Evolving engagement: How local players build on IMF governance efforts

Local reform movements and citizen initiatives are increasingly engaging with the International Monetary Fund in unconventional ways: not just as critics, but as collaborators helping shape reform. As countries across the world confront rising debt and public demand for accountability, anti-corruption advocates are using the IMF’s governance diagnostics — country assessments that map out corruption risks, transparency gaps, and institutional weaknesses, along with policy guidance to fix them —  to push for transparency, integrity, and citizen participation.

At an event hosted by Devex in partnership with Open Society Foundations and Transparency International U.S. — with support from the Okoa Uchumi Coalition — on the sidelines of the World Bank and International Monetary Fund annual meetings, speakers explored how local players and international financial institutions can work together to scale anti-corruption and governance reforms. Across two panel discussions, the conversation brought together perspectives from the IMF, civil society, investors, and lawmakers to ask a timely question: How can local groups harness IMF governance diagnostics to deliver better results for the people?

A new model for accountability

Throughout the discussions, speakers focused on how local partners — including nongovernmental organizations, advocacy groups, and citizen-led initiatives — can work with these IMF diagnostics to advance reforms that make national leadership more accountable, policymaking more transparent, and economies more stable.

“The purpose of the diagnostic is to help countries identify governance vulnerabilities and corruption risks that can undermine stability,” said Joel Turkewitz, deputy division chief in the IMF’s legal department. “But what’s equally important is how those findings are used — by governments, civil society, and development partners — to actually drive reform.”

Traditionally, the policy reforms and fiscal requirements tied to IMF loans, known as “conditionality,” were seen as top-down impositions, often leading to tension among governments and citizens alike. The rise of governance diagnostics, however, opens new space for collaboration rooted in evidence and shared accountability. “The theory behind a governance diagnostic is that economic reform is done most effectively when it is also combined with reforms relating to accountability and integrity,” Turkewitz added. “By combining those in a unified approach, you have greater salience and probability of success of your economic governance reforms.”

Since 2018, the IMF has completed 21 governance diagnostic exercises; the decision to publish the final report is left to the member country requesting the exercise. Recently, local coalitions in countries where the IMF has completed or is undertaking diagnoses have begun conducting their own reports: citizen-led assessments that highlight governance and rule of law deficiencies and recommend reforms they believe the IMF and governments should address in their lending agreements.

By publishing their own diagnostics, these groups can pressure governments to act while offering investors and policymakers an independent benchmark for progress. Nishan de Mel, executive director of Verité Research — an independent think tank in Sri Lanka that provides strategic analysis for governments — stressed that these tools should not be understood as “shadow diagnostics” (nor should the IMF’s diagnostics be understood as “the real thing”).

Rather, they are a “people’s diagnostic” which analyzes the problem from the citizens’ point of view, according to Sheila Masinde, executive director of Transparency International Kenya. “Engaging with the IMF through our own diagnostic gave us a stronger platform to advocate for reforms that matter to Kenyans — debt transparency, access to information, and public participation,” she explained, “while maintaining our independence.”

Prioritizing collaboration and local ownership

Speakers emphasized that such engagement must remain locally led: Civil society shouldn’t simply echo donor priorities, but should define reform agendas based on citizen needs and sustain pressure once programs are agreed. Equally, the IMF’s openness to partnership will be tested by how it responds to independent assessments and critical feedback.

“We have to make sure these processes don’t become one-off moments,” said Zachary Kwenya Thuku, a member of Kenya’s Parliament. “Parliament, the media, and citizens all have a role in monitoring implementation — otherwise the reforms risk staying on paper.”

Panelists concluded that governance diagnostics should evolve into “living frameworks” that track progress and maintain public dialogue. Partnerships between civil society and international financial institutions must also expand to include oversight bodies, private sector players, and regional networks — ensuring that transparency commitments translate into real accountability.

Lessons from Kenya and Sri Lanka

Kenya and Sri Lanka offer compelling examples of how citizen-led approaches can influence governance and fiscal reform.

In Sri Lanka, the IMF’s first governance diagnostic in Asia provided a framework for addressing systemic corruption and fiscal opacity. Civil society organizations helped translate the findings into public advocacy campaigns that built political momentum for reform.

“The diagnostic provided a space for engagement between government, civil society, and the IMF that simply hadn’t existed before,” said de Mel. “When local evidence and perspectives shape that dialogue, the outcomes are far stronger and more relevant to the country’s own priorities.”

In Kenya, Transparency International Kenya and the Okoa Uchumi Coalition released a summary of their own governance diagnostic to complement the IMF’s. The exercise brought together citizen data, watchdog group reports, and parliamentarian input to identify priorities often overlooked in macroeconomic discussions — from debt transparency to social spending safeguards.

“It was challenging,” admitted Diana Gichengo, executive director of the Institute for Social Accountability, or TISA, and the convenor of the Okoa Uchumi Campaign. “Building trust with both the IMF and government wasn’t automatic. But once we demonstrated that our analysis was constructive and evidence-based, the process opened doors for more meaningful engagement.”

Speakers noted that the results were tangible: greater public awareness, more inclusive dialogue, and early signs of policy change. Together, these experiences suggest that meaningful reform is possible when global and local partners find common ground.

The role of investors and markets

Beyond civil society, the discussion also turned to the private sector — and how governance affects investor confidence in emerging markets. Financial leaders underscored that transparency and strong institutions are not just moral imperatives but economic stabilizers. When countries demonstrate credible progress on anti-corruption initiatives and fiscal integrity, capital costs decline and investment prospects improve.

Samy Muaddi, head of emerging markets at T. Rowe Price, made the point that good governance is “absolutely necessary” to encourage investment. “Don't take for granted that there's money available to finance [emerging markets],” he said. “You probably think about finance as a way for a country to bridge its present to its future. The investors largely don't think about it that way, right? It's a bond — as a coupon — and that category of income is a fiercely competitive category. And there are many, many other options for investors to own besides emerging market sovereign debt.”

Participants noted that investors are increasingly incorporating governance indicators into their risk assessments. IMF programs that integrate anti-corruption benchmarks can send positive signals to markets — but short-term political or fiscal adjustments can undermine confidence if reforms are perceived as superficial or fragile.

“As investors, we want to see reform stick,” Muaddi added. “That means aligning fiscal discipline with social protection and inclusion — because stability is not sustainable if it leaves people behind.”

This perspective underscores the idea that effective governance reform is not only a political or civic challenge — it’s also a market imperative. Aligning incentives among governments, citizens, and investors can turn good governance into a competitive advantage for countries emerging from debt distress.

True reform requires more than financial signals. It depends on sustained dialogue, local ownership, and institutions that deliver accountability. Civil society is increasingly stepping into that role. As Kenya and Sri Lanka demonstrate, the path to stronger governance may run through the very institutions once viewed as obstacles. The challenge now is to scale these experiments without losing the independence, inclusivity, and credibility that make them work.

Watch Strengthening governance through the IMF: Lessons from Kenya and beyond on YouTube.