© 2024 International Monetary Fund IMF POLICY PAPER REVIEW OF THE FUND’S CAPACITY DEVELOPMENT STRATEGY—BACKGROUND PAPERS IMF staff regularly produces papers proposing new IMF policies, exploring options for reform, or reviewing existing IMF policies and operations. The following document have been released and is included in this package: • Review of the Fund’s Capacity Development Strategy—Background Papers The documents listed below have been or will be separately released. A Press Release summarizing the views of the Executive Board as expressed during its April 4, 2024 consideration of the staff report. The Staff Report, prepared by IMF staff and completed on March 4, 2024 for the Executive Board’s consideration on April 4, 2024. The IMF’s transparency policy allows for the deletion of market-sensitive information and premature disclosure of the authorities’ policy intentions in published staff reports and other documents. Electronic copies of IMF Policy Papers are available to the public from http://www.imf.org/external/pp/ppindex.aspx International Monetary Fund Washington, D.C. April 2024 REVIEW OF THE FUND’S CAPACITY DEVELOPMENT STRATEGY—BACKGROUND PAPERS Approved By Michaela Erbenova (ICD) Prepared by an interdepartmental team in consultation with the Institute for Capacity Development (ICD) CONTENTS Glossary ___________________________________________________________________________________ 4 CD DELIVERY MODALITIES ______________________________________________________________ 7 A. Overview _______________________________________________________________________________ 7 B. Introduction ____________________________________________________________________________ 8 C. The New Normal ________________________________________________________________________ 9 D. Path Forward __________________________________________________________________________ 13 BOX 1. The New Normal for Other CD Providers ______________________________________________ 12 FIGURES 1. CD Delivery Modalities by Activity Count, FY2021–FY2023 ______________________________ 9 2. Delivery and Participation in IMF Online Courses, FY2022–FY2023 _____________________ 11 ANNEXES I. Delivery Modalities Terminology _______________________________________________________ 17 II. Transition to the New Normal in CD Departments _____________________________________ 21 III. RCDC Case Studies of the New Normal _______________________________________________ 31 IV. Blended Training Case Studies ________________________________________________________ 35 References _______________________________________________________________________________ 45 EVALUATION AND IMPACT ____________________________________________________________ 46 A. Overview ______________________________________________________________________________ 46 B. Introduction ___________________________________________________________________________ 47 C. The State of M&E at the Fund _________________________________________________________ 48 D. Tailoring, Effectiveness, and Impact of CD _____________________________________________ 54 E. Conclusion _____________________________________________________________________________ 65 March 4, 2024 CD STRATEGY REVIEW—BACKGROUND PAPERS 2 INTERNATIONAL MONETARY FUND FIGURES 1. Distribution of Evaluation of CD Completed between FY2018–FY2023 _____________________________ 50 2. Improvement in Data Completeness _______________________________________________________________ 52 3. Increase in Single Country Project __________________________________________________________________ 52 4. Evidence of Tailoring in Project Design _____________________________________________________________ 56 5. Text Mining of CD Country Strategy Notes _________________________________________________________ 56 6. Factors influencing RBM Outcome Ratings _________________________________________________________ 58 7. CARTAC Outcome Results vs. Resources Person Days ______________________________________________ 59 8. ICD Course Learning Gains _________________________________________________________________________ 60 9. Factors Influencing Learning Gains of ICD Courses _________________________________________________ 60 10. Average Differences in Outcome Improvements Between Treated and Untreated ________________ 62 11. Long-Run Impact of CD on Tax Revenue__________________________________________________________ 62 12. Impact of CD on VAT Revenues ___________________________________________________________________ 63 13. Correlation Matrix Macroeconomic Variables & Completed CD Projects _________________________ 64 ANNEXES I. RBM Risk Assessment and CD-Surveillance Integration _____________________________________________ 67 II. Analysis of Evaluations _____________________________________________________________________________ 69 III. Comparing Internal and External Evaluations ______________________________________________________ 72 IV