Journal Issue

In the news: Interview with Thomas A. Bernes IEO critical for institutional governance and oversight

International Monetary Fund. External Relations Dept.
Published Date:
July 2005
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IMF Survey:Your duties on the IMF’s Executive Board required keeping a critical eye on the Fund and its work. In what ways are your new duties as head of the IEO similar? And in what ways are they different?

Bernes: There are similarities and important differences. Both the Executive Board and the IEO have as a principal objective ensuring the effectiveness of the IMF, but clearly their roles are different. In the Board, Executive Directors are responsible for deciding policy and holding management and staff accountable for the conduct of that policy. The IEO, of course, does not make policy. Its job is to look at how policies, approved by the Board, are carried out, whether they are effective, and what to do if they are not. The IEO provides a very important function in helping to support the Board’s institutional governance and oversight functions. But the IEO is also charged with evaluating the effectiveness of the IMF as a whole, which includes the Board itself.

When I was on the Board, I chaired the Evaluation Committee. There had been a long—in fact, a 10-year— discussion as to whether there should be an independent evaluation office. We went through various models before we came up with what is in place today. The startup occurred just at the time that Michel Camdessus was leaving and Hors Köhler was taking over as Managing Director. Horst Köhler very much welcomed the establishment of the office, citing his experience with the European Bank for Reconstruction and Development. He saw independent evaluation as a very important function on behalf of the shareholders as well as external stakeholders, including financial markets, nongovernmental organizations, and academics.

IMF Survey:Your predecessor, Montek Singh Ahluwalia, was more of a true outsider to the IMF. Are there advantages to having been privy to more of the internal workings of the organization, including the kind of real-world trade-offs that staff and management are faced with?

Bernes: We all bring our own backgrounds and experiences to these positions. Montek clearly brought a range of experiences, including having been a member of the Indian government and having worked on the World Bank staff. What I bring is experience as a senior economic official in the Canadian government, on the staff of the Organization for Economic Cooperation and Development, working with the World Trade Organization in Geneva, and with the World Bank and the Development Committee. I bring a range of experiences in cross-cutting issues but also at the governance level. One of the important ways in which the IEO contributes to the IMF is through its capacity to look at governance issues. My experience— including having sat on the Board of the Fund and having seen it in action—hopefully will allow me to anticipate and understand perhaps more readily than some others what the Board could find helpful to carry out its oversight function.

IMF Survey:The IEO’s FY2006 work program, which the Executive Board just reviewed, calls for an evaluation of the IMF’s advice on exchange rate policy and its role in selected African countries with respect to the external resource envelope, aid predictability, and debt sustainability. It also foresees an evaluation of the IMF’s “bilateral” or country surveillance, including issues related to the surveillance of large industrial countries. Is the selection of these topics linked to the Fund’s own work program or is the selection process completely independent?

Bernes: It is independent. The choice of topics is the responsibility of the Director of the IEO, taking into account consultations with the Board, IMF management and staff, and outside stakeholders. A number of evaluations are currently under way, including on structural conditionality and Financial Sector Assessment Programs. I recently met with the Board’s Evaluation Committee to inform them of my decisions about evaluation topics for the next year. These topics were, in fact, included on an initial list that my predecessor, Montek, had identified and had consulted broadly on. Having been in this office since early June, I had a limited amount of time to talk with Board members, staff, management, and outside stakeholders. I made my choices based on the initial list and on consultations that had taken into account views expressed both inside and outside the IMF.

With respect to surveillance, its effectiveness is a critical issue for the Fund. It is also one of the most reviewed areas of Fund activity. The Board and staff conduct a review of surveillance every two years. With a topic that is looked at so frequently, the IEO’s evaluation will hopefully be creative and come up with some new thoughts. We do have under way right now an evaluation of “multilateral” or global surveillance, which is part of overall surveillance. When we’ve concluded that study, we will turn to the issue of “bilateral” or country surveillance. The Fund’s advice on exchange rate policy is also a core responsibility of the IMF. It appears timely to evaluate how this is being carried out.

IMF Survey:The IEO this year will itself be the object of an external review. What would you like to see this review accomplish?

Bernes: It’s only fair that the evaluators should themselves be evaluated. In fact, when I chaired the Evaluation Committee of the Board, which defined the initial terms of reference for the IEO, we built this evaluation into those terms of reference. We were creating a new office that was unlike any that existed in other international financial institutions. In a lot of international development institutions the evaluation work focuses on projects. That is clearly not the case at the Fund.

The Board decided when setting up the IEO, that after three or four years of experience, we should sit back and take a look to see if the model was working. Is the office sufficiently independent? Is the size and composition of staff right? Is the level of output about right? Do its evaluations have credibility with both insiders and outsiders? How has the consultation process worked on the choice of topics?

Have these topics enhanced the credibility of the organization with the outside world and also helped the Board, management, and shareholders to enhance the effectiveness of the institution? Is the model right, or does it need some fine-tuning and, if so, in which ways? Those are all questions that I would hope the evaluation of the IEO will address.

There is a growing need to ensure internally—with staff and management—and externally that the lessons, messages, and the proposed recommendations of these evaluations are well understood.

—Thomas A. Bernes

IMF Survey: Finally, what are your longer-term goals for the IEO? What do you hope to accomplish as its director?

Bernes: We are entering a new phase. When my predecessor became Director, clearly, it was a start-up operation. He had to put together a staff, identify a number of topics, and conduct his first evaluations. He and the team did a terrific job, and that’s a message I’ve gotten through my consultations to date. The office’s independence and its reputation are well established.

The challenge now is to turn it from a start-up operation into a steady state, which will require reflecting on how to design the work program over the medium term. In some ways, the hot topics of the day were, quite naturally, the ones that were looked at first. It would not be appropriate to revisit these every year or every two years, so the challenge is to identify, each year, the key policy and operational issues that can enhance the learning culture within the Fund, support the Board in its oversight function, and bolster the IMF’s credibility with outside stakeholders.

Another challenge is the role of the office in disseminating its results and in following up on earlier Board-approved recommendations. There is no point in producing a fine report and then just having it sit there. There is a growing need to ensure internally—with staff and management—and externally that the lessons, messages, and the proposed recommendations of these evaluations are well understood.

We have now had four years of experience with these evaluations. In my view it’s time to take a systematic look at developments that have stemmed from earlier IEO recommendations. The IEO should be asking how these have been implemented and whether they have addressed the problems or issues identified in the evaluations. Over time, the IEO’s dissemination and follow-up roles will take on increasing importance.

Further information about the IMF’s Independent Evaluation Office is available at

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