## PROGRESS REPORT TO THE IMFC ON THE ACTIVITIES OF THE INDEPENDENT EVALUATION OFFICE OF THE IMF April 14, 2020

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### Overview
- During the five months after the 2019 Annual Meetings, the IEO:
  - completed two reports,
  - continued work on two ongoing evaluations,
  - launched one new evaluation.
- The IMF made progress in following up on past IEO evaluations, including completion of a triage exercise aimed at dealing with the backlog of off-track actions.
- IEO work plans are being affected by the coronavirus pandemic: planned IEO engagement with the Board has been delayed and the schedule for ongoing and new evaluations has to be extended.
- The IEO will continue to advance its work program as best it can within the new constraints.

### IMF Involvement in International Trade Policy Issues
- In December 2019, the IEO released an Evaluation Update Report revisiting its 2009 evaluation of IMF Involvement in International Trade Policy Issues.
- Key findings:
  - The IMF responded impressively to fundamental changes in the international trade policy environment since 2009, particularly the rise in trade tensions that clouded the economic outlook.
  - The Fund’s attention to trade policy issues expanded significantly in bilateral and particularly multilateral surveillance during the ten-year period, notably for countries with the largest shares of global trade.
  - The Fund became a leading champion of an open, rules-based multilateral trading system.
  - Notwithstanding these efforts, the global trade environment has remained under stress.
- Conclusions and recommendations:
  - The update concluded that the Fund should sustain its current high level of attention to trade policy issues and consider how to increase the overall impact of this work.
- Management and Board reaction:
  - The Managing Director welcomed the finding that the IMF’s trade work remains generally well-aligned with the Fund’s mandate and comparative advantage, and agreed that remaining challenges need continued attention and collective commitment.
  - The Executive Board welcomed the report and asked staff to consider its conclusions as part of the upcoming review of trade developments.

### Bank-Fund Collaboration
- The IEO completed its evaluation of IMF Collaboration with the World Bank on Macro-Structural Issues under an abbreviated timetable.
- Scope and focus:
  - Assessed effectiveness of collaboration with the World Bank, focusing on IMF pilot initiatives to enhance coverage of inequality, gender, energy/climate, and macro-structural reform in Article IV surveillance.
- Key findings:
  - Overall IMF collaboration with the Bank on macro-structural issues had been broad but uneven.
  - Informal consultation was widespread, but initial aspirations that the Fund would be able to systematically leverage Bank expertise proved over-optimistic.
  - Collaboration can bring significant benefits to the quality and influence of Fund work but also poses challenges.
- Recommendations:
  - Develop and agree on concrete frameworks to ensure effective collaboration with the World Bank on key macro-structural issues where collaboration is judged to bring the greatest strategic returns (such as climate).
  - Improve internal incentives.
  - Work with the World Bank to improve access to and exchange of information and knowledge.
  - Strengthen the strategic role of the Executive Board in facilitating and supporting external collaboration.
- Next steps:
  - The evaluation, intended to feed into the Comprehensive Surveillance Review, will be considered by the Executive Board once normal Fund activities resume.

### Unconventional Monetary Policy
- The Executive Board has approved a management implementation plan (MIP) to follow up on the IEO evaluation of IMF Advice on Unconventional Monetary Policies.
- The MIP includes a wide-ranging set of initiatives, many already underway.
- Identified actions aim to:
  - strengthen in-house expertise on monetary policy;
  - deepen research and external consultations on monetary policy issues;
  - further strengthen spillover analysis;
  - explore ways to strengthen traction of IMF policy advice in these areas.

### Addressing the backlog of off-track actions
- In February, the Executive Board discussed the 10th Periodic Monitoring Report (PMR) and a second report on Categorization of Open Actions in MIPs based on a framework agreed in 2019.
- The PMR was discussed by the full Board, following through on a recommendation of the Third External Evaluation of the IEO.
- Directors’ observations and decisions:
  - Directors welcomed strong progress in implementing actions to follow up on recent IEO evaluations.
  - Noted that 24 actions from earlier evaluations faced implementation challenges and were considered to be off-track.
  - Broad support for staff proposals in the categorization paper to address the backlog of off-track actions.
  - Agreed that nine actions would be retained for monitoring under the PMR, of which eight would be reformulated; new MIPs for these actions are to be submitted to the Board within six months.
  - Fifteen actions were removed from PMR monitoring either because they involved long-term technical or cultural change, or had been superseded by broader workstreams or more recent MIPs.
  - Directors stressed that most of these actions remain highly relevant for the Fund and looked forward to further progress in their implementation through other workstreams subject to robust Board oversight.

### IEO work program
- The IEO has a full work program, but scheduling is being impacted by the current crisis.
- Current evaluations in progress:
  - Evaluation of IMF advice on capital flows: now in its final stages; will assess the value added and influence of Fund work on capital flows for its member countries and for the global monetary system.
  - Evaluation of adjustment and growth in IMF-supported programs: will assess how well IMF-supported programs have helped to sustain economic growth while delivering necessary adjustment for external viability.
  - Launched an evaluation of IMF engagement with small states.

*Source: PROGRESS REPORT TO THE IMFC ON THE ACTIVITIES OF THE INDEPENDENT EVALUATION OFFICE OF THE IMF, April 14, 2020*

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_Source: https://www.imf.org/-/media/files/publications/pp/2020/english/ppea2020021.pdf_