An Evaluation of the Role of Structural Conditionality in IMF-Supported Programs

Conditionality in IMF-supported programs has traditionally relied on quantitative targets. The additional use of structural conditionality (SC), involving changes in policy processes, legislation, and institutional reforms gained prominence in the late 1980s and rose significantly in the 1990s. This proliferation was met with increasingly strong criticism outside the IMF. Largely in response to this criticism, the IMF issued in 2002 new conditionality guidelines. The motivation for this evaluation is that many of the criticisms of the use of SC still persist today. The main purpose of the evaluation is to help improve the design of SC in programs in order to promote critical structural reforms, recognizing that these programs have also other objectives and respond to a series of forces. To this end the evaluation will examine three sets of questions: (i) how is SC set at the start of a program; (ii) how does it evolve and is being tracked during the lifetime of the program; and (iii) what is its impact.

A final issues paper was posted in May 2005.

This evaluation examines IMF experience in assisting Sub-Saharan African countries in determining their external resource envelopes. It focuses on key aid-related underpinnings of PRGF program design, especially the analysis of absorptive capacity and the availability and predictability of donor funding. It seeks to distill recommendations for improving IMF performance based on the lessons learned from PRGF programs in 29 Sub-Saharan African countries. It builds on an earlier IEO evaluation of the IMF’s role in PRSPs and PRGFs.

A draft issues paper was posted in December 2005.

An Evaluation of The IMF’s Advice on Exchange Rate Policy

The Articles of Agreement require the IMF to exercise firm surveillance over member countries’ exchange rate policies. Although exchange rate surveillance therefore is the IMF’s core responsibility, it is also the area in which the Fund has been criticized in recent years for its inadequacy. The evaluation seeks to assess how and how well the Fund fulfills its obligations towards exchange rate surveillance under the Articles and to identify areas where improvement, if any, could be made. The evaluation is at an early stage of preparation. It is expected that the draft issues paper for the evaluation will be posted on the IEO website in or around April 2006, in order to elicit comments from the public.

A draft issues paper was posted in April 2006.