How well does the IMF engage with civil society?

January 12, 2023

     By Duncan Green     

Oxfam has a new paper out this week on how the IMF engages with civil society around the world. A bit process-y, I know, but this is good – based on a lot of serious case studies and coming up with the odd surprise (notably Ghana, highlighted below). My summary of the summary:

‘The International Monetary Fund (IMF or ‘the Fund’) has far-reaching impacts at global as well as national level. When countries are under financial distress and turn to the IMF, its financial support – and even more so, the numerous macroeconomic reforms that the Fund requires in return for such financing, known as ’conditionality’ – have significant effects on the future of those countries and their people. Too often, IMF loan programs come with austerity-packed conditionality that seeks to rebalance the government’s books at the expense of exacerbating inequalities.

The final sign-off on loan programs rests with the IMF Executive Board. But before those decisions are made, IMF staff spend months and sometimes years on missions to firm up loan packages, and most importantly, their conditions, with the borrower governments.

In recent decades, these missions have begun to reach out to civil society organizations (CSOs) who represent interests distinct from those of governments and the private sector. However, despite the importance of engaging civil society for the sake of enhanced accountability and designing more transparent, better informed and less risky loan programs, the extent, meaningfulness and impact of this engagement have remained questionable.

This paper presents case study research from around the world on IMF engagement with CSOs at the national level in Argentina, Ecuador, Tunisia, Zambia, Pakistan, Egypt and Ghana.

Key Findings

  1. IMF-CSO Engagement is characterized by an Imbalance of Power

The biggest overall finding is that the IMF’s engagement with CSOs is marred by an imbalance of power skewed towards the Fund. This is enabled mainly by the mechanisms of engagement, the lack of a mandated requirement for civil society engagement, the selection of who is included or excluded in engagement, as well as the perceived or real differences in technical economic capacity between the IMF and national CSOs.

The setting in which national-level engagement typically takes place is characterized by informality and confidentiality. These ‘off-the-record’ interactions obscure who the IMF has or hasn’t spoken to [and] mean that CSOs have a difficult time holding the IMF accountable to any commitment it might make, including if and how it takes CSO feedback into account. As most engagement is unstructured and conducted at the will of individual IMF staff, there can be large differences in the nature of engagement within and across countries.

While it remains unknown exactly which CSOs the IMF speaks to in any given country, including the case study countries, only three countries had confirmed incidences of trade unions being engaged either directly or indirectly. In these engagements, IMF staff approach meetings from extremely technical aspects of the economic policies under consideration and not adapted to civil society as a target group to enable their participation. Given the IMF’s vantage point, they inevitably have more terminology, more technical might and more information than their CSO counterparts. [Similarly] CSOs are often engaging with the IMF on issue areas that most IMF staff are not knowledgeable about, including gender impacts, human rights and climate change. The different parties may end up speaking different languages and – given the power imbalances in the relationship – it falls on CSOs to adopt and speak the Fund’s language.

  • Significant Gap between the IMF’s and CSOs’ Expectations/Motivations

There is a stark gap between CSOs’ expectations and motivations and those of the IMF. CSOs engaging with the IMF often hope to help shape IMF programs and their associated economic policies, and also to push for more government transparency and accountability. The IMF on the other hand seems to be engaging with CSOs primarily as a way to diversify its social and economic understanding of the country, and to gauge public perceptions of and potential adverse reactions to a prospective IMF-supported program. The outcome is often a sense of disenchantment among CSO representatives, who come to have low expectations of these engagements.

  • Engagement is shaped by the degree of Openness of Civic Space

The study also found, unsurprisingly, that the political context and degree to which civic space is open shapes the engagement. National governments, who are the Fund’s primary constituency, can directly or indirectly impede the IMF’s engagement with CSOs. This could be through actively attempting to limit civic space by censoring media campaigns, violently repressing protest movements, and in some cases punishing activists and their family members in retaliation for engaging with the IMF and/or criticizing the government. The near-universal unpopularity of the IMF’s programs meant that the risk of public discontent drawing a repressive response of some sort was seen in all country case studies.

  • Meaningfulness of IMF-CSO Engagement varies and there is Limited Evidence of Impact

Different CSOs, including those operating within the same country, expressed conflicting views regarding whether the IMF’s engagements with them were meaningful. Some reported that IMF staff genuinely seemed to want to understand their country’s social and economic context. Others had the impression that their conversations with the IMF only satisfied a formality.

The research found only patchy evidence that CSO engagement was perceived as or was actually having a tangible impact in shaping IMF programs.

A stand-out exception was the case of Ghana, in which several economic conditionalities were thought to have been influenced by the CSOs who engaged in discussions. The unique characteristic of that engagement was a well-coordinated group of CSOs, combined with an open finance ministry and a mission chief who welcomed tripartite discussion (involving the IMF, the government and CSOs) before and after the IMF program was approved.


Implement new IMF Policy on Engagement with Civil Society

• The IMF should have an Executive Board approved policy and associated guidance note which is widely consulted on with civil society, and which requires IMF staff to engage and consult in meaningful ways with civil society.

• Mission chiefs should be required to meet with a wide range of stakeholders from civil society during each mission to the country while negotiating loan programs and during review missions of existing programs. This should include women’s rights organizations; organizations working on economic, fiscal justice and anti-corruption issues to name a few; and worker representatives, including care workers.

Improve Meaningfulness and Impact of Engagement

• IMF engagement with CSOs, especially around loan programs and Article IV consultations, should be predictable, structured and planned to allow CSOs enough time to schedule and prepare for meetings with the Fund’s staff and be clear about the purpose of these meetings.

• The IMF should be more transparent with the media and civil society on its negotiations with governments. It should disclose proposed policy reforms well ahead of finalizing them with governments and in advance of meetings with civil society.

• The IMF should systematically develop and disclose social/distributional impact assessments of policy proposals in advance to inform its discussions with civil society.

• The IMF should build its own capacity and understanding of social and human rights issues and hire staff members with a more diverse range of expertise and ideological backgrounds, to support more meaningful engagement with civil society.

Factor in Civic Space

• The degree of civic space openness should shape the engagement mechanism, including how formal and how ‘on the record’ it is, obtaining the consent of CSOs, including taking the necessary security measures to ensure their safety. There should consistently be clarity and commitment on what will happen with the information discussed in meetings.

• The IMF should develop a public position on retaliation against civil society as a result of engagement with the Fund.’

I presume a lot of ‘From Stunt to Substance’ will also apply to other multilaterals – World Bank, Regional Development Banks etc, so hope they are taking note. Would also be interested in hearing views on any differences.

January 12, 2023
Duncan Green