1

REPORT TO CONGRESS ON IMF AND WORLD BANK COLLABORATION 

AND IMF ACCOUNTABILITY 

July 2009 

This report has been prepared pursuant to the Supplemental Appropriations Act, 2009.1  The 

report focuses on two distinct issues: 1) collaboration between the International Monetary Fund 

(IMF or Fund) and the World Bank (Bank) and 2) efforts by the U.S. Treasury and the IMF to 

increase oversight and accountability of the IMF. 

Summary Points

World Bank / IMF Coordination 

• The IMF and World Bank have an extensive architecture for collaboration that seeks to 

promote coordination between the activities of the Bank and Fund, while also keeping each 

institution focused on its core mandate. 

• The Joint Management Action Plan (JMAP), launched in 2007, is a recent effort by the two 

institutions to deepen cooperation between the Bank and Fund through more systematic 

coordination on country issues, better communication on thematic issues, and strengthened 

incentives and institutional support for staff cooperation. 

• U.S. policy has sought to minimize duplication of missions by pushing both institutions to 

focus on their core areas of competency (macroeconomic sustainability for the IMF and 

development policy/assistance for the World Bank). Given their interrelated missions, 

overlap is inevitable in some areas. In such situations, the U.S. advocates for an appropriate 

division of labor between the IMF and World Bank, followed by strong collaboration across 

institutions. In this decade, considerable progress has been made in focusing the IMF on its 

core mission, particularly in low-income countries. 

IMF Oversight and Accountability 

• The IMF has taken important steps in recent years to increase its oversight and 

accountability, including establishing the Independent Evaluation Office, greatly increasing 

its transparency and the information provided to the public on IMF activities, tightening its 

controls against corruption, and reforming its governance structure.

• The U.S. was a strong backer of all of these reforms in the IMF Executive Board and 

continues to advocate for more prompt release of Executive Board minutes and public 

dissemination of technical assistance mission reports. The U.S. has also been at the forefront 

in promoting governance reforms to give a greater voice to underrepresented countries while 

maintaining a strong voice for low-income countries. 

                                                           

1

 Title XIV, Section 1403 (a) of H.R. 2346 (Supplemental Appropriations Act, 2009, P.L. 111-32) states: 

“Not later than 30 days after enactment of this Act, the Secretary of the Treasury, in consultation with the 

Executive Director of the World Bank and the Executive Board of the International Monetary Fund (the 

Fund), shall submit a report to the appropriate congressional committees detailing the steps taken to 

coordinate the activities of the World Bank and the Fund to avoid duplication of missions and programs, 

and steps taken by the Department of the Treasury and the Fund to increase the oversight and 

accountability of the Fund’s activities.” 
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I. World Bank and IMF Coordination 

The World Bank and IMF have developed an extensive architecture for collaboration between 

the two institutions. This architecture seeks to maximize coordination between IMF and World 

Bank activities, while maintaining each institution’s focus on its core mission. This section 

describes the range of collaboration mechanisms implemented over the years and provides some 

concrete examples of how collaboration has worked in the context of the current crisis. 

Architecture of World Bank and IMF Coordination

Coordination between the World Bank and the International Monetary Fund (IMF) has been a 

concern for both institutions since at least 1966, when the Boards of both the World Bank and 

the IMF considered the first report on the issue. Much of the focus centered on reaching 

agreement on a reasonable division of labor between two institutions whose mandates contain 

areas of natural overlap. The 1966 Board decision on Bank/Fund cooperation concluded that: 

“The Bank is recognized as having the primary responsibility for the composition and 

appropriateness of development programs and project evaluation, including development 

priorities. ... The Fund is recognized as having primary responsibility for exchange rates and 

restrictive systems, for adjustment of temporary balance of payments disequilibria and for 

evaluating and assisting members to work out stabilization programs as a sound basis for 

economic advice.”2

James Boughton, the IMF’s historian, notes, “Despite this broad institutional agreement, the 

staffs of the Fund and the Bank had very different conceptions of their respective roles 

throughout the 1970s. These differences involved not just where to draw the line, but in what 

direction it should be drawn. For the Bank, the crucial dimension was stabilization versus 

development, short- versus long-run. The Fund resisted being squeezed into that pigeon hole and 

argued that its conditionality had to aim at promoting longer-term balance and providing a proper 

basis for economic development. For the Fund, the proper demarcation was between macro- and 

microeconomics, between aggregate performance and the structure of the economy. The Bank 

