(This article has been changed since publication to indicate that so far the reports are being made public. – Ed.)
“A key tool” used by the International Monetary Fund to fight corruption, governance “diagnostic” reports, provide frequently tough examinations of national governments, and will be used more often.
The value of the diagnostic reports was lauded in a recent article by IMF General Counsel Rhoda Weeks-Brown, who described them as “in-depth, country-tailored assessments of corruption and governance vulnerabilities that draw heavily on local knowledge and expertise.”
Each report, she continued, “informs the Fund’s dialogue on corruption with national officials, and influences a country’s reform efforts.” The IMF in February also cited them in a factsheet titled: How the IMF is Promoting Transparent and Accountable Use of COVID-19 Financial Assistance.
Expanded use of the diagnostic reports is planned. “… [W]e expect that the number of reports will increase substantially in the coming months,” Weeks-Brown wrote.
Six Reports Disclosed
Six governance reports have been published: for the Central African Republic (2021), Guinea Bissau (2020), Equatorial Guinea (2019, on government website), Mozambique (2019), the Republic of Congo (2018, in French), and Ukraine (2014).
Five more reports are in the works, according to an IMF official: for Zimbabwe, Democratic Republic of the Congo, Moldova, Paraguay and Honduras. Peru is also being evaluated, according to a footnote in the February factsheet.
Under IMF rules, governments could block release of the reports.
Several IMF documents provide the basis for the analyses. In 2017 the IMF published a policy paper entitled “The Role of the Fund in Governance Issues—Review of the Guidance Note—Preliminary Considerations” that laid the foundation for the IMF’s current guidance on involvement in governance issues, which was published in April 2018.
The language in the reports can be blunt.
Tough Diagnosis for Central African Republic
The 54-page governance diagnostic report for the Central African Republic indicates that they can be candid about governance problems. For example:
There is a universal culture of failure to sanction noncompliance with laws and regulations. First of all, there is a structural problem linked to the peace process: the government’s authority is not yet fully restored in a large part of the country. As a result, a favorable breeding ground is created for a culture of noncompliance with the country’s laws and regulations. The agencies in charge of supporting good governance asked questions about acts of corruption or presumed poor governance, and submitted these cases to the appropriate authorities, yet no sanctions were imposed. The most emblematic example is probably that of reporting assets.
The report was prepared by IMF staff members, in order “… to report on the status of good governance and to analyze in particular the vulnerabilities to corruption that could jeopardize the achievement of the nation’s development objectives or efforts to restore lasting peace.”
Although released Jan. 7, 2021, the recommendations “were finalized” at a meeting held in October 2019 with government officials, according to the report.
The word “transparency” is mentioned in the CAR report more than 70 times.
No Anti-Corruption Strategy Seen in Guinea-Bissau
The IMF report on Guinea-Bissau states that “political instability contributes to a deep-rooted corruption, entrenched rent-seeking, and predatory behavior.”
One summary paragraph:
The country’s political leadership has a general understanding of the corruption vulnerabilities and their potential materiality, and it is vocal about the need for change, including in the new government’s program. Guinea-Bissau, however, lacks a comprehensive national anti-corruption strategy. Political instability contributes to a deep-rooted corruption, entrenched rent-seeking, and predatory behavior. The ability of officials to act with impunity has exacerbated this predatory behavior, and political patronage leads to the placement of unqualified individuals in public sector jobs. Ongoing efforts to mobilize revenues and control expenditures are welcome steps to reduce fiscal vulnerabilities, but further actions are required.
Government Wrote Mozambique Report
The report for Mozambique, prepared by government staff “with assistance” from IMF officials, is less critical and includes many government pledges for improvement.
The report states that “governance and corruption challenges in Mozambique remain of a systemic nature, principally due to constraints on effective implementation.” It says that “conditions are in place for durable progress on improving governance and tackling corruption, building on the reforms that we have undertaken to date.”
The 57-pages summarize efforts in many areas, accompanied by reform promises.
