microeconomic data. enhancing the use of existing data, methodologies, and the skilled personnel that are employed both inside and outside policy institutions should thus be a priority. both academics and policymakers would benefit from engaging in better policy evaluations. academia could engage in developing methodologies and in studying designs that contribute to societal welfare without compromising on academic rigor. policymakers could draw on the rich expertise that is available and make better use of existing infrastructures. moreover, some of the mechanisms that have been developed in academia to mitigate misaligned incentives and ensure transparency are readily applicable to policy evaluations. good policy evaluation needs to take incentives of the different stakeholders into account. for example, regulators have an incentive to overstate the “ success ” of reforms, industry has an incentive to focus on private costs, while academia has an incentive to focus on “ novel ” aspects. policy institutions may lack resources to govern the process. incentives can be managed according to the following three basic principles : 5 / 7 bis central bankers'speeches 1. transparency transparency is a precondition for a credible regulatory process. goals and concepts need to be well - defined. policy evaluation means being transparent about the goals of regulatory policies and what these policies have actually achieved. transparency can be accomplished by making information on evaluation studies, data ( data confidentiality permitting ), and codes available to relevant stakeholders. a centralized collection of evaluation studies can reduce the costs of obtaining relevant information for everybody. such a repository can improve transparency by making it easier and less costly for ( internal ) evaluators and external stakeholder to keep track of evaluation work. technical solutions can range from a website to more structured repositories. other fields, such as development economics or medicine often rely on repositories in order to structure available evidence. 4 replicability is an important element of transparency. replicability ensures that policy decisions are based on robust evidence and on results which survive changes in the set - up of the empirical model. this requires transparency about the models being used, access to data so that results can be replicated, and good documentation of the set - up of studies. many of the required protocols have been developed in academia and can be applied to policy work. at the same time, policy evaluation would benefit from a greater appreciation of replication studies in academic work. in order to ensure replicability, democratic data access is important. robust evaluations have to rely on a wide range of methods and good data. whenever possible,

stability. the critical feature of every program was a set of policy measures designed to address the causes of the crisis, to stabilize confidence and to put in place conditions for recovery. in some cases, the initial policy response looked tentative or inadequate. in others, the reform program did not appear to have broad support within the government. broader political uncertainty associated with a pending election or change in leadership also undermined confidence in the commitment to a credible recovery plan. where confidence in the recovery plan was weak, the financial resources had little impact on market sentiment and confidence faltered. even though the resources looked large relative to past financial interventions, they were easily overwhelmed when markets were unimpressed by the policy response. ernesto zedillo explained the policy challenge exceptionally well when he wrote that since markets tend to overreact at the onset of crisis, so policy needs to overreact too. a classic problem in financial crises is to distinguish between problems of illiquidity and insolvency. this diagnosis is critical to the design of an effective response, but it is very hard to do. we – in this case i mean the imf, its major creditors and the governments in the region – treated these cases as closer to the illiquidity extreme on the continuum, rather than to the insolvency extreme. in the asian crisis countries, unlike in russia or argentina, there was no plausible case for arguing that the sovereign governments had accumulated debts they were unable to repay. a forced restructuring of the external debt of a country or a forced suspension of payments on those obligations would have made the crisis in asia, and more broadly, substantially worse. these were not conditions of insolvency, but nor were they purely temporary liquidity problems that could have been addressed through the quick infusion of unconditional finance without any change in policies. the crisis economies all tried that strategy in the weeks and in some cases months before going to the imf for assistance. those strategies failed not simply because the governments ran out of reserves, but because they had failed to embrace a broader set of policy changes powerful enough to restore confidence in future stability and growth. it is worth emphasizing that the strategies ultimately adopted in each case were quite unorthodox and were certainly not uniform. besides the novel approach adopted in terms of the scale and structure of financing and the degree of international cooperation in support of the programs, the policy packages were also notable in the degree of emphasis placed on, for example, financial -