Thomas Stubbs

IMF conditionality and development policy space, 1985–2014

ABSTRACT In recent years, the International Monetary Fund (IMF) has re-emerged as a central actor in global economic governance. Its rhetoric and policies suggest that the organization has radically changed the ways in which it offers financial assistance to countries in economic trouble. We revisit two long-standing controversies: Has the policy content of IMF programmes evolved to allow for more policy space? Do these programmes now allow for the protection of labour and social policies? We collected relevant archival material on the IMFs lending operations and identified all policy conditionality in IMF loan agreements between 1985 and 2014, extracting 55,465 individual conditions across 131 countries in total. We find little evidence of a fundamental transformation of IMF conditionality. The organizations post-2008 programmes reincorporated many of the mandated reforms that the organization claims to no longer advocate and the number of conditions has been increasing. We also find that policies introduced to ameliorate the social consequences of IMF macroeconomic advice have been inadequately incorporated into programme design. Drawing on this evidence, we argue that multiple layers of rhetoric and ceremonial reforms have been designed to obscure the actual practice of adjustment programmes, revealing an escalating commitment to hypocrisy.

Structural adjustment and public spending on health: Evidence from IMF programs in low-income countries

The relationship between health policy in low-income countries (LICs) and structural adjustment programs devised by the International Monetary Fund (IMF) has been the subject of intense controversy over past decades. While the influence of the IMF on health policy can operate through various pathways, one main link is via public spending on health. The IMF has claimed that its programs enhance government spending for health, and that a number of innovations have been introduced to enable borrowing countries to protect health spending from broader austerity measures. Critics have pointed to adverse effects of Fund programs on health spending or to systematic underfunding that does not allow LICs to address health needs. We examine the effects of Fund programs on government expenditures on health in low-income countries using data for the period 1985-2009. We find that Fund programs are associated with higher health expenditures only in Sub-Saharan African LICs, which historically spent less than any other region. This relationship turns negative in LICs in other regions. We outline the implications of these findings for health policy in a development context.

Relative surplus population and uneven development in the neoliberal era: Theory and empirical application

This paper offers the groundwork of an alternative to mainstream (un)employment theory that builds on Marx’s account of the ‘active army’ and ‘relative surplus population’. With special application to the current neoliberal era, Marx’s long-range labour market analysis is connected to a mid-range account of capitalism’s uneven development in historical practice. This alternative approach is then adapted to an ‘empirically adequate’ statistical mapping of the relative surplus population’s contemporary global composition. Under neoliberal global capitalism, the relative surplus population is identified as being larger than the active army, and is unevenly composed and distributed across developed, developing and underdeveloped countries.

The impact of IMF conditionality on government health expenditure: A cross-national analysis of 16 West African nations

How do International Monetary Fund (IMF) policy reforms-so-called conditionalities-affect government health expenditures? We collected archival documents on IMF programmes from 1995 to 2014 to identify the pathways and impact of conditionality on government health spending in 16 West African countries. Based on a qualitative analysis of the data, we find that IMF policy reforms reduce fiscal space for investment in health, limit staff expansion of doctors and nurses, and lead to budget execution challenges in health systems. Further, we use cross-national fixed effects models to evaluate the relationship between IMF-mandated policy reforms and government health spending, adjusting for confounding economic and demographic factors and for selection bias. Each additional binding IMF policy reform reduces government health expenditure per capita by 0.248 percent (95% CIxa0-0.435 toxa0-0.060). Overall, our findings suggest that IMF conditionality impedes progress toward the attainment of universal health coverage.

Impact of International Monetary Fund programs on child health

Significance This study adds to the state of the art by analyzing the impact of International Monetary Fund (IMF) programs on children’s health, mediated by their parents’ education. It is the first to combine macrodata and microdata to address this issue systematically across five dimensions of child health: water, malnutrition, shelter, sanitation, and health care access. The sample represents about 2.8 billion (about 50%) of the world’s population in year 2000. Using multilevel models, we find that, although IMF programs do not correlate directly with child health indicators, they reduce the protective effect of parental education on child health, especially in rural areas, and have a mixed impact across the five dimensions of urban child health. Parental education is located at the center of global efforts to improve child health. In a developing-country context, the International Monetary Fund (IMF) plays a crucial role in determining how governments allocate scarce resources to education and public health interventions. Under reforms mandated by IMF structural adjustment programs, it may become harder for parents to reap the benefits of their education due to wage contraction, welfare retrenchment, and generalized social insecurity. This study assesses how the protective effect of education changes under IMF programs, and thus how parents’ ability to guard their children’s health is affected by structural adjustment. We combine cross-sectional stratified data (countries, 67; children, 1,941,734) from the Demographic and Health Surveys and the Multiple Indicator Cluster Surveys. The sample represents ∼2.8 billion (about 50%) of the world’s population in year 2000. Based on multilevel models, our findings reveal that programs reduce the protective effect of parental education on child health, especially in rural areas. For instance, in the absence of IMF programs, living in an household with educated parents reduces the odds of child malnourishment by 38% [odds ratio (OR), 0.62; 95% CI, 0.66–0.58]; in the presence of programs, this drops to 21% (OR, 0.79; 95% CI, 0.86–0.74). In other words, the presence of IMF conditionality decreases the protective effect of parents’ education on child malnourishment by no less than 17%. We observe similar adverse effects in sanitation, shelter, and health care access (including immunization), but a beneficial effect in countering water deprivation.

