Policy Papers

April 9, 2007

Review of the Fund's Income Position for FY2007 and FY2008

Description: The review of income for the year ended April 30, 2007 (FY07) builds on the midyear income review and the February 2007 meeting of the Committee on the Budget

April 6, 2007

Provisional Agenda for the Fifteenth Meeting of the International Monetary and Financial Committee (IMFC)

April 4, 2007

Update on the Financing of the Fund's Concessional Assistance and Debt Relief to Low-Income Member Countries

Description: This paper provides a semi-annual review of the status of financing for PRGF-ESF lending, HIPC and MDRI debt relief, and subsidization of emergency assistance to PRGF-eligible members. The last review was completed by the Executive Board on September 6, 2006.

March 30, 2007

The FY2008-FY2010 Medium-Term Administrative and Capital Budgets

Description: This paper presents proposals for the FY2008–FY2010 medium-term budget (MTB) and seeks Board approval for the proposed FY2008 annual net administrative budget. The paper also presents the FY2008–FY2010 medium-term capital plan and seeks approval for expenditures on new capital projects beginning in FY2008. The impact of the proposed administrative and capital budgets on the Fund’s administrative expenses (as classified in the Fund’s financial statements), and hence on the Fund’s net income over the next three years, is identified.

March 27, 2007

Strengthening Debt Management Practices - Lessons from Country Experiences and Issues Going Forward

Description: This paper reviews Bank-Fund staff experience with strengthening public debt management (PDM) frameworks and capacity in developing countries. In 2001, the IMF and the World Bank developed sound practice guidelines in this area, followed by a pilot program to assist 12 countries develop and implement reforms. In addition, an assessment of PDM has been incorporated into surveillance work, where relevant, and included in other Bank and Fund advisory and technical assistance work. Based on these, the paper draws key lessons, identifies the continuing challenges facing debt managers, and proposes further capacity building and advisory work in PDM. The 12 countries in the pilot program were Bulgaria, Colombia, Costa Rica, Croatia, Indonesia, Kenya, Lebanon, Nicaragua, Pakistan, Sri Lanka, Tunisia, and Zambia.

Notes: The paper was drafted by a staff team comprised of Allison Holland, Andrew Ndeti Kitili, Peter Kunzel, Brian Olden, Michael Papaioannou, Magdalena Polan, Bozena Elzbieta Radzewicz-Bak, Paul Ross and Jay Surti at the IMF and Phillip Anderson, Vikram Nehru, Abha Prasad, Marc Roland Thomas, Francis Rowe, Eriko Togo, Antonia Velandia, and Dana Weist at the World Bank. The preparation of the report was supervised by Udaibir S. Das (IMF) and Phillip Anderson and Vikram Nehru (The World Bank).

March 27, 2007

Strengthening Debt Management Practices - Lessons from Country Experiences and Issues Going Forward - Background Paper

March 14, 2007

A New Quota Formula - Additional Considerations, Statistical Appendix, and Statement by the Managing Director

Description: An informal Executive Board seminar in December 2006 made an important start in the development of a new quota formula.2 The discussion was wide ranging, raising a number of important issues that need to be considered further in the development of a formula that can achieve the objectives of the quota reform and command the required broad support within the membership.

This paper seeks to provide a basis for a second discussion, including by exploring issues raised at the December meeting. The paper also provides further simulations based on a wider range of assumptions regarding possible variables and their weights, as requested by many Directors. As with the last paper, it should be emphasized that this paper does not seek to propose any particular formula and that all the simulations presented should be seen as illustrative and as merely an aid to discussion. Nevertheless, it is hoped that the discussion of this paper will help lay the groundwork for beginning to narrow options and moving toward formulation of a specific proposal in the coming months.

The paper does not address the size of the second round ad hoc quota increases. This question, which is closely linked to the magnitude of the increase in basic votes, will be taken up at a later stage once the discussion of the formula is more advanced.

March 5, 2007

The Role of Fiscal Institutions in Managing the Oil Revenue Boom

Description: This paper examines the fiscal responses of oil-producing countries (OPCs) to the oil boom through 2005 and the role of special fiscal institutions (SFIs)—oil funds, fiscal rules and fiscal responsibility legislation (FRL), and budgetary oil prices—in fiscal management in OPCs, and draws some general lessons.

March 2, 2007

Fund Financial Support and Moral Hazard - Analytics and Empirics

Description: Since Fund financial support helps reduce the expected cost of crises, members and markets might engage in greater risk-taking; in other words, moral hazard. Empirically, however, the Fund’s rate of charge has adequately reflected the default risk it faces and the high political, social, and economic costs of crises are likely to limit debtor moral hazard. As regards the design of a contingent, crisis prevention instrument, the use of qualification standards can help address issues of debtor moral hazard directly. In addition, the small amounts of Fund financial support -- in relation to a country's financial needs -- suggest that creditor moral hazard is likely to be limited. While existing empirical tests are far from definitive, the paper suggests that creditor moral hazard is less likely to be a concern after the Fund sent the signal in mid-1998 that it would interrupt support when program success is unlikely.

Notes: The views expressed in this paper are those of the staff and do not necessarily reflect the views of the Executive Board of the IMF.

February 23, 2007

Report of the External Review Committee on IMF-World Bank Collaboration

Description: The Bank and Fund are the only two international financial institutions with near universal membership. They have an important role to play in providing global public goods and in helping countries obtain the benefits of globalization, as well as handle the pressures it creates. While the Bank and Fund have separate mandates, they are inherently linked and close collaboration is vital. Indeed, the costs to members of poor collaboration would be significant. Although there are many examples of good collaboration and there have been clear improvements over the years, there is scope for further improvements in the view of the Committee.