How structural adjustment programs affect inequality: A disaggregated analysis of IMF conditionality, 1980-2014

Social protection and the International Monetary Fund: promise versus performance

BACKGROUND

Countries in the Global South are currently facing momentous economic and social challenges, including major debt service problems. As in previous periods of global financial instability, a growing number of countries have turned to the International Monetary Fund (IMF) for financial assistance. The organization has a long track-record of advocating for extensive fiscal consolidation-commonly known as 'austerity'-for its borrowers. However, in recent years, the IMF has announced major initiatives for ensuring that its loans support social spending, thus aiding countries in meeting their development targets and the Sustainable Development Goals. To assess this track record, we collected spending data on 21 loans signed in the 2020-2022 period, including from all their periodic reviews up to August 2023.

RESULTS

We find that austerity measures remain a core part of the organization's mandated policies for its borrowers: 15 of the 21 countries studied here experience a decrease in fiscal space over the course of their IMF programs. Against this fiscal backdrop, social spending floors have failed to live up to their promise. There is no streamlined definition of these floors, thus rendering their application haphazard and inconsistent. But even on their own terms, these floors lack ambition: they often do not foresee trajectories of meaningful social spending increases over time, and, when they do, many of these gains are eaten up by soaring inflation. In addition, a third of social spending floors are not implemented-a much lower implementation rate from that for austerity conditions, which the IMF prioritizes. In several instances, where floors are implemented, they are not meaningfully exceeded, thus-in practice-acting as social spending ceilings.

CONCLUSIONS

The IMF's lending programs are still heavily focused on austerity, and its strategy on social spending has not represented the sea-change that the organization advertised. At best, social spending floors act as damage control for the painful budget cuts: they are instruments of social amelioration, underpinned by principles of targeted assistance for highly disadvantaged groups. Alternative approaches rooted in principles of universalism can be employed to build up durable and resilient social protection systems.

The effects of debt dependence on economic growth in less-developed countries, 1990-2019

Recent years have witnessed a dramatic increase in debt servicing for developing countries. Drawing on the theoretical insights of dependency theory, I investigate the relationship between debt dependence and economic growth in less-developed countries. Results from two-way fixed effects estimation of an expansive country-level dataset on 103 less-developed countries from 1990 to 2019 indicate that debt dependence exerts a harmful effect on economic growth, net of relevant statistical controls. I conclude by discussing the theoretical and policy implications of the empirical analyses.

Structural adjustment, alienation, and mass protest

The International Monetary Fund (IMF) is (in)famous for its structural adjustment programs, which provide fresh credit for borrowing governments in exchange for market-liberalizing policy reforms. While studies have documented a causal relationship between structural adjustment and political instability, scholarly understanding of the mechanisms underlying this relationship remain perfunctory. The received wisdom is that IMF policy conditions generate material hardship which then drives political instability. We advance an additional pathway-that instability is also prompted by alienation effects related to the foreign imposition of policies. Drawing on a sample of up to 168 countries between 1980 and 2014, we test for the presence of both mechanisms. Our results suggest that there are alienation effects, indicated by a persistent protest-inducing impact of IMF program participation when controlling for market-liberalizing conditions, and especially when programs are concluded by left-wing governments and non-repeat borrowers. We also find evidence of hardship effects, indicated by a positive relationship between the intensity of fiscal austerity required and the number of protests. Our findings have important implications for the relationship between structural adjustment, contentious politics, and the role of international organizations in domestic policy reform.

The effects of IMF loan conditions on poverty in the developing world

Although the International Monetary Fund (IMF) claims that poverty reduction is one of its objectives, some studies show that IMF borrower countries experience higher rates of poverty. This paper investigates the effects of IMF loan conditions on poverty. Using a sample of 81 developing countries from 1986 to 2016, we find that IMF loan arrangements containing structural reforms contribute to more people getting trapped in the poverty cycle, as the reforms involve deep and comprehensive changes that tend to raise unemployment, lower government revenue, increase costs of basic services, and restructure tax collection, pensions, and social security programmes. Conversely, we observe that loan arrangements promoting stabilisation reforms have less impact on the poor because borrower states hold more discretion over their macroeconomic targets. Further, we disaggregate structural reforms to identify the particular policies that increase poverty. Our findings are robust to different specifications and indicate how IMF loan arrangements affect poverty in the developing world.

SUPPLEMENTARY INFORMATION

The online version contains supplementary material available at 10.1057/s41268-022-00263-1.

When Coffee Collapsed: An Economic History of HIV in Uganda

In some Ugandan fishing communities, almost half the population lives with HIV. Researchers designate these communities "HIV hotspots" and attribute disproportionate disease burdens to "sex-for-fish" relationships endemic to the lakeshores. In this article, we trace the emergence of Uganda's HIV hotspots to structural adjustment. We show how global economic policies negotiated in the 1990s precipitated the collapse of Uganda's coffee sector, causing mass economic dislocation among women workers, who migrated to the lake. There, they entered overt forms of sex work or marriages they may have otherwise avoided, intimate economic arrangements that helped to "engineer the spread of HIV," as one respondent recounted.

