Advertisement

The Effects of IMF Operations on Social Expenditure

  • Imad A. MoosaEmail author
  • Nisreen Moosa
Chapter
First Online:

Abstract

Social expenditure is public spending on education and health, although it is reasonable to think it also covers expenditure on such things as child care. The IMF has been criticised, for promoting policies that weaken social protection, by academics, civil society organisations and international organisations. Despite denial by the IMF, its operations have an adverse effect on public spending on health and education. The policies, including spending cuts and redirection, have an adverse effect on the ability of people to pay for private healthcare through austerity, poverty and the rising cost of healthcare. Through both supply and demand factors, IMF operations reduce per capita consumption of healthcare.

Keywords

Social expenditure Healthcare Education Poverty Inequality Public sector wage-bill ceilings Macroeconomic stability 
This is a preview of subscription content, log in to check access.

References

  1. Baker, B. K. (2010). The Impact of the International Monetary Fund’s Macroeconomic Policies on the AIDS Pandemic. International Journal of Health Services, 40, 347–363.CrossRefGoogle Scholar
  2. Barro, R., & Lee, J. W. (2005). IMF Programs: Who Is Chosen and What Are the Effects? Journal of Monetary Economics, 52, 1245–1269.CrossRefGoogle Scholar
  3. Benson, J. S. (2001). The Impact of Privatization on Access in Tanzania. Social Science &. Medicine, 52, 1903–1916.CrossRefGoogle Scholar
  4. Bird, G., & Rowlands, D. (2007). The IMF and the Mobilisation of Foreign Aid. Journal of Development Studies, 43, 856–870.CrossRefGoogle Scholar
  5. Center For Global Development. (2007). Does The IMF Constrain Health Spending in Poor Countries? Evidence and an Agenda for Action. https://www.cgdev.org/files/14103_file_IMF_report.pdf
  6. Clements, B., & Gupta, S. (2017, December 6). When Reality Doesn’t Bite—Misconceptions about the IMF and Social Spending. https://www.huffingtonpost.com/benedict-clements/when-reality-doesnt-bitem_b_943862.html
  7. Clements, B., Gupta, S., & Nozaki, M. (2013). What Happens to Social Spending in IMF-Supported Programmes? Applied Economics, 45, 4022–4033.CrossRefGoogle Scholar
  8. Crivelli, E., & Gupta, S. (2016). Does Conditionality in IMF-Supported Programs Promote Revenue Reform? International Tax Public Finance, 23, 550.CrossRefGoogle Scholar
  9. Daoud, A., Nosrati, E., Reinsberg, B., Kentikelenis, A. E., Stubbs, T. H., & King, L. P. (2017). Impact of International Monetary Fund programs on Child Health. PNAS, 114, 6492–6497.CrossRefGoogle Scholar
  10. Djibuti, M., Rukhadze, N., Hotchkiss, D. R., Eisele, T. P., & Silvestre, E. A. (2007). Health Systems Barriers to Effective Use of Infectious Disease Surveillance Data in the Context of Decentralization in Georgia: A Qualitative Study. Health Policy, 83, 323–331.CrossRefGoogle Scholar
  11. Dreher, A. (2006). IMF and Economic Growth: The Effects of Programs, Loans, and Compliance with Conditionality. World Development, 34, 769–788.CrossRefGoogle Scholar
  12. Financial Services Committee. (2007, November 14). Letter to the Managing Director of the IMF from the House Financial Services Committee of the US Congress.Google Scholar
  13. Glassman, A. (2011, January 19). Bring Out the Punching Bag Again: The IMF, Aid, and Public Spending on Health. Global Health Policy Blog. https://www.cgdev.org/blog/bring-out-punching-bag-again-imf-aid-and-public-spending-health
