IMF Capacity Development

April 19, 2017

The IMF’s capacity development (CD) work is part of its core mandate, along with tracking global economic developments and lending to countries that experience balance of payment crises. It comprises economic institution building (technical assistance) and related human capacity development (training) to help governments build effective policies and institutions. The IMF’s CD efforts help countries strengthen their economies, improve inclusive growth and create jobs.

The IMF’s CD work focuses on building effective policies and institutions and strengthening related human capacities. This includes, for example, helping countries raise public revenues, modernize banking systems, develop strong legal frameworks, enhance the reporting of macroeconomic and financial statistics, and improve economic analysis and forecasting. The IMF works with government institutions, such as finance ministries and central banks, through hands-on advice, peer-learning workshops, and policy‑oriented training. The IMF’s CD support is delivered to countries in various ways, including through short-term staff missions from IMF headquarters, long-term in-country placements of resident advisors, regional capacity development centers, and global thematic funds . Bilateral and multilateral partners play a vital role in meeting the demand for IMF CD and presently finance about one half of the IMF’s efforts. The IMF Executive Board reviews the CD strategy periodically; the next review is scheduled to take place in 2018.

All members of the IMF benefit from capacity development

The IMF’s CD efforts are demand-driven—initiated by the member countries—and support has been provided to all 189 members. Building human and institutional capacity within a country helps the government implement more effective policies, leading to better economic outcomes. In FY 2016, low-income developing countries received about half of all IMF technical advice, versus about 40 percent for emerging market and middle‑income countries, which received the largest share of IMF policy‑oriented training (just over half).

Capacity development is integrated with IMF surveillance and lending

CD is an important complement to the IMF’s other core mandates of surveillance and lending. For example, working directly with member governments to help improve their policies and processes through CD helps increase the understanding and usefulness of IMF policy advice in the country, keeps the institution up-to-date on innovations and risks to the global economy, and helps address crisis-related challenges and spillovers. On the other hand, the IMF’s surveillance and lending work may identify areas in which CD activities can have the biggest impact in a country. For instance, the IMF is actively involved in providing CD to boost inclusive growth and financial inclusion, and reduce external vulnerabilities.

The IMF’s CD efforts focus on the following areas of core competency:

  • Fiscal Policy: Advising governments on how to raise revenues and effectively manage expenditure, including tax and customs policies, budget formulation, public financial management, domestic and foreign debt, and social safety nets. This enables governments to provide better public services such as schools, roads and hospitals.

  • Monetary and Financial Sector Policies: Working with central banks to modernize their financial systems — such as exchange rate, inflation and debt policy — and their banking supervision. This improves the country’s financial stability, fueling domestic growth and international trade.

  • Legal Frameworks: Helping countries align their legal and governance frameworks to international standards so they can develop sound fiscal and financial reforms, fight corruption and combat money laundering and terrorism financing.

  • Statistics: Helping countries with the compilation, management and reporting of their macroeconomic and financial statistics. This provides more accurate understanding of their economy and helps formulate more informed policies.

    In addition, the IMF provides a broad array of training courses, including on macro‑financial linkages, monetary and fiscal policy, balance of payment issues, financial markets and institutions, and statistical and legal frameworks. The IMF has redesigned its training curriculum and course offerings for CY2017, aimed at helping countries achieve macroeconomic stability and sustainable growth. The IMF’s training courses are advertised a year ahead in its online catalog.The published catalog is supplemented with online course announcements that reflect reprioritization and changing demands.

    Training is administered both in-person or online . Hands-on, policy-oriented training is also delivered through regional capacity development centers. The IMF has significantly scaled up online learning as a vehicle to deliver training to government officials. Online courses are also being made freely available to the public through massive open online courses (MOOCs). Over 8,400 government officials (and 8,200 members of the public from 185 countries) have successfully completed an online course since the launch of the program in late 2013.

Monitoring of capacity development

The IMF is strengthening its results-based management framework to facilitate systematic planning and improved monitoring of CD activities. This is being complemented by a new common evaluation framework to improve the ability to measure and compare the performance of different kinds of technical assistance and training across the IMF.

Evaluation will help determine, for example, the degree to which technical assistance has improved macroeconomic stability, public finance management systems, the quality of economic statistics, and financial governance. Similarly, it will help determine whether training has improved job performance of government officials, and improved their ability to analyze economic developments and assess policy effectiveness.

The IMF will continue to rely on both external and internal evaluations to assess the effectiveness of its technical assistance and training. Evaluations are conducted mid-way through each regional center’s funding cycle and at the end of each course offering; they are consistently rated as either “good” or “excellent.” In a 2015 survey, 92 percent of responding agencies said that their staff values IMF training more than training by other providers on similar topics.