May 21, 2013


Background. This paper outlines reforms to increase the effectiveness of the Fund’s
capacity development (CD) program. It builds on the 2008 and 2011 reviews of
technical assistance (TA) and the 2008 review of training, which set in motion important
changes to make CD more valuable to member countries. Reforms will involve Board
endorsement in a few areas and implementation by staff of related next steps.

Board endorsement. The paper seeks endorsement for the following:

 The strengthening of CD governance, including updating the policy statement for
CD and mandating regular reviews of CD policies and activities.

 The principle of a two-level system of prioritization of CD activities: (i) the
institutional level, within the context of the Fund’s key objectives leading to the
broad composition of CD activities across regions and topics; and (ii) the country
level, driven by country demand. Prioritization is needed because demand outstrips
available resources.

 Three funding principles that guide Fund- and donor-financing of CD. The principles
aim (i) to ensure adequate funding for CD in crisis situations; (ii) to allow donor
financing when objectives coincide; and (iii) to rely on Fund financing when donor
support is not available.

 The enhancement of monitoring and evaluation to ensure more systematic
implementation of recommendations of CD reviews and to promote feedback of
lessons learned from evaluations into prioritization and delivery.

Next steps for staff. Staff proposes to implement the recommendations that garner
support from the Executive Board and related operational aspects of the strategy:
 Draft a new policy statement for Board endorsement. Prepare related staff guidance
notes, which will be circulated to the Board for information.

 Expand Results Based Management (RBM) coverage to all TA and training to focus
CD planning on outcomes and provide information for evaluation.

 Enhance CD effectiveness by exploiting TA and training synergies and harnessing
new technologies.

 Leverage CD, which is highly valued by the membership, as an outreach tool for the