  14. Global Coalition for Social Protection Floors. (2017, October 25). Statement to the IMF on the Findings of the Evaluation Report and the IMF’s Approach Towards Social Protection. http://www.socialprotectionfloorscoalition.org/2017/10/statement-to-the-imf-on-the-findings-of-the-evaluation-report-and-the-imfs-approach-towards-social-protection/
  15. Goldsborough, D. (2007). Does the IMF Constrain Health Spending in Poor Countries? Evidence and an Agenda for Action. Washington, DC: Center for Global Development.Google Scholar
  16. Gould, E. R. (2003). Money Talks: Supplementary Financiers and International Monetary Fund Conditionality. International Organizations, 57, 551–586.CrossRefGoogle Scholar
  17. Government Accountability Office. (2001). International Monetary Fund: Few Changes Evident in Design of New Lending Program for Poor Countries, Washington, DC.Google Scholar
  18. Griffiths, J., & Brunswijck, G. (2018, May 15). IMF Conditionality: Still Undermining Healthcare and Social Protection?. http://www.cadtm.org/IMF-conditionality-still
  19. Gupta, S. (2010). Response of the International Monetary Fund to its Critics. International Journals of Health Services, 40, 323–326.CrossRefGoogle Scholar
  20. Gupta, S. (2014, December 22). IMF Response to the Lancet Article on “The International Monetary Fund and the Ebola Outbreak”. http://www.imf.org/en/News/Articles/2015/09/28/04/54/vc122214
  21. Gupta, S. (2015). Response to “The international Monetary Fund and the Ebola Outbreak”. Lancet Global Health, 3, 78.CrossRefGoogle Scholar
  22. Gupta, S. (2017). Can a Causal Link be Drawn? A Commentary on “The Impact of IMF Conditionality on Government Health Expenditure: A Cross-National Analysis of 16 West African Nations”. Social Science & Medicine, 181, 199–201.CrossRefGoogle Scholar
  23. Gupta, S., & Shang, B. (2017). Public Spending on Health Care under IMF-Supported Programs. https://blogs.imf.org/2017/03/09/public-spending-on-health-care-under-imf-supported-programs/#more-17249
  24. Gupta, S., Clements, B., & Tiongson, E. (1998). Public Spending on Human Development. Finance and Development, 35, 10–13.Google Scholar
  25. Gupta, S., Dicks-Mireaux, L., Khemani, R., McDonald, C., & Verhoeven, M. (2000). Social Issues in IMF-Supported Programs. IMF Occasional Papers, No. 191.Google Scholar
  26. Hoddie, M., & Hartzell, C. A. (2014). Short-Term Pain, Long-Term Gain? The Effects of IMF Economic Reform Programs on Public Health Performance. Social Science Quarterly, 95, 1042–2014.Google Scholar
  27. Homedes, N., & Ugalde, A. (2005). Why Neoliberal Health Reforms Have Failed in Latin America. Health Policy, 71, 83–96.CrossRefGoogle Scholar
  28. Huber, E., Mustillo, T., & Stephens, J. D. (2008). Politics and Social Spending in Latin America. Journal of Politics, 70, 420–436.CrossRefGoogle Scholar
  29. IEO. (2003). Fiscal Adjustment in IMF-Supported Programs. Washington, DC: IMF Independent Evaluation Office.Google Scholar
  30. IEO. (2007). The IMF and Aid to Sub-Saharan Africa. Washington, DC: IMF Independent Evaluation Office.Google Scholar
  31. IMF. (2015). Protecting the Most Vulnerable under IMF-Supported Programs. IMF Factsheet. http://www.imf.org/external/np/exr/facts/protect.htm
  32. Jensen, N. (2004). Crisis, Conditions, and Capital: The Effect of International Monetary Fund Agreements on Foreign Direct Investment Inflows. Journal of Conflict Resolution, 48, 194–210.CrossRefGoogle Scholar