Competition states in the neoliberal era: Towards third-generation regulation theory

The Varieties of Capitalism approach envisages a process by which national capitalisms converge towards two distinct institutional formations. In contrast, it is argued here that countries singularly converge towards the regulatory bias of the prevailing model of development, but divergence exists within this convergence because unevenly developing countries respond contingently to the regulatory dilemmas of capitalism. This claim is empirically assessed for the neoliberal model of development. The findings show that countries prioritize competitiveness by pursuing differing mixes of neoliberal and non-neoliberal elements. This variation is mapped onto a six-pronged typology of ‘competition states’. Overall, this revised regulation approach broadens and deepens insights into national regulatory dilemmas and responses to the prevailing model of development.

Structural adjustment programmes adversely affect vulnerable populations: a systematic-narrative review of their effect on child and maternal health

Structural adjustment programmes of international financial institutions have typically set the fiscal parameters within which health policies operate in developing countries. Yet, we currently lack a systematic understanding of the ways in which these programmes impact upon child and maternal health. The present article systematically reviews observational and quasi-experimental articles published from 2000 onward in electronic databases (PubMed/Medline, Web of Science, Cochrane Library and Google Scholar) and grey literature from websites of key organisations (IMF, World Bank and African Development Bank). Studies were considered eligible if they empirically assessed the aggregate effect of structural adjustment programmes on child or maternal health in developing countries. Of 1961 items yielded through database searches, reference lists and organisations’ websites, 13 met the inclusion criteria. Our review finds that structural adjustment programmes have a detrimental impact on child and maternal health. In particular, these programmes undermine access to quality and affordable healthcare and adversely impact upon social determinants of health, such as income and food availability. The evidence suggests that a fundamental rethinking is required by international financial institutions if developing countries are to achieve the Sustainable Development Goals on child and maternal health.

Targeted social safeguards in the age of universal social protection: the IMF and health systems of low-income countries

Abstract In offering loans to low-income countries in exchange for policy reforms, the International Monetary Fund (IMF) typically sets the fiscal parameters within which health systems develop. In a recent report released by the organisation, the IMF claims that their programmes have promoted social protection, including access to health care. We revisit the findings presented in the IMF’s assessment. Drawing on material collected from the IMF and empirical analyses, we show that the report is methodologically flawed, unduly optimistic and potentially misleading. We conclude by reflecting on the IMF’s steadfast endorsement of targeted social assistance, despite a global tide turn towards universal social provision.

The IMF and government health expenditure: A response to Sanjeev Gupta

Do policy conditions attached to International Monetary Fund (IMF) lending programmes have an impact on government health expenditure in developing countries? Yes, according to a large body of literature (see Kentikelenis, 2017), and our recent article (Stubbs et al., 2017). We systematically reviewed IMF loan agreements and staff reports to generate a database of “binding” conditions that could plausibly impact health expenditure. Our database offered an alternative to the IMFs own conditionality dataset, which has been widely criticized for inaccuracies and omissions (Arpac et al., 2008; IEO, 2007). Using cross-national models covering 16 West African countries between 1995 and 2014, we found that each additional binding IMF policy reform reduces government health expenditure per capita by 0.25% (95% CI -0.44 to −0.06). The mean number of binding conditions, at 25 per year, thus corresponds to a 6.21% reduction, on average, in government health spending per capita associated with IMF conditions. To further test these findings, we performed a narrative review of these documents. They showed that IMF policy reforms reduce fiscal space for health investment, limit expansion of doctors and nurses, and undermine health system efficiency. It was clear that IMF programmes placed enormous pressure on already strained health systems, reducing health spending at times when economic crises placed more people in harms way. In the comment on our research paper, Sanjeev Gupta (2017), deputy director of the IMFs influential Fiscal Affairs Department, disagrees. Here we take each of his points in turn. First, Gupta asks, “is the qualitative method adopted by the article suitable for drawing causal inferences?” Qualitative research can serve as an additional source of data that can greatly increase our confidence in quantitative findings. Importantly, it can help elucidate the mechanisms through which a given intervention or reform affects outcomes, rather than merely treating these mechanisms as a ‘black box’. Social scientists have long since reached a consensus that mixed-methods research designs can strengthen the validity of inferences (consistent with Bayesian thinking about causality).

Economic growth, financial crisis, and property rights: observer bias in perception-based measures

Recent years have seen an increasing number of empirical papers using subjective indicators in cross-country quantitative analyses of growth. We evaluate potential observer biases in the three most commonly employed subjective measures of property rights – taken from the Heritage Foundation, Fraser Institute, and World Economic Forum. Drawing on cross-national data for 156 countries during the years 2000 – 2010, we use Granger causality tests to assess whether exposure to recent information on economic performance introduces bias to coding of property rights scores. Further, we evaluate whether the Great Recession led observers to change property rights scores in advanced nations. We find consistent evidence that observers who provide subjective coding of property rights scores rated nations more positively when their economic performance was positive, and more negatively during the recent global financial crisis. Taken together, our findings suggest that coding of commonly employed property rights measures are subject to substantial observer bias.