Governance and Anti-Corruption
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Overview
- Poor governance and lack of transparency increase incentives and opportunities for corruption—the abuse of public office for private gain—and undermine inclusive and sustainable growth.
- Corruption alters incentives of individuals entrusted with public authority, undermines state capacity to deliver growth and reduce poverty, corrodes business vitality, and stunts economic potential.
- The IMF emphasizes improving governance and fighting corruption as a means to achieve more inclusive and sustainable growth.
IMF Policy Framework on Governance
- The IMF adopted a policy on addressing economic governance in 1997 embodied in the Guidance Note “The Role of the IMF in Governance Issues”.
- The IMF adopted a new Framework for Enhanced Engagement on Governance (Governance Policy) in 2018 to promote more systematic, effective, candid, and evenhanded engagement with member countries on governance vulnerabilities—including corruption—critical to macroeconomic performance.
- The 2018 policy focuses on state functions most relevant to economic activity:
- (i) fiscal governance
- (ii) financial sector oversight
- (iii) central bank governance and operations
- (iv) market regulation
- (v) rule of law
- (vi) Anti-Money Laundering and Combatting the Financing of Terrorism (AML/CFT)
- The policy also addresses transnational aspects of corruption, particularly measures to prevent bribery of foreign public officials and services that facilitate concealment of corruption proceeds.
- A “2023 Review of the Implementation of the 2018 Framework for Enhanced Fund Engagement on Governance” finds Fund engagement broadly in line with its objectives and proposes measures to further strengthen engagement.
Governance Diagnostic Reports and Capacity Development
- Governance diagnostic reports are in-depth, country-tailored assessments of corruption and governance vulnerabilities that draw heavily on local knowledge and expertise.
- Diagnostics provide prioritized and sequenced recommendations as a key tool in the IMF’s capacity development efforts.
- More Governance Diagnostics are underway and are expected to be published upon completion.
Transnational Aspects of Corruption and Voluntary Assessments
- The IMF has urged members to voluntarily agree to have their systems assessed by the Fund in the context of surveillance on:
- anti-bribery frameworks (supply-side corruption)
- those aspects of AML/CFT frameworks that seek to curb concealment of proceeds of corruption by foreign officials
- Voluntary assessments of the framework to prevent supply-side corruption and cross-border facilitation have been covered in Article IV consultations of some advanced economies.
- Thirteen countries have volunteered and had their assessments included in their Article IV consultation reports:
- Austria
- Canada
- France
- Germany
- Italy
- Japan
- Czech Republic
- Saudi Arabia
- Switzerland
- The Netherlands
- Norway
- the United Kingdom
- the United States
Governance and Accountability During the COVID-19 Crisis
- The IMF’s response during the COVID-19 crisis included measures to promote good governance and transparency in pandemic-related spending tied to IMF financing.
- A third and final update on implementation found further progress since May 2022, including steps to publish beneficial ownership information for entities awarded procurement contracts and to conduct audits.
- Three years after most measures were committed to, the implementation rate has reached 80-90 percent, on average.
- Relevant documents and status updates include:
- Implementation of Governance Measures in Crisis-Related Spending (July 2023)
- Implementation of Governance Measures in Pandemic-Related Spending (May 2022)
- Governance Commitments in Letters of Intent for COVID19-Related Rapid Instruments
- Implementation Status of Governance Commitments on Crisis-Related Spending (May 2021)
- Factsheet: How the IMF is Promoting Transparent and Accountable Use of COVID-19 Financial Assistance
- Blog: Corruption and COVID-19 (July 2020) by Gaspar, Muhleisen, Weeks Brown
Key Publications and Findings
- Selected topical findings and commentary noted by the IMF include:
- “How the IMF is Promoting Transparent and Accountable Use of COVID-19 Financial Assistance” (factsheet)
- “How Does the IMF Encourage Greater Fiscal Transparency?” (factsheet)
- “Protecting IMF Resources - Safeguards Assessments of Central Banks” (factsheet)
- “IMF and the Fight Against Money Laundering and Financing of Terrorism” (factsheet)
- “The IMF and the Fight Against Illicit and Tax Avoidance related Financial Flows” (factsheet)
- “New Economics Books Explore Trade, Finance, and a Changing World Order” — August 6, 2026: Authors probe complex issues to shed light on global economic challenges
- “Latin America Can Boost Economic Growth by Reducing Crime” — December 18, 2023: Reducing crime could significantly boost investment, productivity, and GDP growth in Latin America and the Caribbean
- “Financial Crimes Hurt Economies and Must be Better Understood and Curbed” — December 7, 2023: Policymakers need fuller view of consequences of illicit flows, including tallies of the fiscal, monetary, financial, and structural costs
- “Money Laundering Poses a Risk to Financial Sector Stability” — September 4, 2023: Curbing cross-border illicit proceeds demands a united global effort and innovative approaches
- “Crypto Needs Comprehensive Policies to Protect Economies and Investors” — July 18, 2023: Establishing effective policies has become a priority for authorities amid the failure of some exchanges and collapse of certain crypto assets
- “New Worries for Central Bankers” — March 1, 2023: Issue of F&D exploring how inflation dynamics have forced a re-think of how central banks conduct monetary policy
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