Evaluation in the Fund

Making the IMF's Independent Evaluation Office (EVO) Operational A Background Paper
August 7, 2000

Press Release: IMF Executive Board Discusses Independent Evaluation Office
August 18, 2000

Concluding Remarks by the Chairman of the IMF Executive Board
Making the IMF's Independent Evaluation
Office Operational

Executive Board Meeting 00/81
August 3, 2000

Executive Directors welcomed the paper by the Evaluation Group and considered that the proposals were an important step forward in making the Fund's independent Evaluation Office (EVO) operational, following the April 2000 Executive Board decision to establish an EVO at the Fund. They fully supported the establishment of the EVO before the Prague Annual Meetings, and expected the office to be operational before the Spring 2001 meeting of the IMFC. Directors viewed the EVO as an important complement to the overall review and evaluation work undertaken in the Fund, which would enable the institution to better absorb lessons for improvements in its future work.

A key consideration in the discussion was how best to ensure that the work of the EVO will fully support the Executive Board's oversight role and contribute to transparency and the learning culture in the Fund. Various views were expressed on the nature of the evaluations to be undertaken and on the relation between the EVO's work and the other review and evaluation work undertaken by the Fund. Directors considered that the EVO should primarily cover issues related to general policies and their implementation, comparative cross-country analyses, and completed country operations. At the same time, there is broad agreement that the EVO must avoid interfering with ongoing operational activities, or micro-managing responsibilities in the institution. Policies and procedures under active discussion in the Fund and current Fund programs would not therefore be appropriate areas for EVO evaluation. As the EVO becomes fully operational and gains some initial experience, this issue will become clearer and easier to resolve. In any case, this issue will be reviewed again before final decisions on the EVO are made.

On the independence of the EVO, there is broad consensus that the EVO should be independent from Fund management and staff, and should operate at arm's length from the Board. This means that once established by the Board, the EVO must be operationally independent. The EVO will be expected to report fully on individual evaluations to the Executive Board, and to allow the Board, management, and staff an opportunity to comment on its assessments. The Board and management will be responsible for follow-up on the conclusions drawn by the Board from its consideration of the EVO's evaluation reports. In developing its work program and choosing evaluation topics, Directors expected that the EVO, while maintaining its independence, will seek the views of Executive Directors, management, staff, and interested parties outside the Fund. How the work program of the EVO will be given its final form is another operational issue to which Executive Directors will need to return.

Directors discussed the merits and disadvantages of developing a full-scale charter for the EVO to guide its work. They concluded that, on balance, a fully-elaborated charter risks imposing excessive rigidity on the EVO's work, especially at the outset. Accordingly, Directors agreed that the EVO should be guided by terms of reference, which should provide the safeguards on the EVO's independence that all Directors support, while not constraining the EVO's freedom of action unduly. The Board will establish such terms of reference in the period ahead.

There was broad consensus that the whole Board should continue to be involved with the EVO. A number of Directors considered that after the EVO becomes operational, the role of the Evaluation Group of Executive Directors may need to be re-examined.

The budget of the EVO will be determined annually by the Board, without intermediation by Fund management or staff. Regarding the size of the EVO, Directors generally supported the recommendation that it be limited to no more than 11 individuals. Many Directors suggested that initially the size of the office should be even smaller. There was broad agreement that the work of the EVO would be considerably enhanced by the fresh approach and perspective that individuals from outside the Fund would bring to bear. Accordingly, Directors suggested that external recruits and consultants should constitute a significant, if not the major, part of the EVO's staffing, thereby adding value to the institutional insight and experience that individuals drawn from the IMF staff would contribute. Directors supported the selection of the Director of the EVO by the Executive Board, assisted as appropriate by an external search firm. Once appointed, the Director of the EVO should be free to choose high caliber individuals to staff the EVO. Ultimately, of course, the success of the EVO will be assured by the professionalism and integrity of the Director of the EVO and its staff.

Directors were in favor of the EVO being fully accountable to the Executive Board, and expected the Director of the EVO to report regularly to the Executive Board. In addition, the IMFC would also expect to receive reports on the EVO's activities.

Directors were of the view that as a rule, EVO findings should be published, with appropriate safeguards for confidential material. Publication would be accompanied by comments on the evaluation from management and staff, and others where appropriate, along with the conclusions reached by the Board in considering the evaluation report. Publication would serve to enhance the accountability and transparency of the evaluation process.

With regard to next steps, the Evaluation Group will prepare a revised paper based on comments made during this discussion. This paper will be submitted to the Executive Board for approval shortly, possibly on a lapse of time basis. The revised paper will be posted on the Fund's website for public comments, along with these concluding remarks. Taking into account those comments, a final report on the EVO will be presented to the IMFC in Prague with indication that the Executive Board has taken the necessary decisions to make the EVO operational.

Finally, these remarks reflect understandings that are still preliminary and will need to be revisited before the Board reaches final decisions on all aspects of the EVO.