IMF board agrees to ensure Fund surveillance
The Executive Board of the International Monetary Fund (IMF) agreed to move forward with a framework to help ensure the evenhandedness of Fund surveillance. The framework responds to recommendations from the 2014 Triennial Surveillance Review (TSR) and, as outlined in a staff paper, has two key elements. First, it articulates principles of what it means to be evenhanded. Second, it establishes a mechanism for reporting and assessing specific concerns about lack of evenhandedness in surveillance.
The evenhandedness of IMF analysis and advice is critical to the institution's credibility and the effectiveness of its engagement with member countries. The TSR examined the issue in detail, including through the external study. While it did not find a systematic lack of evenhandedness, it identified instances where differences in surveillance across countries were not all well justified by country circumstances. The TSR also confirmed long-standing perceptions that the Fund is not evenhanded. The new framework aims to address both perceptions and instances of lack of evenhandedness transparently, while safeguarding the independence and candor of staff advice. By forging a common understanding of evenhandedness, the principles can support a deeper dialogue through which evenhandedness issues can be identified earlier and dis- cussed more candidly in the surveillance process. The mechanism is intended to serve as a backstop to assess remaining concerns and identify lessons to promote better practices going forward. In this respect, the evenhandedness framework also supports the broader goals of the TSR to strengthen and promote more member-focused surveillance.
Executive Directors welcomed staff's efforts to develop a more robust framework to help ensure the evenhandedness of Fund bilateral and multilateral surveillance, in line with the recommendations of the 2014 Triennial Surveillance Review. They emphasized that the evenhanded treatment of member countries is essential to the Fund's credibility and legitimacy and, thus, to the traction of its policy analysis and advice. Directors broadly supported staff's proposals as a step toward addressing actual and perceived cases of lack of evenhandedness. In this regard, they considered that the formulation of principles and the establishment of a mechanism for addressing concerns about lack of evenhandedness would be a useful initial step to complement existing avenues for dialogue throughout the surveillance processes.
Directors agreed on the importance of having a clearer and shared understanding of what it means to be evenhanded in surveillance, as lack of clarity on this definition has been an obstacle to addressing issues related to evenhandedness. They agreed that evenhandedness should be viewed through the lens of "uniformity of treatment," which is a long-standing and central tenet of the Fund's operations. Accordingly, evenhandedness does not mean that member countries be treated identically, but that member countries in similar circumstances should be treated similarly. Directors acknowledged the substantial degree of judgment required to apply this principle, and some of them were concerned that this could also give rise to a lack of evenhandedness.
Directors recognized the importance of better understanding whether and how surveillance is appropriately calibrated to country circumstances. They emphasized that the "outputs" of surveillanceeffectively, the Fund's policy analysis and advice as well as their presentationshould continue to be the primary basis for gauging evenhandedness.