relevant conferences are rewarded.
11. Put only the names of significant contributors on Fund publications.
Only the names of individuals who have made a significant contribution to the research should appear as authors on Fund publications, and there should be no presumption that senior staff should be listed first on coauthored publications simply because of their seniority.
12. Improve collaboration between World Bank and Fund researchers.
A joint weekly (or biweekly) research seminar, and possibly an annual conference, should be established by the Research Department in conjunction with the appropriate counterparts in the World Bank.
13. Introduce more flexibility into the hiring procedures for entry-level economists.
Economist Program candidates should include those with strong research interests. The Fund should, at the outset, assure some good candidates a place in the Research Department (contingent upon their successful completion of the two-year Economist Program). Candidates with strong research interests should be required to present their research at a seminar and the opinions of active researchers should be taken into account in the hiring decision.
14. Consider streamlining the management structure in the Research Department.
The Research Department should consider adopting a less hierarchical structure as a means of increasing collegiality in the Department, enhancing intellectual exchanges and making efficiency gains.
Recommendations 15 to 18 address issues relating to dissemination of research both within and outside the organization.
15. Write and disseminate nontechnical summaries of highest quality and most relevant research.
Selected research papers with interesting and/or relevant conclusions should be summarized for nontechnical audiences and be disseminated throughout the Fund.
16. Treat working papers as preliminary.
Working Papers should no longer be authorized for distribution by Front Offices or division chiefs and should have the following phrase added to the current disclaimer: “This Working Paper is preliminary and is for discussion purposes only.”
17. Create a new vehicle for non-senior staff to make presentations to Management and the Executive Board.
Periodically, perhaps four times a year, staff should make presentations of their research work in an informal meeting of the Executive Board.
18. Improve dissemination of research to nontechnical audiences outside the Fund.
The Fund should review its overall dissemination strategy, consider publication vehicles that have been successful in other public policy institutions and encourage greater researcher involvement in some nontechnical publications.
Recommendation 19 addresses an issue relating to resource allocation in the Fund.
19. Increase the number of research assistants relative to economists.
The Fund should substantially increase the overall number of research assistants, and hire more of them on fixed-term, nonrenewable contracts.
Recommendations 20 to 22 address issues relating to the culture of openness to the outside world.
20. Create an ongoing external review process for research products.
On a periodic basis, the Fund should contract with outside experts to read and comment on the individual products of the research projects that have been approved by the Committee on Research Priorities.
21. Monitor progress on implementing the recommendations in this report.
To ensure the effective implementation of the recommendations in this report that are approved by the Executive Board, the Board should require Management to submit a follow-up report on implementation one year from the date of discussion of this report.
22. Create periodic, general, external reviews of research activities.
The Executive Board should commit to periodic external reviews of research activities at intervals of no more than five years.