Legislators and the IMF
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Outreach to Parliamentarians
- Legislators and members of Parliament (MPs) play a critical role in budget oversight, passing legislation that have significant economic impact and holding governments to account on behalf of citizens.
- Legislators are critical partners in building political support for implementing economic policy.
- Meetings with MPs help IMF staff better understand the concerns of member countries and to discuss best practices in economic policymaking.
- The IMF regularly meets with legislators and MPs in the context of its surveillance activities and by hosting regional workshops.
- The IMF jointly hosts meetings of the Parliamentary Network of the World Bank and the IMF during the Spring and Annual Meetings.
- The Fund engages with legislators on issues including fostering inclusive growth, fiscal transparency and good governance, and energy subsidy reform.
Inclusive Growth
- IMF research has shown that persistently high inequality is associated with lower, less durable economic growth and greater financial instability.
- Fostering inclusive growth requires policies that boost productivity while carefully managing tradeoffs between growth and inequality.
- Practical policy measures discussed include:
- productive infrastructure investment,
- promoting financial inclusion,
- policies that facilitate female labor force participation.
- Well-designed fiscal policy with progressive taxes and strong social safety nets can help mitigate tradeoffs between growth and inequality.
Fiscal Transparency
- Fiscal transparency is the publication of reliable, timely information on how governments raise taxes, borrow, spend, invest, and manage public assets and liabilities.
- Fiscal transparency requires clarity, reliability, timeliness, and relevance of public reporting on the state of public finances.
- Benefits of fiscal transparency:
- Ensures governments have an accurate picture of their finances when making economic decisions,
- Provides legislatures, markets, and citizens with the information needed to hold governments accountable.
Governance and anti-corruption measures
- Corruption undermines the public’s trust in its government, threatens market integrity, distorts competition, and endangers economic development.
- The IMF covers economic governance issues within its mandate in surveillance, lending, and technical assistance, concentrating on issues likely to have a significant impact on macroeconomic performance and authorities’ ability to pursue sound economic policies.
- The IMF assists in strengthening countries’ capacity to combat corruption by advising on appropriate anti-corruption legal frameworks.
Energy subsidies
- Universal energy subsidies have substantial drawbacks:
- Tend to benefit the rich more than the poor,
- Crowd-out priority public spending,
- Depress private investment,
- Encourage excessive energy consumption,
- Artificially promote fossil fuel industries,
- Reduce incentives for investment in renewable energy,
- Accelerate the depletion of natural resources.
- Successful reform to domestic fuel and energy pricing requires a comprehensive strategy.
- Country experiences suggest the following key elements of effective reform:
1. phased and gradual price increases; 2. (s) targeted social spending or essential investment to mitigate the impact of the reform on affected households and firms; 3. introduction of an automatic pricing formula; 4. clear communications on the objectives and benefits of reform; and, 5. accompanying measures to improve the efficiency of state-owned enterprises and service delivery.
Recent Events
- October 2019: Global Parliamentary Workshop at the Annual Meetings
- Some 50 Parliamentarians held a workshop on ‘Fighting Inequalities in a Shifting Global Landscape’ at the 2019 Annual Meetings in October.
- IMF Deputy Managing Director Tao Zhang spoke with MPs about policy advice to promote an inclusive growth agenda.
- Sessions included Global Shifts and Inequality and Taxation as a Tool to Reduce Inequality.
- MPs emphasized the importance of education, and fighting corruption and gender inequality; discussed the role of international taxation in ensuring equality, the effectiveness of tax incentives for investment, and the importance of good governance for tax compliance.
- September 2019: Workshop for MPs from French-Speaking West Africa
- Thirty-two MPs from West Africa met in Abidjan for a three-day workshop at the IMF’s African Technical Assistance Center (AFRITAC).
- IMF staff and MPs discussed financial sector development to promote inclusive growth, revenue mobilization, and policies to fight corruption.
- April 2019: Global Parliamentary Conference of the Parliamentary Network
- Some 150 parliamentarians gathered in the days leading up to the IMF/World Bank Spring Meetings for a conference on the theme of ‘Achieving the 2030 Agenda in the New Economy.’
- The heads of the IMF and World Bank addressed MPs in a special session about sustainable, inclusive growth.
- April 2019: Workshop for MPs from Emerging Europe
- A workshop at the Joint Vienna Institute brought together about 20 parliamentarians from Central and Southern Eastern Europe to discuss the Fund’s new governance framework and economic prosperity.
- Participants discussed the role of MPs in fiscal transparency, measures to prevent money-laundering and terrorist financing, and the footprint of state-owned enterprises in the region.
- Discussions covered measures to create quality jobs and how to attract FDI.
- March 2019: Workshop for South Asian MPs
- Around 20 MPs from Sri Lanka, Bhutan, Nepal, Bangladesh and India participated in a workshop at the South Asia Regional Technical Assistance Center in New Delhi.
- Participants engaged on best practices in revenue mobilization, monetary policy, regional integration, and public financial management.
Content in this bundle
- Managing Director's Letter to Legislators, May 2020