CPIA 2014 Criteria

Abstract

The country policy and institutional assessment (CPIA) assesses the quality of a country’s present policy and institutional framework. Quality refers to how conducive that framework is to fostering poverty reduction, sustainable growth, and the effective use of development assistance. The CPIA ratings are used in the International Development Association (IDA) allocation process and several other corporate activities. The Bank initiated country assessments in the late 1970s to help guide the allocation of IDA lending resources. The CPIA consists of a set of criteria representing the different policy and institutional dimensions of an effective poverty reduction and growth strategy. This criterion assesses the quality of monetary and exchange rate policies in a coherent macroeconomic policy framework. The objective is to evaluate whether the monetary and exchange rate policy framework is consistent with economic stability and sustained medium-term growth. This criterion covers the extent to which monetary and exchange rate policy framework: (a) maintains short- and medium-term internal and external balances, and is consistent with price stability objectives; and (b) offers flexibility to deal with internal and external shocks.