resisted being squeezed out of discussions related to the longer-term dimensions of borrowers’ 

macroeconomic policies.”3 

This tension escalated in the 1980s, as the World Bank ventured into structural adjustment 

lending and the IMF began to focus more on longer-term lending meant to boost growth. The 

blurring between the roles of the IMF and the World Bank led to the 1989 Concordat on BankFund cooperation,4

 which remains the guiding document on the division of labor between the 

Bank and the Fund. The Concordat states that the IMF’s core focus is on the “aggregate aspects 

of macroeconomic policies and their related instruments – including public sector spending and 

revenues, aggregate wage and price policies, money and credit, interest rates and exchange 

rates.” The Bank, on the other hand, should focus on “development strategies; sector and project 

investments; structural adjustment programs; policies which deal with the efficient allocation of 

                                                           

2

 ‘Fund–Bank Collaboration’, Memorandum to Members of the Executive Board, December 13, 1966. 3 Silent Revolution: The International Monetary Fund 1979–1989, chapter 20. 4 http://www.imf.org/external/pubs/ft/sd/index.asp?decision=DN12
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resources in both public and private sectors; priorities in government expenditures; reforms of 

administrative systems, production, trade and financial sectors; the restructuring of state 

enterprises and sector policies.” The Concordat also states that when differences of opinion arise 

between Fund and Bank staff, the institution without the primary responsibility for the issue at 

hand is expected to “yield to the judgment of the other institution.” The Concordat includes a 

number of guidelines to enhance collaboration between the institutions on specific policy 

questions such as structural adjustment, debt policy, and arrears. The Concordat’s broad division 

of labor between the IMF’s role in establishing a sustainable macroeconomic framework and the 

World Bank’s role in shaping development policy has been quite durable. 

In the wake of the Asian financial crisis in the late 1990s, the U.S. led an effort to improve IMF 

and World Bank collaboration on financial sector issues. One of the outcomes of this effort was 

the September 1998 decision by the Boards of the Bank and the Fund to establish the Bank-Fund 

Financial Sector Liaison Committee (FSLC), comprising senior staff from both institutions, to 

enhance the collaboration process between the two institutions.5 The main objective of the 

FSLC is to enhance operational coordination and effectiveness between the Bank and the Fund in 

financial sector work. Facilitating early and continuous agreement on the allocation of work 

between the two institutions helps to ensure that the two institutions deliver high quality, sound, 

and timely advice and support to member countries, and that the limited expert resources 

available are engaged in the most effective way. 

The centerpiece of Bank-Fund collaboration on financial sector issues continues to be the 

Financial Sector Assessment Program (FSAP),6

 a joint IMF and World Bank effort introduced in 

May 1999. The FSAP aims to increase the effectiveness of efforts to promote the soundness of 

financial systems in member countries. Supported by experts from a range of national agencies 

and standard-setting bodies, work under the program seeks to identify the strengths and 

vulnerabilities of a country's financial system, determine how key sources of risk are being 

managed, assess compliance with international financial sector standards (embodied in a variety 

of Reports of Observances of Standards and Codes), ascertain the sector's developmental and 

technical assistance needs, and help prioritize policy responses. The roles and responsibilities of 

the Bank and the Fund in financial sector work were set out in guidelines issued by the FSLC in 

1999.7

 Under these guidelines, the Bank would be concerned with sectoral reform and the 

development impacts of the financial sector, while the Fund would focus on the macroeconomic 

and stability aspects of the financial sector. The 1999 guidelines outlined procedures by which 

staff exchange information, coordinate work programs, undertake joint missions, provide 

consistent policy advice to country authorities, and negotiate financial sector conditions in 

Letters of Intent and Letters of Development Policy. 

The next reform in Bank/Fund collaboration architecture came in 2001 in response to criticism of 

IMF and World Bank conditionality in low-income countries. A 2001 joint IMF / World Bank 

board paper on Strengthening IMF – World Bank Collaboration on Country Programs and 

5 http://www.imf.org/external/np/mae/fslc/index.asp

6 http://www.imf.org/external/NP/fsap/fsap.asp 7 Guidelines on Collaboration Between the Bank and the Fund in Financial Sector Work, SM/99/158 
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Conditionality8 laid out a new operational framework for the division of labor between the IMF 

and World Bank based on the concept of lead agency. In assessing individual country programs, 

IMF and World Bank staff would agree on a lead agency for particular policy issues that would 

take the lead in discussions with country authorities. This process was paralleled by a series of 

decisions taken by the IMF to streamline conditionality in its programs, with a particular focus 

on reducing past drift of IMF conditionality into areas outside of the IMF’s core area of 

responsibility. 

