Poor governance and the lack of transparency offers greater incentives and more opportunities for corruption—the abuse of public office for private gain. Corruption alters the incentives of individual entrusted with public authority, undermines the ability of states to deliver inclusive and sustainable growth and lift people out of poverty. It is a corrosive force that eviscerates the vitality of business and stunts a country’s economic potential.
In 1997, the IMF adopted a policy on how to address economic governance, embodied in the Guidance Note “The Role of the IMF in Governance Issues”. To further strengthen the implementation of this policy, the IMF adopted in 2018 a new Framework for Enhanced Engagement on Governance (Governance Policy) that aims to promote more systematic, effective, candid, and evenhanded engagement with member countries regarding governance vulnerabilities—including corruption—that are critical to macroeconomic performance.
The policy focuses on state functions that are most relevant to economic activity; namely: (i) fiscal governance; (ii) financial sector oversight; (iii) central bank governance and operations; (iv) market regulation; (v) rule of law; and (vi) Anti-Money Laundering and Combatting the Financing of Terrorism (AML/CFT). The policy also focuses on transnational aspects of corruption, particularly measures designed to prevent the bribery of foreign public officials or providing services that facilitate concealment of corruption proceeds.
A ‘2023 Review of the Implementation of the 2018 Framework for Enhanced Fund Engagement on Governance’ finds that Fund engagement on governance has been broadly in line with its objectives and makes proposals to further strengthen engagement.
This document provides a third and final update on implementation of measures to promote good governance and transparency in pandemic-related spending, which countries committed to in the context of IMF financing during the COVID-19 pandemic.
Governance diagnostic reports—a key tool in the IMF’s capacity development efforts—are in-depth, country-tailored assessments of corruption and governance vulnerabilities that draw heavily on local knowledge and expertise, and provide prioritized and sequenced recommendations. More Governance Diagnostics are underway, and are expected to be published upon completion.
Voluntary assessments of the framework to prevent supply-side corruption and cross-border facilitation has been covered in the Article IV consultations of some advanced economies.
Given the importance of the “supply-side” and “facilitation” issues, the Fund has been urging members—irrespective of whether they experience systemic domestic corruption themselves—to voluntarily agree to have their systems assessed by the Fund in the context of surveillance, both with respect to their anti-bribery frameworks and those aspects of their AML/CFT frameworks that seek to curb concealment of the proceeds of corruption by foreign officials.
13 countries have volunteered thus far and have had their assessment included in their Article IV consultation reports: Austria, Canada, France, Germany, Italy, Japan, Czech Republic, Saudi Arabia, Switzerland, The Netherlands, Norway, the United Kingdom, and the United States
How the IMF is Promoting Transparent and Accountable Use of COVID-19 Financial Assistance
How Does the IMF Encourage Greater Fiscal Transparency?
Protecting IMF Resources - Safeguards Assessments of Central Banks
IMF and the Fight Against Money Laundering and Financing of Terrorism
The IMF and the Fight Against Illicit and Tax Avoidance related Financial Flows
The increase in debt in the last decade points to the need for lowering deficits, rebuilding space to deal with shocks, and strengthening fiscal rules
Improving fiscal policy frameworks, fostering education and skills, and supporting the green transition can help ensure strong, sustainable, balanced, and inclusive growth
Reducing crime could significantly boost investment, productivity, and GDP growth in Latin America and the Caribbean
Policymakers need fuller view of consequences of illicit flows, including tallies of the fiscal, monetary, financial, and structural costs
Curbing cross-border illicit proceeds demands a united global effort and innovative approaches
Establishing effective policies has become a priority for authorities amid the failure of some exchanges and collapse of certain crypto assets
The IMF’s response to help its member countries manage the COVID crisis and save lives and livelihoods has been unprecedented, including in the sheer speed and size of that effort. The latest document provides a third and final update on implementation of measures to promote good governance and transparency in pandemic-related spending, which countries committed to in the context of IMF financing during the COVID-19 pandemic.1 Since the last update in May 2022, further progress has been made in implementing measures to publish beneficial ownership information of entities awarded with procurement contracts and to conduct audits, illustrating that authorities have overall followed through on their commitments. Actually, three years after most measures were committed to, the implementation rate has reached 80-90 percent, on average.
