Governance

On July 25, 1987, after intensive discussion, the IMF Executive Board approved a guidance note with regard to governance issues. The guidance note calls for good governance as it relates to macroeconomic issues. It calls for an even-handed treatment of governance issues in all countries, and for greater cooperation with multilateral institutions like the World Bank to realize goals of good governance.

The guidance note stresses the importance of relying on national authorities. The IMF staff should add upon national authorities’eagerness to tackle problems of good governance. They should always rely on information provided by national authorities regarding governance issues. Where authorities neglect to address governance issues that could have a substantial economic impact, the IMF staff should alert the authorities on possible negative economic consequences of not facing such problems.

Although the IMF realizes the potential political implications of governance issues, neither the IMF’s mandate nor its resources allow it to tackle issues of a political nature. They should be directed to provide economic policy advice and technical assistance. This will encourage the IMF and its staff to remain focused on economic issues and not delve into the political realm.

The Executive Board is to be kept abreast of all cases involving governance issues. The Board will have the opportunity to comment upon these guidelines or specific country cases which are brought forth. The Board will also periodically review the IMF’s total experience with governance issues.