With the global financial crisis, the world is increasingly looking to the International Monetary Fund—not just for financing but as the global institution charged with overseeing members’ economies and policies (what we call surveillance). It's easy to forget that only 10 years ago the Fund was a secretive institution. That's no longer the case. Communicating and engaging with the world at large is now a normal and essential part of the Fund’s business.
The IMF today is a very open institution. The vast majority of our reports are published. The public can search the IMF’s archives. And we are making lots of effort to reach out to external stakeholders.
The benefits of this increased transparency, both for the Fund’s surveillance and lending activities, are indisputable. Transparency allows us to engage with the public and to build a broader understanding and support of what we do. It benefits the quality of our advice by subjecting our analysis to outside scrutiny. And more generally, it makes us more accountable for our advice and financial decisions. In all, it makes us a more effective and legitimate institution.
Frankly, the Fund cannot be a genuine leader on economic policy issues unless it is seen as transparent. We certainly would not have been able to achieve the major reforms of our lending frameworks and the increase in our financial resources had we not been seen as an open and transparent institution. Rightly, the public expects to know what we are up to.
At the same time, certain aspects of transparency remain controversial. Some believe that publication undermines candor in the reports, the frankness of discussions between staff and country authorities, and the Fund’s role as trusted advisor.
We are gearing up to review the Fund’s transparency policy shortly after our Annual Meetings (which will be held in Istanbul in early October), as part of our efforts to increase our effectiveness. Here are some of the key facts that are informing this work:
- All the reports for recent crisis programs cases—involving very large financing packages (“exceptional access”) from the Fund—have been published. This is the first financial crisis with this type of transparency from the Fund.
- Close to 90 percent of country reports are published—and recall they can only be published with the explicit consent of the member country.
- However, publication lags remain long. On average, it takes over 40 days for a country report to be published after the Executive Board meeting at which the report is discussed. There are many reasons for delays, but one seems to be the process of getting the member’s consent for publication.
- Moreover, the crisis environment, combined with a need for clear and candid assessments of exchange rates, risks, and spillovers, has put transparency policy to the test. Before consenting to publication, a member can request limited modifications to the report, though these have to meet strict criteria. Since the start of the crisis, we have seen a sharp increase in countries’ requests to delete information, mostly on grounds of market sensitivity.
What are the main challenges now?
The IMF has come a long way over the last 10 years, and publication rates of reports are high. Raising them further is not the main issue, nor one that can easily be resolved without changes much of our membership would consider revolutionary (such as making publication mandatory). Rather, further efforts should focus on making progress on a broad front, on issues that may catch fewer headlines, but are nevertheless crucial:
- Reducing long publication lags. How can we simplify the cumbersome procedure for obtaining consent?
- Maintaining the integrity of reports. The IMF’s analysis and advice must be, and be seen to be, convincing, candid, and independent. To this end, there is a long-standing and fundamental principle that Fund reports are not “negotiated” documents.
- Making the Fund’s archives more accessible. The current setup for searching the archives—in particular the need to travel to Washington to gain full access to them—is outdated. We should also consider whether we can make some archived material available more quickly to the public.
As part of the background work for the review of the transparency policy, we have been seeking views from the public, including in a meeting with civil society organizations in April and via web surveys. You can find a summary of them here.