Another area of close collaboration between the IMF and World Bank is in the implementation 

of debt relief through the Heavily Indebted Poor Countries (HIPC) initiative and the Multilateral 

Debt Relief Initiative (MDRI). The key pillars of the implementation of the HIPC initiative in 

qualifying low-income countries are the preparation and implementation of a participatory 

Poverty Reduction Strategy Paper (PRSP) and maintenance of macroeconomic stability under an 

IMF-supported program. IMF and World Bank country teams coordinate their support for the 

PRSP process through the production of Joint Staff Advisory Notes (JSAN) in order to both 

assist the low-income country in properly targeting its available resources on poverty reduction, 

while also providing information to assist in donor oversight. Likewise, the PRSP is used to 

inform the development and implementation of the low-income country’s IMF-supported 

program, in order to align the IMF program with the country’s poverty reduction and 

development goals. Qualification for debt relief under HIPC and MDRI also includes a variety 

of country-specific requirements, designed to improve growth, stability, governance, and socialsector outcomes. For these more detailed areas, the IMF and World Bank each focus on their 

respective areas of expertise. The World Bank takes the lead in monitoring and support of efforts 

to improve long-term development prospects and social-sector outcomes in areas such as health 

and education. The IMF then focuses on issues that directly affect a country’s macroeconomic 

outlook to encourage an environment that will allow for increased growth. 

Joint Management Action Plan (JMAP) 

A high-level independent committee headed by former Brazilian Finance Minister Pedro Malan, 

issued its final report on February 27, 2007 on how the IMF and the World Bank could improve 

their working relationship.9

 The report stressed that closer collaboration is critical for the 

effective and efficient delivery of services to the institutions' member countries—especially 

given an ever-shifting global economic landscape and emerging pressures from global warming, 

energy security, and population aging. It also urged the IMF to continue to clarify its role in 

low-income countries, including financing activities. 

The institutional response to the recommendations of the Malan Report was the Joint 

Management Action Plan (JMAP), which was based on extensive consultations and surveys of 

staff.10 It was adopted by the managements of both the Bank and the Fund in September 2007 

and subsequently endorsed by both Boards. The JMAP framework is built on more systematic 

coordination on country issues, better communication on thematic issues, and strengthened 

                                                           

8 http://siteresources.worldbank.org/PROJECTS/Resources/imf-wb-conditionality08-22-01.pdf 9 http://www.imf.org/external/np/pp/eng/2007/022307.pdf

10 http://www.imf.org/external/np/pp/2007/eng/092007.pdf
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incentives and institutional support for staff cooperation. Specific actions to achieve objectives in 

each of these areas were summarized in an extensive implementation matrix. Under the plan, 

Fund and Bank country teams discuss their country-level work programs, which identify macrocritical sectoral issues, the division of labor, and the work needed from each institution in the 

coming year. Also, the Bank and Fund have improved their information sharing at the country 

level, including technical assistance reports. 

The JMAP called for an interim progress report to both managements after one year, with a full 

progress report to the Executive Boards of both institutions later in 2009. The interim progress 

report was submitted to both managements in November 2008. While noting many instances of 

good collaboration, the report highlighted scope for improvement. At the same time, and in light 

of the extensive restructuring underway at the IMF at the time (which was largely instituted after 

the JMAP had been prepared), the review recommended that future JMAP efforts focus more 

sharply on priorities and actions where they can do the most good. Consequently, Bank and 

Fund staff revised the original JMAP implementation matrix to enhance its relevance and to 

make it more operational by setting clear priorities, monitorable deliverables, and stronger 

incentives for the next year. Interim joint reviews have been instituted by a Bank Managing 

Director and Fund Deputy Managing Director to provide a clear signal of the priority placed by 

managements on good collaboration. A progress report to both Executive Boards is to be 

discussed after the October 2009 IMF/World Bank Annual Meetings. 

Collaboration in the Context of the Current Crisis

The global economic crisis has required the staffs of the IMF and World Bank to step up their 

cooperation at a country level, using the architecture discussed above. The extensive 

cooperation between Bank/Fund staff in responding to the crisis provides some examples of how 

the collaboration architecture above has worked in practice. Below are three examples of recent 

country programs that highlight Bank/Fund collaboration in crisis response. 

