IMF Capacity Development
March 5, 2019
The IMF provides technical assistance and training to help countries build effective economic institutions that can implement the right policies. These capacity development efforts help countries achieve their growth and development objectives and are an important contribution to countries’ progress toward the Sustainable Development Goals (SDGs). Capacity development is one of the three core functions of the IMF and accounts for about a third of its resources.
Strong economic institutions foster effective policies that lead to economic stability and growth. That is why, for more than 50 years, the IMF has provided technical assistance and training to central banks, finance ministries, tax authorities, and other economic institutions. This helps countries raise public revenues, modernize banking systems, develop strong legal frameworks, improve governance, and enhance the reporting of macroeconomic and financial data. It also helps countries to make progress towards the Sustainable Development Goals (SDGs).
The IMF’s capacity development (CD) work is initiated at the request of member countries, and the IMF has provided CD to all 189 member countries throughout the years . In recent years, low-income developing countries benefitted from around 40 percent of the Fund’s resources used in CD activities. Accounting for almost a quarter of IMF CD, support for fragile and conflict-affected states focused primarily on revenue mobilization, public financial management, banking regulation and supervision, statistics, and central banking.
IMF CD is delivered to countries through short-term staff visits from IMF headquarters in Washington, DC; in-country placements of long-term resident advisors; a network of regional CD centers; face-to-face training, and free online learning courses. External partners play a vital role through financing around 55 percent of IMF CD, including support to regional CD centers, thematic funds focused on development priorities, and bilateral projects. The IMF Executive Board periodically review IMF CD to improve its impact and effectiveness. The recent review of the CD strategy was completed in November 2018.
The IMF’s capacity development efforts focus on:
Public Finances : Helping governments better mobilize revenues and effectively manage expenditure, via tax and customs policies, budget formulation, public financial management, domestic and foreign debt, and social safety nets. This enables governments to maintain fiscal sustainability; enhance infrastructure such as schools, roads, and hospitals; improve social safety nets; foster transparency; and attract greater investments.
Monetary and Financial Sector : Working with central banks to modernize their monetary and exchange rate frameworks and policies – and with financial sector regulators and supervisors to strengthen financial systems and banking supervision and improve financial inclusion. This helps improve macroeconomic and financial stability in the country, fueling domestic growth and international trade.
Legal Frameworks : Aligning legal and governance frameworks to international standards so countries can develop sound fiscal and financial reforms, fight corruption and combat money laundering and terrorism financing.
Statistics : Helping countries compile, manage and report macroeconomic and financial data. This provides a more accurate understanding of their economy and helps governments formulate informed policies, improves the investment climate and fosters transparency and accountability.
Integrated with its advisory services is a broad array of training courses on macro‑financial linkages, monetary and fiscal policy, balance of payment issues, financial markets and institutions, statistical and legal frameworks, and cross-cutting issues like inclusive growth. The training curriculum and course offerings reflect changing needs of member countries and include customized, hands-on, and active learning techniques. They are advertised a year ahead in IMF’s digital and published catalog .
Training is administered both in-person and online . The IMF has significantly scaled up online learning as a vehicle to deliver training to government officials. Online courses are also being made freely available to the public through massive open online courses (MOOCs). Since the program’s launch in 2013, more than 17,300 government officials (and over 12,800 members of the public from 191 countries) have successfully completed an online course.
The IMF's capacity development work is increasingly helping countries tackle their developmental priorities. This includes:
Reducing Inequality : The IMF trains policymakers to implement inclusive policies such as expenditure and subsidy reform, progressive taxation and financial inclusion. It also provides analytical, operational and monitoring tools countries need to tackle inequality.
Gender Equality : The IMF compiles gender-specific data on financial access to enable countries to better understand the impact of their economic policies on women. It is also helping boost female labor market participation, providing training on gender budgeting, publicizing best practices, and empowering female government officials through training.
Climate Action : The IMF works with countries on environmental tax reform and efficient energy pricing to minimize the effects of climate change. It also helps create robust frameworks and public financial management plans to prepare countries for natural disasters and climate-related shocks.
Capacity development is integrated with IMF surveillance and lending.
Strengthening economic policies through CD helps increase the understanding of IMF policy advice in the country, keeps institutions up-to-date on global innovations and risks, and helps address crisis-related challenges and spillovers. Similarly, the IMF’s surveillance and lending work may identify areas in which CD activities can have the biggest impact in a country.
Robust monitoring and evaluation systems ensure that IMF’s capacity development work has a strong focus on results.
The IMF is strengthening its results-based management framework to facilitate systematic planning and improved monitoring of CD activities. This is being complemented by a new common evaluation framework to improve the ability to measure and compare the performance of different kinds of technical assistance and training across the IMF.
Evaluation will help determine, for example, the degree to which technical assistance has improved macroeconomic stability, public finance management systems, the quality of economic statistics, and financial governance. Similarly, it will help determine whether training has improved job performance of government officials and improved their ability to analyze economic developments and assess policy effectiveness.