  33. Kentikelenis, A. (2015). Bailouts, Austerity and the Erosion of Health Coverage in Southern Europe and Ireland. European Journal of Public Health, 25, 365–366.CrossRefGoogle Scholar
  34. Kentikelenis, A., King, L., McKee, M., & Stuckler, D. (2014). The International Monetary Fund and the Ebola Outbreak. The Lancet Global Health, 1–2.  https://doi.org/10.1016/S2214-109X(14)70377-8.CrossRefGoogle Scholar
  35. Kentikelenis, A., King, L., McKee, M., & Stuckler, D. (2015a). The International Monetary Fund and the Ebola Outbreak. Lancet Global Health, 3, 69–70.CrossRefGoogle Scholar
  36. Kentikelenis, A., Stubbs, T., & King, L. (2015b). Structural Adjustment and Public Spending on Health: Evidence from IMF Programs in Low-Income Countries. Social Science & Medicine, 126, 169–176.CrossRefGoogle Scholar
  37. Kentikelenis, A., Stubbs, T., & King, L. (2016a, May 25). The IMF Has Not Lived Up to Its Own Hype on Social Protection. The Guardian.Google Scholar
  38. Kentikelenis, A., Stubbs, T., & King, L. (2016b). IMF Conditionality and Development Policy Space, 1985–2014. Review of International Political Economy, 23, 543–582.CrossRefGoogle Scholar
  39. Keynes, J. M. (1923). A Tract on Monetary Reform. London: Macmillan.Google Scholar
  40. Lagarde, C. (2017, June 6). Protecting Education and Health Spending in Low-Income Countries. https://blogs.imf.org/2017/06/06/protecting-education-and-health-spending-in-low-income-countries/
  41. Leamer, E. (1983). Let’s Take the Con out of Econometrics. American Economic Review, 73, 31–43.Google Scholar
  42. Loewenson, R. (1995). Structural Adjustment and Health Policy in Africa. International Journal of Health Services, 23, 717–730.CrossRefGoogle Scholar
  43. Lu, C., Schneider, M. T., Gubbins, P., Leach-Kemon, K., Jamison, D., & Murray, C. J. (2010). Public Financing of Health in Developing Countries: A Cross-National Systematic Analysis. The Lancet, 375, 1375–1387.CrossRefGoogle Scholar
  44. Medical Express. (2009). Death Surge Linked with Mass Privatisation. https://medicalxpress.com/news/2009-01-death-surge-linked-mass-privatisation.html
  45. Metinsoy, S. (2016, May 17). Do IMF Programmes Increase Social Spending?. https://blog.politics.ox.ac.uk/imf-programmes-increase-social-spending/
  46. Moosa, I. A. (2012). The Failure of Financial Econometrics: “Stir-Fry” Regressions as an Illustration. Journal of Financial Transformation, 34, 43–50.Google Scholar
  47. Moosa, I. A. (2017). Econometrics as a Con Art: Exposing the Limitations and Abuse of Econometrics. Cheltenham: Edward Elgar.CrossRefGoogle Scholar
  48. Nooruddin, I., & Simmons, J. W. (2006). The Politics of Hard Choices: IMF Programs and Government Spending. International Organization, 60, 1001–1033.CrossRefGoogle Scholar
  49. Ooms, G., & Schrecker, T. (2005). Expenditure Ceilings, Multilateral Financial Institutions, and the Health of Poor Populations. The Lancet, 365, 1821–1823.CrossRefGoogle Scholar
  50. Ortiz, I., Cummins, M., Capaldo, J., & Karunanethy, K. (2015). The Decade of Adjustment: A Review of Austerity Trends 2010–2020 in 187 Countries. ESS Working Papers, No. 53.Google Scholar
  51. Oxfam. (1995). The Oxfam Poverty Report. Oxford: Oxfam.Google Scholar
  52. Pitt, M. (1993). Analyzing Human Resource Effects: Health. In L. Demery, M. A. Ferroni, & C. Grootaert (Eds.), Analyzing the Effects of Policy Reforms. Washington, DC: World Bank.Google Scholar