ARMENIA 

Since late 2008, the Armenian economy has been severely impacted by the global crisis, notably 

the downturn in Russia. A sharp reduction in balance of payments inflows has been followed by 

a worsening fiscal position as revenue plummets. At the same time, economic activity is 

contracting, with real GDP expected to fall by about 10 percent in 2009. In this setting, 

Armenia’s financing needs have widened considerably. 

Both the IMF and World Bank have responded quickly to Armenia’s needs. This work has 

followed the agreed division of labor, with the Fund covering monetary and exchange rate issues, 

fiscal aggregates, and financial sector stability, and the Bank focused on expenditure 

composition and efficiency, investment climate, employment generating activities through 

infrastructure lending, credit for small and medium enterprises (SMEs), and governance relatedreforms. On taxation, the Fund has focused on tax administration and the Bank on customs, with 

both institutions collaborating closely. 

In March 2009, the IMF approved an exceptional access Stand-By Arrangement of $560 million, 

augmented in June by about $260 million for general budget support in light of the deteriorating 
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situation. At the same time, the Bank fast-tracked a series of quick-disbursing IDA-financed 

projects for rural infrastructure and an SME credit line, and also approved a first $60 million 

development policy operation for budget support. 

As the crisis was unfolding, the Bank and Fund teams worked closely to ensure that the program 

design, financing, sequencing of operations, technical assistance needs, and supporting policies 

(including social safety nets) were fully synchronized. The teams have collaborated closely to 

provide advice on appropriate countercyclical policies, with the authorities agreeing to maintain 

an open trade regime and limit direct support to industry. Both headquarters and field-based staff 

have routinely participated in the other institution’s meetings with the authorities, in part through 

parallel missions by World Bank and IMF country teams. Preliminary drafts of all documents 

are shared between the respective country teams. Both institutions have also participated in a 

governmental working group to discuss economic forecasts on a regular basis. 

GHANA

In Ghana, macroeconomic imbalances emerged in 2007-08 on account of highly expansionary 

fiscal policies, which contributed to a doubling of inflation to 20 percent, a rise in the external 

current account deficit to 19 percent of GDP, a loss of official reserves, and exchange market 

pressures. The global financial crisis exacerbated these fiscal and external imbalances. The fiscal 

position was hit by slowing economic growth and revenue collections, while the external 

position was adversely impacted by loss of access to sovereign market funding and falling 

remittances and foreign direct investment.

Bank and Fund teams worked closely with the new government to develop a program that could 

receive funding from both the Bank and Fund. In February 2009, the Fund released one of its 

staff, a Ghanaian national fiscal expert, to assist the authorities; he was subsequently appointed 

Deputy Minister of Finance. In addition, a Fund mission, supported by the Bank, advised in the 

formulation of the 2009 budget. In late-April, the authorities requested Bank and Fund financing, 

and by end-May Bank staff had completed negotiations for a two-tranche development policy 

operation (the Economic Governance and Poverty Reduction Credit, EGPRC) of $300 million 

equivalent and an IMF mission had negotiated a program to be supported by a $600 million 

Poverty Reduction and Growth Facility (PRGF) arrangement; Board approval occurred on June 

30 and July 15, respectively. Supporting the program design, the Fund fast-tracked three 

technical assistance missions on tax policy, revenue administration, and natural resource 

taxation. On the Bank side, the authorities were provided with detailed briefing notes on key 

areas of Bank engagement, and with proposals for accelerating project implementation. 

The Bank’s lead economist participated as a full member of the Fund’s February budget mission, 

ensuring dialogue and coordination between the two institutions on key policy issues and the 

macroeconomic framework as well as providing inputs on the structural reform agenda, notably 

electricity, oil and gas, public sector reform and public expenditure. After the IMF and World 

Bank received funding requests, collaboration was close to ensure consistent and mutuallyreinforcing programs, especially as the EGPRC was refocused in May 2009 on structural reforms 

critical to the success of the fiscal consolidation effort. Key areas of mutual interest were public 

sector and energy reform. In the former, the Bank has taken the lead in providing technical 
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assistance on reforming the public sector wage structure, while the Fund program focuses on 

strengthening payroll monitoring systems. On energy policy, the Fund program focuses on 

ensuring market-based, cost recovery pricing to avoid budgetary subsidies, while the Bank 

EGPRC focuses on the plans for restructuring the energy utilities. 