The Structural Power of the State-Finance Nexus: Systemic Delinking for the Right to Development

The current era of financial hegemony is characterized by a dense financial actor concentration, an exacerbated reliance of many South countries on private credit and an internalized compliance of South states to financial market interests and priorities. This structural power of finance enacts itself through disciplinary mechanisms, such as credit ratings and economic surveillance, compelling many South states to respond to creditor interests at the expense of peoples' needs. As a human rights paradigm, the Declaration on the Right to Development has the active potential to redress the structural power of finance and the distortion of the role of the state through upholding the creation of an enabling international environment for equitable and rights-based development on two levels of change. First, structural policy reforms in critical areas of debt, fiscal policy, tax, trade, capital flows and credit rating agencies. Second, systemic transformation through delinking as articulated by dependency theorist Samir Amin, which entails a reorientation of national development strategies away from the imperatives of globalization to that of economic, social, and ecological priorities and interests of people.

The ethical-political dimension of social and community praxis: The case of Ecuador's early response to COVID-19

Around the globe, millions of people have experienced suffering and death related to COVID‐19, an infectious disease caused by the SARS‐CoV2 virus. In Ecuador,the painful impact of the pandemic elicited early responses by the government and by local communities. This critical, positioned and exploratory case study analyses such responses, underscoring the fundamental ethical–political dimension of any academic and professional praxis aimed at the construction of healthier societies worldwide. While critical traditions are familiar with this stance, the inequalities and ideological mechanisms made visible by COVID‐19 responses may enable the wider community of researchers and practitioners to join ongoing collective ethical–political efforts. Findings from Ecuador underline the potentially harmful role of neoliberalism and issues of democratic legitimacy, significant problems before and during the pandemic shock, and official discourses, which blame communities for their own suffering and death. Neutrality and depoliticized notions of scientific evidence are notoriously insufficient in these scenarios. We need to engage more deeply with diverse forms of global and local community resistance, in times of COVID‐19, and beyond. Please refer to the Supplementary Material section to find this article's Community and Social Impact Statement.

Characterizing 'health equity' as a national health sector priority for maternal, newborn, and child health in Ethiopia

Background: The pursuit of health equity is a priority in Ethiopia, especially with regards to maternal, newborn, and child health (MNCH). To date, there has been little characterization of the ‘problem’ of health inequity, and the normative assumptions implicit in the representation of the problem. Yet, such insights have implications for shaping the framing, incentivization, and implementation of health policies and their wider impact.

Objective: In this article, we characterize how health (in)equity is represented as a policy issue, how this representation came about, and the underlying assumptions.

Methods: We draw from Bacchi’s ‘what is the problem represented to be’ approach to explore how national-level actors in the health sector constitute the problem. The data for our analysis encompass 23 key informant interviews with national health sector actors working in leadership positions on MNCH in Ethiopia, and six policy documents. Findings were derived from thematic and content analysis.

Results: Health inequity is a normalized and inevitable concern that is regarded as actionable (can be altered) but not fully resolvable (can never be fully achieved). Operationally, health equity is viewed as a technocratic matter, reflected in the widespread use of metrics to motivate and measure progress. These representations are shaped by Ethiopia’s rapid expansion of health services into rural areas during the 2000s leading to the positive international attention and funding the country received for improved MNCH indicators. Expanding the coverage and efficiency of health service provision, especially in rural areas, is associated with economic productivity.

Conclusion: The metrication of health equity may detract from the fairness, justice, and morality underpinnings of the concept. The findings of this study point to the implications of global pressures in terms of maximizing health investments, and call into question how social, political, and economic determinants of health are addressed through broader development agendas.

Whatever it takes? The global financial safety net, Covid-19, and developing countries

Multilateral financial institutions have pledged to do whatever it takes to enable emerging market and developing countries to fill a $2.5 trillion financing gap to combat Covid-19 and subsequent economic crises. In this article, we present new datasets to track the extent to which multilateral financial institutions are meeting these goals, and conduct a preliminary assessment of progress to date. We find that the International Monetary Fund and the principal regional financial arrangements have made relatively trivial amounts of new financing available and have been slow to disburse the financing at their disposal. As of July 31, 2020, these institutions had committed $89.56 billion in loans and $550 million in currency swaps, totaling $90.11 billion-just 12.6% of their current capacity. The new datasets allow scholars, policymakers, and civil society to continue to track these trends, and eventually examine the impact of such financing on health and development outcomes.