  53. Pollin, R., & Zhu, A. (2006). Inflation and Economic Growth: A Cross-Country Nonlinear Analysis. Journal of Post Keynesian Economics, 28, 593–614.CrossRefGoogle Scholar
  54. Przeworski, A., & Vreeland, J. (2000). The Effect of IMF Programs on Economic Growth. Journal of Development Economics, 62, 385–421.CrossRefGoogle Scholar
  55. Rowden, R. (2009a, December 11). IMF Survey: Concern over IMF Impact on Health Spending. https://www.imf.org/en/News/Articles/2015/09/28/04/53/sorea121109a
  56. Rowden, R. (2009b). The Deadly Ideas of Neoliberalism: How the IMF Has Undermined Public Health and the Fight against AIDS. London: Zed Books.Google Scholar
  57. Rowden, R. (2010). Doing a Decent Job? IMF Policies and Decent Work in Times of Crisis. SOLIDAR. http://cms.horus.be/files/99931/MediaArchive/GNreport_IMF%20and%20DW_MAIL.pdf
  58. Sen, K., & Koivusalo, M. (1998). Health Care Reforms and Developing Countries: A Critical Overview. International Journal of Health Planning and Management, 13, 199–215.CrossRefGoogle Scholar
  59. Sridhar, D., & Woods, N. (2010). Are there Simple Conclusions on how to Channel Health Funding? The Lancet, 375, 1326–1328.CrossRefGoogle Scholar
  60. Stubbs, T., & Kentikelenis, A. (2017, February 23). How Years of IMF Prescriptions Have Hurt West African Health Systems. http://theconversation.com/how-years-of-imf-prescriptions-have-hurt-west-african-health-systems-72806
  61. Stubbs, T., Kentikelenis, A., & King, L. (2016). Catalyzing Aid? The IMF and Donor Behavior in Aid Allocation. World Development, 78, 511–528.CrossRefGoogle Scholar
  62. Stubbs, T., Kentikelenis, A., Stuckler, D., McKee, M., & King, L. (2017a). The Impact of IMF Conditionality on Government Health Expenditure: A Cross-National Analysis of 16 West African Nations. Social Science and Medicine, 174, 220–227.CrossRefGoogle Scholar
  63. Stubbs, T., Kentikelenis, A., Stuckler, D., & McKee, M. (2017b). The IMF and Government Health Expenditure: A Response to Sanjeev Gupta. Social Science and Medicine, 181, 202–204.CrossRefGoogle Scholar
  64. Stuckler, D., & Basu, S. (2009). The International Monetary Fund’s Effects on Global Health: Before and After the 2008 Financial Crisis. International Journal of Health Services, 39, 771–781.CrossRefGoogle Scholar
  65. Stuckler, D., King, L., & Basu, S. (2008). International Monetary Fund Programs and Tuberculosis Outcomes in Post-Communist Countries. PLoS Medicine, 5, 1079–1090.CrossRefGoogle Scholar
  66. Stuckler, D., Basu, S., & McKee, M. (2011). International Monetary Fund and Aid Displacement. International Journal of Health Services, 41, 67–76.CrossRefGoogle Scholar
  67. The Guardian. (2011, January 17). Poor Countries with IMF Loans Divert Aid from Public Health.Google Scholar
  68. The Lancet. (2015). The International Monetary Fund and the Ebola Outbreak. 3(2), e69–e70.Google Scholar
  69. Turshen, M. (1999). Privatizing Health Services in Africa. New Brunswick: Rutgers University Press.Google Scholar
  70. van der Hoeven, R., & Stewart, F. (1993). Social Development During Periods of Structural Adjustment in Latin America. ILO Occasional Papers, 18, 1–32.Google Scholar
  71. Wojnilower, J. (2017). External Perspectives on the IMF and Social Protection, Background Document BD/17-01/02. International Evaluation Office.Google Scholar

Copyright information

© The Author(s) 2019

Authors and Affiliations

  1. 1.School of EconomicsRMIT School of EconomicsMelbourneAustralia
  2. 2.University of South AustraliaAdelaideAustralia

Personalised recommendations

Cite chapter

Buy options