## 2011 Triennial Surveillance Review - External Commentary - A Short Note on Surveillance and How Reforms in Surveillance Can Help the IMF to Promote Global Financial Stability

_Policy Papers, July 22, 2011_

## Source details

**Canonical URL:** [2011 Triennial Surveillance Review - External Commentary - A Short Note on Surveillance and How Reforms in Surveillance Can Help the IMF to Promote Global Financial Stability](https://www.imf.org/en/publications/policy-papers/issues/2016/12/31/2011-triennial-surveillance-review-external-commentary-a-short-note-on-surveillance-and-how-pp4600)

## Other formats

- [Markdown version](/en/publications/policy-papers/issues/2016/12/31/2011-triennial-surveillance-review-external-commentary-a-short-note-on-surveillance-and-how-pp4600/index.md)
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## Bibliographic details
- Published: July 22, 2011
- Series: Policy Papers

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### Overview
- Commentary prepared by Joseph E. Stiglitz, University Professor, Columbia University.
- Date of publication: July 22, 2011.
- Core focus: the role of IMF surveillance in promoting global economic stability and the shortfalls in achieving its objectives.
- Subject areas listed: Corporate governance; Financial crisis; Financial stability; Fund role; Global Financial Crisis 2008-2009; Surveillance.

### Key findings
- Surveillance is widely viewed as a key instrument by which the IMF ensures member states adhere to policies that promote global economic stability and enable global macroeconomic coordination necessary for economic stability.
- There is widespread agreement that major shortfalls exist in achieving the objectives of IMF surveillance.
- Part of the problem is perceived lack of incentives for countries—notably those not borrowing from the Fund—to comply with IMF advice that would achieve global stability.

### Mechanisms by which surveillance can affect global stability
- If IMF surveillance impacts global stability (as distinct from the well-being of particular countries), it operates primarily through two channels:
  - (i) A process of consensus building in which actions that countries might previously have thought not to be in their interest are recognized as being in their national interest.
  - (ii) A sufficiently large number of small, individually systemically insignificant countries being affected in a meaningful enough way so as to generate systemically significant effects.

### Challenges highlighted
- Lack of binding incentives for non-borrowing countries to follow IMF policy advice.
- Systemically significant countries are often among those that do not borrow from the Fund, limiting direct leverage through conditionality.
- The gap between the IMF's stated objective—to provide "the machinery for consultation and collaboration on international monetary problems"—and practical effectiveness of surveillance.

### Implicit policy implications and reform priorities
- Strengthen consensus-building mechanisms so that IMF surveillance more effectively aligns national interests with global stability objectives.
- Enhance the influence of IMF surveillance on non-borrowing, systemically significant countries through improved persuasive strategies, coordination efforts, or institutional reforms that increase uptake of surveillance advice.
- Consider approaches that increase the systemic impact of surveillance on many smaller countries collectively.

*Commentary prepared by Joseph E. Stiglitz, University Professor, Columbia University.*

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## Content in this bundle

- **_072211 - Broadening coverage of surveillance; Broadening participation in surveillance**
  - [_072211 - Broadening coverage of surveillance; Broadening participation in surveillance (Markdown version)](/-/media/websites/imf/imported-full-text-pdf/external/np/pp/eng/2011/_072211.pdf.md){rel="alternate" type="text/markdown"}
  - [_072211 - Broadening coverage of surveillance; Broadening participation in surveillance (PDF)](/-/media/websites/imf/imported-full-text-pdf/external/np/pp/eng/2011/_072211.pdf){rel="external" type="application/pdf"}

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_Source: https://www.imf.org/en/publications/policy-papers/issues/2016/12/31/2011-triennial-surveillance-review-external-commentary-a-short-note-on-surveillance-and-how-pp4600_