Structural competency and global health education

Structural competency is a new curricular framework for training health professionals to recognise and respond to disease and its unequal distribution as the outcome of social structures, such as economic and legal systems, healthcare and taxation policies, and international institutions. While extensive global health research has linked social structures to the disproportionate burden of disease in the Global South, formal attempts to incorporate the structural competency framework into US-based global health education have not been described in the literature. This paper fills this gap by articulating five sub-competencies for structurally competent global health instruction. Authors drew on their experiences developing global health and structural competency curricula-and consulted relevant structural competency, global health, social science, social theory, and social determinants of health literatures. The five sub-competencies include: (1) Describe the role of social structures in producing and maintaining health inequities globally, (2) Identify the ways that structural inequalities are naturalised within the field of global health, (3) Discuss the impact of structures on the practice of global health, (4) Recognise structural interventions for addressing global health inequities, and (5) Apply the concept of structural humility in the context of global health.

A critical assessment of the ideological underpinnings of current practice in global health and their historical origins

Background: The current approach to global health has significantly contributed to improving it, as evidenced by the progress made toward the Millennium Development Goals (MDGs). However, the health gains achieved are often highly unequitable, and the current approach is expected to be insufficient to meet the future health equity challenges. There is an urgent need to re-think and expand the scope of research and programmatic strategies.

Objective: This paper aims to assess the ideological underpinnings of the currently dominant norms in global health, with the goal of highlighting the research and programmatic areas that are marginalized and warrant greater efforts in order to resolve persistent health inequity and achieve the UN Sustainable Development Goals (SDGs).

Methods: We have conducted a critical review of the literature that traces the historical origins of global health to the period between the mid-19th century and the end of the 20th century.

Results: Critical review of the historical origins of global health reveals a set of dominant norms in global health that are ideological in character, and profoundly shape the current practice. We identified key manifestations of the ideological underpinnings as 1) Democratic deficit, 2) Depoliticization of the discourse, 3) Marginalization of the scholarship that interrogates the relations of power.

Conclusion: Examination of the dominant norms that shape the foundation of our knowledge and action in global health is required to solve persistent health inequity challenges and meet the SDGs. Inversion of the key manifestations of the dominant norms can serve as guiding principles to elaborate alternative frameworks that have the theoretical and programmatic potential for a fundamental rather than an incremental change in the practice of global health.

"Madness and Despair are a Force": Global Mental Health, and How People and Cultures Challenge the Hegemony of Western Psychiatry

The author suggests to consider some important hidden connections in Global Mental Health (GMH) discourse and interventions, above all the political meaning of suffering and symptoms, the power of psychiatric diagnostic categories (both Western and traditional) to name and to occult at once other conflicts, and the implicit criticism expressed by so-called local healing knowledge and its epistemologies. These issues, by emphasizing the importance to explore other ontologies, help to understand the perplexity and resistance that GMH and its agenda meet among many scholars and professionals, who denounce the risks of reproducing and globalizing Western hegemonic values concerning health, illness, and healing.

Power asymmetries in global governance for health: a conceptual framework for analyzing the political-economic determinants of health inequities

Background

Recent scholarship has increasingly identified global power asymmetries as the root cause of health inequities. This article examines how such asymmetries manifest in global governance for health, and how this impacts health outcomes.

Results

We focus on the political-economic determinants of global health inequities, and how these determinants operate at different levels of social action (micro, meso, and macro) through distinct but interacting mechanisms. To clarify how these mechanisms operate, we develop an integrative framework for examining the links between global neoliberalism—the currently dominant policy paradigm premised on advancing the reach of markets and promoting ever-growing international economic integration—and global health inequities, and show how these mechanisms have macro–macro, macro–meso–macro, and macro–micro–macro manifestations.

Conclusions

Our approach enables the design of theoretically-nuanced empirical strategies to document the multiple ways in which the political economy entrenches or, alternatively, might ameliorate global health inequities.

Globalization and health equity: The impact of structural adjustment programs on developing countries

Among the many drivers of health inequities, this article focuses on important, yet insufficiently understood, international-level determinants: economic globalization and the organizations that spread market-oriented policies to the developing world. One such organization is the International Monetary Fund (IMF), which provides financial assistance to countries in economic trouble in exchange for policy reforms. Through its 'structural adjustment programs,' countries around the world have liberalized and deregulated their economies. We examine how policy reforms prescribed in structural adjustment programs explain variation in health equity between nations-approximated by health system access and neonatal mortality. Our empirical analysis uses an original dataset of IMF-mandated policy reforms for a panel of up to 137 developing countries between 1980 and 2014. We employ regression analysis to evaluate the relationship between these reforms and health equity, taking into account the non-random selection and design of IMF programs. We find that structural adjustment reforms lower health system access and increase neonatal mortality. Additional analyses show that labor market reforms drive these deleterious effects. Overall, our evidence suggests that structural adjustment programs endanger the attainment of Sustainable Development Goals in developing countries.