UKRAINE

With the intensification of the global financial crisis during the last quarter of 2008 a range of 

pre-existing macroeconomic risks in Ukraine materialized including external financing risks, 

banking sector vulnerabilities associated with the rapid credit growth, and terms-of-trade and 

external demand vulnerabilities mainly related to the metallurgy sector (with steel prices and 

demand collapsing) on the export side and the gas sector on the import side. Following many 

years of high growth, GDP is expected to contract by 14 percent in 2009. The downturn comes 

against the backdrop of a very difficult political environment. 

The Ukrainian authorities were quick to request assistance from the IMF and World Bank. The 

IMF Executive Board approved a $16.9 billion Stand-by Arrangement on November 5, 2008. 

The first review of the 18-month program was completed on May 8, 2009 and a total of $7.3 

billion has been disbursed so far. In the context of the program, the Fund has also been providing 

technical assistance to Ukraine on a wide range of issues including tax administration, debt 

management, bank recapitalization and resolution, monetary and exchange rate policies, private 

sector debt restructuring, and central bank independence. Likewise, the World Bank stepped up 

its activities in Ukraine around four key areas: (i) dialogue on key fiscal reforms such as 

pensions, energy, social assistance, and tax policy to enable a re-orientation of budget spending 

towards growth-enhancing expenditures while better targeting assistance to vulnerable groups; 

(ii) banking sector recapitalization and resolution, as a key to financial stabilization; (iii) 

structural reforms to enable business entry, export facilitation, and public sector reform to attract 

private investment; and (iv) direct infrastructure investments as instruments of job and demand 

creation. The first three areas of policy dialogue are being supported by budget support 

operations (planned at $1.25 billion in 2009), and the fourth through project lending (planned at 

roughly $1 billion in commitments in 2009-10). 

The Fund and the Bank have been working very closely and productively on the banking, fiscal, 

and structural reform agendas since the beginning of the crisis. Policy proposals on the fiscal 

side were designed and discussed jointly by the Bank and the Fund teams, with the objective of 

laying out a fiscal agenda that is appropriate for both the needed adjustment in the short term and 

for structural reform that would help ensure sustainability and expenditure efficiency in the long 

run. At the same time the proposals aimed at softening the shock for the most vulnerable 

population. Following a diagnosis of the banking sector condition, the Fund and the Bank teams 

designed together with the authorities a transparent framework to proceed with bank 

recapitalization and resolution. Jointly the teams also helped the authorities to put in place 

analytical, legislative, and administrative tools needed for these processes. More recently, and in 

the context of the structural problems in the energy sector the Bank and the Fund teams have 

jointly shaped a reform path, in consultation with the European Commission and other bilateral 

stakeholders. The collaboration is expected to remain close in Ukraine where the financing and 

advisory needs will likely remain large. 
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Managing Overlap

U.S. policy has sought to eliminate duplication of missions between the IMF and World Bank, 

by encouraging each institution to focus on its core mandate. For the IMF, we see that core 

mandate as primarily a question of supporting macroeconomic and financial stability through 

sustainable fiscal, monetary, exchange rate, and financial sector policies. On the other hand, the 

World Bank’s core mandate is to encourage poverty-reducing economic development through its 

provision of development assistance and policy advice. Along these lines, the U.S. was a strong 

supporter of the 2001 streamlining of IMF conditionality that sought to roll back the Fund’s drift 

into structural reform programs in areas where IMF macroeconomists have little experience or 

expertise. 

Nevertheless, the interrelated missions of the two institutions will inevitably give rise to some 

natural areas of overlaps. Financial sector policy and public financial management reform are 

examples of areas where neither institution can, or should, be excluded. In situations such as 

these, U.S. policy has been to encourage a reasonable division of labor between the institutions 

(i.e., in financial sector policy the IMF focuses on managing systemic financial risks, while the 

World Bank concerns itself with structural reform and the development impact of the financial 

sector) and then to look for sustained collaboration across institutions. 

Overlap between the two institutions is of particular concern in low-income countries, where 

World Bank budget support has a macroeconomic impact on fiscal and external sustainability 

and IMF concessional financing often provides fiscal financing (either directly or indirectly 

through the central bank) that is similar to budget support. To manage such situations, the U.S. 

supported a 2004 reform that requires an IMF assessment letter on macroeconomic policy for 

large World Bank budget support operations. On the IMF side, the U.S. has strongly advocated 

for a reform of the IMF’s concessional lending facilities that would move low-income countries 

away from prolonged use of IMF financing and make IMF assistance more episodic (e.g., in 

response to a terms of trade shock). 

