External Review Committee on IMF-World Bank Collaboration

Invitation to Comment

The Bank and the Fund share the same goal of raising living standards in their member countries. Their approaches to this goal are complementary, with the IMF focusing on ensuring the stability of the international financial system and the World Bank concentrating on long-term economic development and poverty reduction. The IMF and the Bank collaborate regularly and at many levels on assistance to member countries and are involved in several joint initiatives. The terms for their cooperation were set out in a concordat in 1989, to ensure effective collaboration in areas where responsibilities overlap. These terms have since been elaborated in guidelines dealing with specific issues, such as public expenditure and debt relief.

On March 29, 2006, the IMF and the World Bank announced the creation of a six-member External Review Committee mandated by the World Bank President and the Managing Director of the IMF to examine the areas of Bank-Fund collaboration and propose improvements (see press release).

In proceeding with its work, the committee has decided to solicit views from the public, and has asked the World Bank and the IMF to establish an electronic mailbox for the public to offer their comments. The views of the public on the questions addressed to the Committee (see background below) would be welcome. In particular, the Committee would appreciate perspectives on possible improvement to be made on division of labor and collaboration between the IMF and the World Bank.

The comments will be forwarded to the members of the Committee and may be submitted to erc@imf.org until September 15, 2006.

Background

The Committee's members are:

1. Ms. Sri Mulyani Indrawati, Indonesia's Minister of Finance and a former IMF Executive Director

2. Ms. Ngozi Okonjo-Iweala, Nigeria's Minister of Finance and a former World Bank Vice President and corporate Secretary

3. Mr. Michael Callaghan, Executive Director of the Australian Treasury's Revenue group and a former IMF Executive Director

4. Mr. Caio Koch-Weser, Vice Chairman of Deutsche Bank, Germany's former Finance Secretary and a former World Bank Managing Director

5. Mr. Pedro Malan, Chairman of Unibanco and a former Minister of Finance of Brazil

6. Mr. William McDonough, Vice Chairman of Merrill Lynch and a former President of the Federal Reserve Bank of New York,

Mr. Mark Allen, Director of the IMF's Policy Development and Review Department, and Mr. Danny Leipziger, Vice President of the World Bank's Poverty Reduction and Economic Management Network, will act as advisors to the Committee and facilitate contact between the Committee and the staffs of the two institutions. A Joint Task Force, made up of senior IMF and World Bank staff, has also been created to assist in the review process.

Consultations and key questions addressed to the Committee:

The Review Committee may solicit a representative and broad-ranging sample of views from stakeholders on the nature and practice of Bank-Fund collaboration with suggestions for improvement. Key questions will include:

• Do the areas of primary responsibility in the 1989 Concordat, as updated by subsequent reviews, provide an appropriate foundation for Bank-Fund collaboration? Are these areas viewed as consistent with the two institutions' mandates?
• As areas of common or joint interest have increased over time, to what extent is the division of labor mandated by the Concordat and subsequent reviews actually being implemented on the ground? In what ways, if any, may the demarcation of responsibilities be better applied, altered, or made more precise, in order to achieve more efficient and effective delivery of services to the membership? Does the "lead agency concept" work well in practice? Can institutions be held sufficiently accountable? How can effective coordination and collaboration be enhanced?
• What specific improvements can be made to Bank-Fund collaboration on country work, including on policy advice, lending operations, and technical assistance? How should collaboration be tailored to suit the differing circumstances of the membership, including post-conflict countries, low-income countries, middle-income developing countries, and emerging market economies?
• What specific improvements can be made to Bank-Fund collaboration on thematic work, including on financial sector issues (FSAPs), trade policy, standards and codes, debt sustainability analysis in low-income countries, the medium-term growth framework and PRSP process, donor coordination, and implementation of the HIPC Initiative and the Multilateral Debt Relief Initiative (MDRI)?