Interview with Montek Singh Ahluwalia: Independent Evaluation Office establishes credibility

• Pages: 197-199

Page 197

IMF SURVEY: You told us in a January 2002 interview that the IEO could enhance the IMF's credibility only if it first established its own credibility. Has the IEO accomplished this?

AHLUWALIA: Ideally this should be answered by others, but yes, I feel we have established our credibility. I have been very pleased by the reaction to our reports from the Executive Board, management, staff, and external observers.

IMF SURVEY: How does the IEO maintain its "credibility balance," given that the outside world tends to be skeptical about the office's independence and those within the IMF tend to be skeptical about whether the office really knows what it is like to negotiate with member country authorities?

AHLUWALIA: This is indeed a challenge. An evaluation office that is completely unconnected to the IMF would appear to be more independent but would face serious limitations. For one, it would not have access to inside documentation, which would greatly limit its usefulness. Also, it is useful to have some IMF staff members with intimate knowledge of how IMF negotiations work when making recommendations that can help promote learning.

The terms of reference of the IEO contain many features that help achieve credibility. First, the majority of our staff have to come from outside the IMF, ensuring a high degree of objectivity and critical input. Second, the fact that the IMF Executive Board- not management-chooses the director of the IEO boosts credibility. Page 198

Third, once the director's term is up, he or she cannot take a job with the IMF, eliminating incentives to be "nice to management." Fourth, we do not "negotiate" our reports with IMF management. The text is not changed after it is sent to management for comments, but these comments are sent to the Board along with any IEO reactions. Finally, the work program is not subject to approval by the Board but is determined by the director on the basis of consultation with many stakeholders.

IMF SURVEY: Does the IEO really have the freedom to criticize the Executive Board and the Group of Seven countries-given that it is dependent on Board approval of its budget?

AHLUWALIA: I have been very pleased with the attention paid to our recommendations. The broad thrust of our recommendations on all these reports has not only been accepted, but welcomed. The follow-through issue is more complex. We can only assess the quality of follow-through after a year or two of experience. I think the IEO should assess the quality of follow-up action to inform the Board on this important aspect, and the IEO plans to submit later this year proposals for discussion with the Board on...