Considerable progress has been made in recent years in focusing the IMF on its core areas of 

expertise, particularly in its work in low-income countries. The IMF’s review of its 

conditionality in 2000 culminated in the Executive Board’s adoption of revised guidelines on 

conditionality in 2002 that stressed a sharper focus on core macroeconomic issues.11 In response 

to an Independent Evaluation Office review of structural conditionality, in 2008 the Executive 

Board adopted stricter requirements on structural conditionality, whereby IMF staff must provide 

a clear macroeconomic rationale for binding structural conditions. 

                                                           

11 http://www.imf.org/External/np/pdr/cond/2002/eng/guid/092302.htm
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II. IMF Oversight and Accountability

The U.S. continues to push for an IMF that is open, transparent, accountable for its actions, and 

reflects the current global economy. A number of key reforms in recent years have increased the 

IMF’s accountability. 

Independent Evaluation Office

The Independent Evaluation Office (IEO) of the IMF was established in 2001 to conduct 

independent and objective evaluations of Fund policies and activities on issues relevant to the 

mandate of the Fund.12 The United States has been a strong advocate of the IEO since its 

inception, believing that independent evaluations are essential to achieving IMF accountability 

and improving the quality and effectiveness of IMF interventions. 

The IEO is independent from IMF management and operates at arm’s length from the Board of 

Executive Directors. The IEO’s mission is to improve the IMF’s effectiveness by enhancing the 

learning culture of the IMF and enabling it to better absorb lessons for improvements in its future 

work; helping build the IMF's external credibility by undertaking objective evaluations in a 

transparent manner; providing independent feedback to the Executive Board in its governance 

and oversight responsibilities over the IMF; and promoting greater understanding of the work of 

the IMF. 

On average, the IEO concludes two or three evaluations per year, and each evaluation normally 

takes about 18 months to complete. Recent evaluations include IMF Involvement in 

International Trade Policy Issues (June 2009);13 Governance of the IMF: An Evaluation (May 

2008);14 Structural Conditionality in IMF-Supported Programs (January 2008);15 IMF Exchange 

Rate Policy Advice, 1999-2005 (May 2007);16 and The IMF and Aid to Sub-Saharan Africa

(March 2007).17 

The United States has strongly supported IEO consultation with the public in developing and 

executing its work plan. IEO evaluations rely on consultation with a variety of actors, including 

IMF staff, member country officials, international and regional organizations, market 

practitioners and other private sector participants, academics and representatives of civil society. 

In addition, IEO reports have, on occasion, encouraged a framework for the IMF’s interaction 

with outside participants. For instance, the IEO report on Aid to Sub-Saharan Africa called on 

IMF Management to “clarify expectations— and resource availabilities—for resident 

representatives’ and missions chiefs’ interactions with local donor groups and civil society.” 

                                                           

12 http://www.imf.org/external/np/eval/2001/103101.htm 13 http://www.ieo-imf.org/eval/complete/pdf/06162009/Full_Text_of_the_main_report.pdf 14 http://www.ieo-imf.org/eval/complete/pdf/05212008/CG_main.pdf 15 http://www.ieo-imf.org/eval/complete/pdf/01032008/SC_main_report.pdf 16 http://www.ieo-imf.org/eval/complete/pdf/05172007/ERP_main_report.pdf 17 http://www.ieo-imf.org/eval/complete/pdf/03122007/report.pdf
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Transparency

Until the mid-1990s, the Fund published few of the reports prepared for the Executive Board. 

From 1994 onward, the Fund began authorizing the publication of an ever greater number of 

internal documents, beginning with background papers to surveillance reports and gradually 

extending this policy to country policy intention documents and all staff reports. However, as of 

2001, public release of Article IV Staff Reports and IMF program documents was strictly 

voluntary, based on the member country’s consent. 

With strong advocacy from the United States, the IMF made significant improvements to its 

transparency policy in the period from 2002-2003, culminating in a new transparency framework 

approved in 2004.18 The framework calls for the publication of the vast majority of Fund 

documents, subject in the case of country papers to the member county’s consent, regular 

reporting on ongoing trends on publication, and ongoing reviews of the policy itself. The Board 

will consider its next review of the IMF transparency policy late in 2009 and the IMF is currently 

seeking input on the transparency policy from civil society organizations, financial market 

participants, and academics.19

Release of Article IV Staff Reports is “voluntary but presumed.” Release of program documents 

is also “voluntary but presumed,” but the Managing Director will not seek Board approval for a 

PRGF program or HIPC debt relief unless the country has agreed to publication, and generally 

will not recommend approval of exceptional access to a program unless the country agrees to 

publish the related staff report. In practice, this means the vast majority of IMF program 

documents become part of the public domain. Countries retain the right to delete highly marketsensitive material prior to a document’s release. 

