IMF and Fragile States : 2018 Evaluation Report

International Monetary Fund. Independent Evaluation Office

• Publisher: INTERNATIONAL MONETARY FUND
• Year: 2018
• eBook ISBN: 9781484347324

NONE

The IMF and Fragile States Evaluation Report 2018

International Monetary Fund
Washington, D.C.

IEO

Independent Evaluation Office

of the International Monetary Fund

THE IMF AND FRAGILE STATES

EVALUATION REPORT 2018

Established in 2001, the Independent Evaluation Office (IEO) provides objective and independent evaluation on issues related to the IMF. The IEO operates independently of IMF management and at arm’s length from the IMF’s Executive Board. Its goals are to enhance the learning culture within the IMF, strengthen the IMF’s external credibility, and support the Executive Board’s institutional governance and oversight responsibilities. For further information on the IEO and its work program, please see the website (www.ieo-imf.org) or contact the IEO at +1.202.623.7312 or at [email protected].

IEO

Independent Evaluation Office

of the International Monetary Fund

THE IMF AND FRAGILE STATES

EVALUATION REPORT 2018

©2018 International Monetary Fund

CATALOGING-IN-PUBLICATION DATA JOINT BANK-FUND LIBRARY

Names: Takagi, Shinji., 1953– | International Monetary Fund. | International Monetary Fund. Independent Evaluation Office.

Title: The IMF and fragile states : 2018 evaluation report.

Other titles: International Monetary Fund and fragile states | Evaluation report (International Monetary Fund. Independent Evaluation Office); 2018.

Description: Washington, DC : International Monetary Fund, 2018. | This report was prepared by an IEO team led by Shinji Takagi. | Evaluation report / International Monetary Fund. Independent Evaluation Office; |v 2018 | Includes bibliographical references.

Identifiers: ISBN 9781484347324 (paper)

Subjects: LCSH: Political stability—Evaluation. | Financial risk—Evaluation.

Classification: LCC JC330.2.I534 2018

Publication orders may be placed online, by fax, or through the mail:

International Monetary Fund, Publication Services

P.O. Box 92780, Washington, DC 20090, U.S.A.

Tel: [phone] | Fax: [phone]

E-mail: [email protected]

www.imfbookstore.org

www.elibrary.imf.org

©2018 International Monetary Fund

CATALOGING-IN-PUBLICATION DATA JOINT BANK-FUND LIBRARY

Names: Takagi, Shinji., 1953– | International Monetary Fund. | International Monetary Fund. Independent Evaluation Office.

Title: The IMF and fragile states : 2018 evaluation report.

Other titles: International Monetary Fund and fragile states | Evaluation report (International Monetary Fund. Independent Evaluation Office); 2018.

Description: Washington, DC : International Monetary Fund, 2018. | This report was prepared by an IEO team led by Shinji Takagi. | Evaluation report / International Monetary Fund. Independent Evaluation Office; |v 2018 | Includes bibliographical references.

Identifiers: ISBN 9781484347324 (paper)

Subjects: LCSH: Political stability—Evaluation. | Financial risk—Evaluation.

Classification: LCC JC330.2.I534 2018

Publication orders may be placed online, by fax, or through the mail:

International Monetary Fund, Publication Services

P.O. Box 92780, Washington, DC 20090, U.S.A.

Tel: [phone] | Fax: [phone]

E-mail: [email protected]

