This document provides a country-by-country update on the implementation status of measures to promote good governance and transparency in pandemic-related spending that countries committed to take in the context of IMF financing during the pandemic.[1] Major progress has been made in implementing these measures, though further efforts are needed in some cases.
Promoting transparency and accountability in pandemic-related spending
Government spending has played a crucial role in combatting the pandemic and its economic fallout. To support the effectiveness of these efforts, it is critical that such spending be subject to adequate transparency and accountability. The IMF has called for such an approach, using the adage, “spend what you must, but keep the receipts.”
In line with this approach, countries receiving IMF financing during the pandemic committed to implement measures to promote good governance and transparency. These measures are tailored to country-specific circumstances and typically include actions such as (i) publishing information on pandemic-related procurement contracts, (ii) publishing the beneficial owners of companies awarded these contracts,[2] (iii) publicly reporting on pandemic-related spending, and/or (iv) undertaking and publishing ex-post audits of such spending.
In addition, all recipient countries commit to undertake a Safeguards Assessment—a due diligence exercise aimed at ensuring that a country’s central bank is able to provide reliable information and transparently manage the funds that it receives from the IMF.
More generally, IMF work in this and related areas continues to be guided by the 2018 Framework for Enhanced Fund Engagement on Governance.
Are governance measures being implemented?
Following the update in May 2021, the table below provides a country-by-country update on (i) commitments to promote good governance and transparency in pandemic-related spending that countries made in their Letter of Intents (LOIs) and Memorandums of Economic and Financial Polices (MEFPs) that accompanied IMF financing during the pandemic[3] and (ii) the implementation status of these commitments as of May 17, 2022.[4]
Overall, important progress has been made in implementing these commitments, especially in countries with IMF-supported programs, which typically span multiple years and aid policy implementation. Another factor affecting the differing degree of implementation across the 73 countries covered is that some measures have been the continuation, during the crisis, of existing practices (e.g., reporting on spending), while others have been novel (e.g., publication of beneficial ownership information or emergency spending audits) for many countries. In the latter case, the measures require the building and strengthening of institutions and processes, which takes time and can face resistance. The positive side of this coin is that the implementation of these measures in such cases not only increases transparency and accountability in the pandemic response, but also creates processes, strengthens institutions, and provides experience on which countries can build to enhance governance and accountability more broadly going forward.
Broad trends across different types of measures include the following:
Continued efforts are needed to promote good governance and transparency
To make progress toward good governance and transparency, country authorities have often embraced innovative practices. For example, the publication of procurement contracts or beneficial ownership information had previously not been common practice in many countries. Likewise, the production and publication of timely audits of COVID-related spending has improved accountability. The efficacy of these measures underscores the importance of ongoing efforts to further their implementation in cases where this has been incomplete. It also points to the importance of strengthening audit institutions and procurement and beneficial ownership transparency for all types of spending as a matter of standard procedure, so that strong transparency and accountability mechanisms are at work in both good times and bad.
More generally, addressing corruption requires persistence. Although these pandemic-related measures are important, they only go so far in addressing deeper governance challenges. Longer-term governance and corruption vulnerabilities will continue to be addressed under the IMF’s broader 2018 Framework for Enhanced Fund Engagement on Governance. Recent governance and anti-corruption reforms in the context of multi-year lending arrangements include fiscal governance reforms in countries such as Ecuador, The Gambia, Jordan, Liberia, Rwanda and Senegal; strengthening of anti-corruption, rule of law, and anti-money laundering frameworks in Angola, Ecuador, Republic of Congo, Moldova, Pakistan and Suriname; and financial sector oversight and central bank governance reforms in Liberia and Ukraine, among others.
Moreover, IMF staff have delivered governance diagnoses for several member countries, upon their request, or supported countries in producing their own diagnoses. These governance diagnostic reports are in-depth, country-tailored assessments of corruption and governance vulnerabilities that draw heavily on local knowledge and expertise and provide a prioritized and sequenced blueprint of measures to address these vulnerabilities.[5]
Efforts to enhance governance will depend even more crucially on political ownership of reforms by country authorities, further international cooperation to make it more difficult to launder the proceeds of corruption abroad, and joint efforts with civil society, the private sector, and other stakeholders to promote accountability and transparency. Such efforts should be pursued vigorously, as they are essential for fostering stronger and more inclusive economic growth.
[1] Information is as of May 17, 2022, unless stated otherwise. The update covers governance commitments related to pandemic-related spending in Letters of Intent and Memorandums of Economic and Financial Policies accompanying IMF financing during the COVID-19 pandemic. The update covers commitments made in the context of IMF financing provided (i) by Rapid Credit Facilities or Rapid Financing Instruments for which the COVID pandemic was a primary basis for the urgent BOP need and/or (ii) under regular IMF-supported programs through April 2021 (i.e., roughly the first year of the pandemic).
[2] Collecting and publishing information on the beneficial ownership of companies that receive procurement contracts is a measure that aims to deter corruption, including by facilitating the detection of potential conflicts-of-interest involving public officials. This innovative measure requires bidding companies to provide the names of the people with effective control over the company—i.e., its “beneficial owners”. This information is provided to the procurement agency, which must publish it.
[3] The table also reports on some measures that countries receiving IMF financing have proactively taken to increase transparency and of beneficial ownership information in public procurement and/or publish independent audits of COVID-related spending even if these countries did not explicitly commit to these measures in the context of IMF emergency financing.
[4] Implementation of commitments is assessed based on the wording of the member’s commitments. Within this, the quality and continuity of implementation varies across countries. For example, the quality of audits of pandemic-related spending varies across countries that have met their commitment to undertake and publish these audits. Similarly, the amount of detail on procurement contract information that is published varies substantially across countries. Implementation is as of May 17, 2022, unless otherwise noted.
[5] Links to published governance diagnostics are on the bottom-left corner of the IMF’s Governance and Anti-corruption page.