Public Information Notes are published on all country issues, the vast majority of which are fair 

summaries of the Board discussion (but without attribution to individual speakers). Board 

minutes and summings up of Board meetings are available after 10 years. 

At the time of the 2005 review of the IMF’s transparency policy, the Board asked for regular 

reporting on the trends in the implementation of this policy.20 The February 2009 report 

demonstrates significant improvement: the percent of Article IV reports and program documents 

published has risen from 41% in 1999-2001 up to 87% in 2008. Every current IMF borrower has 

publicized its Staff Report. Moreover, Public Information Notices are now produced in 97% of 

Article IV discussions, up from 82%. 

The IMF has also increased its engagement with civil society organizations in recent years as 

part of its focus on transparency and open dialogue. In 2003, the IMF released a Guide for Staff 

Relations with Civil Society Organizations to IMF staff that stressed the importance of 

incorporating civil society input into policy making at both the global and individual country 

level.21 At the global level, civil society views are regularly incorporated into IMF reviews of its 

                                                           

18 http://www.imf.org/external/pubs/ft/sd/index.asp?decision=13564-(05/85)

19 http://www.imf.org/external/np/pdr/trans/2009/index.htm 20 http://www.imf.org/external/np/pp/eng/2005/052405.pdf 21 http://www.imf.org/external/np/cso/eng/2003/101003.htm
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policies and lending practices (such as in the Civil Society Policy Forum – organized jointly with 

the World Bank during the Annual and Spring Meetings) to solicit ideas and input from civil 

society organizations. At the country level, IMF country teams make it a practice to meet with 

civil society organizations as part of their surveillance and program missions. 

The United States was a strong advocate for transparency from the very start. The U.S. 

continues to support further progress, both in disclosure of basic surveillance documents and in 

more prompt publication of the Fund Board’s minutes. 

We also have encouraged the Fund to reach out to ensure that external stakeholders’ voices are 

heard on IMF policy and country issues. We have taken note of NGO calls for the IMF to make 

draft policy papers and technical assistance (TA) reports public, and to engage in broader 

consultations with external stakeholders. The U.S. supported presumed dissemination of TA 

reports to donors and IMF Board members. We also supported public disclosure of TA reports, 

but getting a majority for that will be a longer-term effort. We have strongly advocated that the 

IMF consult with external stakeholders such as through outreach by the Fund’s Independent 

Evaluation Office. On country matters, we support IMF staff consultations with external 

stakeholders including legislatures and civil society, while recognizing that IMF staff resources 

are finite and that some country-specific policy consultations must necessarily be confidential. 

Anti-Corruption Efforts

The IMF has established, revised and strengthened a framework to ensure that the Fund’s 

resources are used for their intended purposes. This framework includes a variety of 

components, including: Safeguards Assessments; Guidelines on Misreporting; Codes of Conduct 

for staff and Executive Directors; and whistleblower protections, including an Ethics Office and 

Ombudsman. The United States has frequently championed these improvements, using our 

voice at the IMF as well as through the G-7 and other consultations. 

One of the IMF’s most effective tools against corruption is the Safeguards Assessment to prevent 

possible misuse of IMF resources and misreporting of information.22 All countries that request a 

loan from the IMF must agree to undergo a Safeguards Assessment. Its purpose is to identify 

vulnerabilities in a central bank’s control systems. IMF staff carry out this diagnostic exercise to 

consider the adequacy of five key areas of control and governance within a central bank: (i) the 

external audit mechanism; (ii) the legal structure and independence; (iii) the financial reporting 

framework; (iv) the internal audit mechanism; and (v) the internal controls system. The 

framework was introduced in March 2000 and reviewed in April 2005. As of mid-June, 2009, 

169 Safeguard assessments have been completed. 

Reliable and timely information is essential for all aspects of the Fund's work. Poor data can 

lead to inaccurate assessments, and inappropriate policy advice and program design. The Fund's 

"misreporting framework" is comprised of various provisions of its Articles of Agreement and 

policies. The principal pillars are (i) Article VIII, Section 5, which applies to all members and 

contains general requirements on the furnishing of information by members to the Fund, and (ii) 

                                                           

22 http://www.imf.org/external/np/tre/safegrds/2002/review.htm
12

taliation. 

the "Misreporting Guidelines" which address misreporting in the context of Fund 

arrangements.23 Other policies, such as those related to the use of HIPC resources, the Policy 

Support Instrument, and publication, also contain specific provisions on misreporting. 

