Report of the International Financial Institution Advisory Committee

The Commission believes that performance of the IMF, the Bank, and the regional banks would improve considerably if each institution was more accountable and had a clearer focus on an important, but limited, set of objectives. Further, the IMF, the Bank, and the regional banks should change their operations to reduce the opportunity for corruption in recipient countries to a minimum.

Accountability, accomplishment, effectiveness, and reduction in corruption will not be achieved by hope, exhortation, and rhetoric. Programs must be restructured to change incentives for both recipients and donor institutions. Each institution should have separate functions that do not duplicate the responsibilities and activities o f other institutions. The IMF should continue as crisis manager under new rules that give member countries incentives to increase the safety and soundness o f their financial systems. For the Bank and the regional banks, emphasis should be on poverty reduction and development not, as in the past, on the volume o f lending.