www.imfbookstore.org

www.elibrary.imf.org

Content

• FOREWORD
• CONTRIBUTORS
• ABBREVIATIONS
• EXECUTIVE SUMMARY
• 1. INTRODUCTION
• 2. EVALUATION QUESTIONS AND METHODOLOGY
• 3. OVERVIEW OF THE IMF’S WORK ON FRAGILE STATES
  • Key Features of Fragile States
  • The Scale of IMF Engagement with Fragile States
  • IMF Institutional Guidance on FCS Work
• 4. ASSESSING THE EFFECTIVENESS OF IMF ENGAGEMENT
  • How Much Impact Has the IMF Had in Fragile States?
  • Have the IMF’s Existing Instruments Been Adequate to Meet the Needs of Fragile States?
  • How Effective Has IMF Capacity Development Work Been in Fragile States?
  • Has the IMF’s Engagement Been Sufficiently Tailored to Country-Specific Circumstances?
• 5. ASSESSING THE FRAMEWORKS AND PROCEDURES OF IMF ENGAGEMENT
  • How Well Has the IMF Collaborated with Development Partners?
  • How Has the IMF Managed Its Human Resources for Fragile State Work?
  • How Has the IMF Handled Security Issues in High-Risk Locations?
• 6. KEY FINDINGS AND RECOMMENDATIONS
  • Key Findings
  • Recommendations
  • A Note on Country Coverage
• BOXES
  • 1. Focus Countries for the Evaluation
  • 2. Myanmar and South Sudan: Contrasting Experience with IMF TA
  • 3. External Evaluations of Donor-Financed TA Activities
  • 4. Yemen: Fuel Subsidy Reform
• FIGURES
  • 1. Geographical Distribution of Fragile States, 2010–17
  • 2. Persistence of State Fragility, 2000–17
  • 3. Share of Membership with IMF Arrangements, 2006–17: Fragile vs. Non-Fragile States
  • 4. Distribution of Fragile State Arrangements or Instruments by Type, 2006–17
  • 5. IMF TA to Fragile vs. Non-Fragile States, FY 2009–17
  • 6. IMF TA to Fragile States, by Provider, FY 2009–17
  • 7. Official Financial Flows to Fragile States, 2000–15: IMF Disbursements vs. Total DAC ODA
  • 8. The IMF’s Catalytic Role in Fragile vs. Non-Fragile LICs, 2000–12
  • 9. Real GDP Growth in Fragile vs. Non-Fragile LICs, 2000–12
  • 10. Capacity Development Expenditures on FCS: OECD DAC Total vs. IMF, FY 2011–15
  • 11. IMF TA to Fragile States, by Country, FY 2011–17
  • 12. IMF TA to Fragile States, by Funding Source, FY 2009–17
  • 13. Short-Tenured Teams, End-FY 2016
  • 14. Size of Country Teams by Type of Country, End-FY 2016
  • 15. Current-Year and Past-Year Average Performance Ratings of A13-Level FCS and Non-FCS Staff, End-FY 2016
• TABLES
  • 1. Standards of Living in Fragile vs. Non-Fragile States, 2014
  • 2. Key Economic Characteristics of Fragile vs. Non-Fragile States, 2000–16
  • 3. IMF Commitments and Disbursements to Fragile vs. Non-Fragile States, 2010–17
  • 4. IMF Lending Arrangements Completion, 2010–17: Fragile vs. Non-Fragile States
  • 5. Conditionality in Fragile vs. Non-Fragile State Arrangements, 2006–17
  • 6. Promotions of Economists Working on Fragile vs. Non-Fragile States, FY 2011–17
  • 7. High-Risk Countries, October 2017
  • 8. Recommendations
• APPENDICES
  • 1. IMF Relations with Fragile States
  • 2. The IMF’s Institutional Learning on FCS Work
  • 3. Summaries of Country Case Studies
• REFERENCES
• STATEMENT BY THE MANAGING DIRECTOR
• THE CHAIRMAN’S SUMMING UP
• COMPLETED AND ONGOING IEO WORK PROGRAM
• BACKGROUND PAPERS
  • The following Background Papers are available on the IEO website at www.ieo-imf.org.
  • BP/18–01/01. The IMF and Fragile States: Eight African Country Cases
  • BP/18–01/02. The IMF and Fragile States: Eight Selected Country Cases
  • BP/18–01/03. The IMF and Fragile States: Human Resources Issues
  • BP/18–01/04. The IMF and Fragile States: Capacity Development Issues
  • BP/18–01/05. The IMF and Fragile States: Assessing Macroeconomic Outcomes
  • BP/18–01/06. The IMF and Fragile States: IEO Survey of IMF Staff The following conventions are used in this publication:

• An en dash (–) between years or months (for example, 2016–17 or January–June) indicates the years or months covered, including the beginning and ending years or months; a slash or virgule (/) between years or months (for example, 2016/17) indicates a fiscal or financial year, as does the abbreviation FY (for example, FY 2017).
• “Billion” means a thousand million; “trillion” means a thousand billion.

Some of the documents cited and referenced in this report were not available to the public at the time of publication of this report. Under the current policy on public access to the IMF’s archives, some of these documents will become available three or five years after their issuance. They may be referenced as EBS/YY/NN and SM/YY/NN, where EBS and SM indicate the series and YY indicates the year of issue. Certain other types of documents may become available 20 years after their issuance. For further information, see www.imf.org/external/np/arc/eng/archive.htm.

As used in this evaluation report, the terms “country” and “state” do not in all cases refer to a territorial entity that is a state as understood by international law and practice.

Foreword

Helping countries in fragile and conflict-affected situations (FCS) is one of the great challenges facing the international community today. Not only do these countries have enormous needs, but persistent domestic instability has dangerous implications for regional and global stability. With its crisis response and prevention mandate, the IMF has a key role to play in supporting macroeconomic stabilization and building core institutions in these countries, and has been very active over the past two decades through policy advice, financing, and support for capacity development. Notwithstanding these efforts, however, growth in these countries has lagged and progress has often been vulnerable to political and security setbacks, as these countries continue to face deep-seated problems of limited capacity, weak governance and political stresses. The continuing strains in many FCS raise the question of whether the Fund, as well as its international partners, can and should do more to help these countries.

This evaluation finds that the IMF has provided essential services to FCS, playing an important role in which no other institution can take its place, particularly in the period after a country first emerges from conflict. Even though it has provided relatively little direct financing, it has catalyzed donor funding through its support for the sustainable policies and the core institutions needed for macroeconomic stability.

Despite this overall positive assessment, the evaluation concludes that the IMF’s overall approach to its FCS work seems conflicted and its impact has fallen short of what could be achieved. Past efforts have often not been sufficiently bold or adequately sustained, and the staff has tended to revert to treating fragile states using IMF-wide norms, rather than as countries needing special attention.

Based on these findings, the report proposes six recommendations focused on...

Table of contents

• Cover Page