Several episodes of egregious misreporting in the late 1990s led the Fund to adopt a firmer 

stance on misreporting. In particular, the Misreporting Guidelines were amended to: (i) lengthen 

from two to four years the period during which the Fund may take action with respect to 

misreporting (the “limitation period”); (ii) subject reporting on specified prior actions to the 

Misreporting Guidelines; and (iii) grant waivers only on condition that the information provided 

to assess the performance criterion (or other relevant performance conditions) is accurate. It was 

also decided that all cases of misreporting would be made public. Countries misreporting 

information can also be required to pay back any disbursements of IMF financing received using 

falsified information within 30 days. 

As the IMF works to promote good governance in its member countries, it has strengthened 

internal controls to prevent conflicts of interest. The Fund’s Code of Conduct for Staff dates 

from 1998, including financial certification and disclosure. A parallel Code of Conduct for 

Executive Board members dates from 2000 and was revised on December 12, 2003. In 2000, the 

Fund created the Ethics Office, with the Ethics Officer reporting directly to the Managing 

Director for no more than a five year term. The Ethics Officer provides advice to Fund staff on 

ethics and staff rules, promotes ethical awareness, and conducts confidential investigations into 

allegations of unethical behavior and/or misconduct. The Ethics Officer has prepared Annual 

Reports in 2007 and 2008 and they are available on the IMF’s external website.24 

In 2008, the Fund also established a confidential Integrity hotline for handling allegations of staff 

misconduct, whether on an anonymous or identified basis, and whether from internal or external 

sources.25 The hotline can receive reports via a telephone hotline or via the internet. 

Individuals who report suspected misconduct in good faith are fully protected from any form of 

re

IMF Governance Reform 

The U.S. has repeatedly advocated quota reform to align country representation with global 

economic realities and to create a more streamlined, transparent method of determining quota

Maintaining a strong voice for low-income countries has also been a priority for the U.S. In 

2006, the U.S. endorsed a fundamental overhaul of quotas to better align the IMF’s governanc

structure with the rapid growth and increasing significance of dynamic emerging economies. 

Over the next two years, the U.S. continued to push for quota reform to provide emerging market 

countries greater representation, in line with their increasing weights in the global economy, an

to protect low-income countries’ voice and vote. The

s. 

e 

d 

 U.S. also actively promoted a shift to a 

ore modern and straightforward quota calculation.

                                                           

m

23 http://www.imf.org/external/pubs/ft/sd/index.asp?decision=7842-(84/165) 24 http://www.imf.org/external/hrd/eo/ar/2008/etoar08.pdf, http://www.imf.org/external/hrd/eo/ar/2007/etoar07.pdf 25 http://www.imf.org/external/hrd/integrity/index.htm
13

                                                           

In April 2008, after protracted negotiations, the IMF membership reached agreement to reform 

IMF quotas.26 The 2008 IMF reform package includes (i) a new formula as the basis for 

determining country quotas, giving significantly more weight to GDP and thus better reflecting 

countries’ relative weights in the global economy; (ii) a tripling of the basic votes of each 

member, which will boost the voice of the poorest countries, and provide an additional Alternate 

Executive Director for two sub-Saharan African chairs in the IMF Executive Board to enhance 

these countries’ capacity for more effective representation, and (iii) a quota increase targeted at 

the most under-represented countries. Under the reform, 54 countries, including the United 

States, will be eligible for specified ad hoc increases in their quotas. The United States would 

have preferred a stronger reform then the result reached in 2008, and the Administration now is 

committed to seeking further quota realignment in the future. 

 

A strong and effective IMF Executive Board is firmly in the interest of the United States and the 

international community. To improve the effectiveness of the IMF Executive Board, the U.S. has 

called for a smaller Executive Board, reducing the number of chairs in the IMF Board from 24 to 

22 seats in 2010, and to 20 seats in 2012, while preserving the existing number of emerging 

market and developing country chairs. The U.S. has also advocated a more independent and 

strategic role for the Executive Board. 

 

26 http://www.imf.org/external/pp/longres.aspx?id=4242