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

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  • Kentikelenis, Alexander E.
  • Stubbs, Thomas H.
  • King, Lawrence P.

Abstract

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.

Suggested Citation

  • Kentikelenis, Alexander E. & Stubbs, Thomas H. & King, Lawrence P., 2015. "Structural adjustment and public spending on health: Evidence from IMF programs in low-income countries," Social Science & Medicine, Elsevier, vol. 126(C), pages 169-176.
    • Handle: RePEc:eee:socmed:v:126:y:2015:i:c:p:169-176
    DOI: 10.1016/j.socscimed.2014.12.027
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    5. Daoud, Adel & Herlitz, Anders & Subramanian, S.V., 2022. "IMF fairness: Calibrating the policies of the International Monetary Fund based on distributive justice," World Development, Elsevier, vol. 157(C).
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    10. Pfeiffer, James & Gimbel, Sarah & Chilundo, Baltazar & Gloyd, Stephen & Chapman, Rachel & Sherr, Kenneth, 2017. "Austerity and the “sector-wide approach” to health: The Mozambique experience," Social Science & Medicine, Elsevier, vol. 187(C), pages 208-216.
    11. Thomas Stubbs & Bernhard Reinsberg & Alexander Kentikelenis & Lawrence King, 2020. "How to evaluate the effects of IMF conditionality," The Review of International Organizations, Springer, vol. 15(1), pages 29-73, January.
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    14. Rickard, Stephanie J. & Caraway, Teri L., 2019. "International demands for austerity: examining the impact of the IMF on the public sector," LSE Research Online Documents on Economics 86636, London School of Economics and Political Science, LSE Library.
    15. Xuejie Ding & Francesco C. Billari & Stuart Gietel-Basten, 2017. "Health of midlife and older adults in China: the role of regional economic development, inequality, and institutional setting," International Journal of Public Health, Springer;Swiss School of Public Health (SSPH+), vol. 62(8), pages 857-867, November.
    16. Armenia ANDRONICEANU & Gurgen OHANYAN, 2016. "Comparative Approach on Education and Healthcare in Romania and Bulgaria as Beneficiaries of the IMF Financial Assistance," REVISTA ADMINISTRATIE SI MANAGEMENT PUBLIC, Faculty of Administration and Public Management, Academy of Economic Studies, Bucharest, Romania, vol. 2016(26), pages 25-48, June.
    17. Grigorakis, Nikolaos & Floros, Christos & Tsangari, Haritini & Tsoukatos, Evangelos, 2018. "Macroeconomic and financing determinants of out of pocket payments in health care: Evidence from selected OECD countries," Journal of Policy Modeling, Elsevier, vol. 40(6), pages 1290-1312.
    18. Mr. Sanjeev Gupta & Michela Schena & Mr. Seyed Reza Yousefi, 2018. "Expenditure Conditionality in IMF-supported Programs," IMF Working Papers 2018/255, International Monetary Fund.
    19. Kentikelenis, Alexander E., 2017. "Structural adjustment and health: A conceptual framework and evidence on pathways," Social Science & Medicine, Elsevier, vol. 187(C), pages 296-305.
    20. Jigar D. Bhatt, 2022. "Are growth diagnostics biased against the poor? Evidence from the Millennium Challenge Corporation," Development Policy Review, Overseas Development Institute, vol. 40(2), March.
    21. Gorsky, Martin & Manton, John, 2023. "The political economy of ‘strengthening health services’: The view from WHO AFRO, 1951-c.1985," Social Science & Medicine, Elsevier, vol. 319(C).
    22. MacPherson, Eleanor E. & Phiri, Mackwellings & Sadalaki, John & Nyongopa, Victoria & Desmond, Nicola & Mwapasa, Victor & Lalloo, David G. & Seeley, Janet & Theobald, Sally, 2020. "Sex, power, marginalisation and HIV amongst young fishermen in Malawi: Exploring intersecting inequalities," Social Science & Medicine, Elsevier, vol. 266(C).
    23. Gurgen OHANYAN, 2015. "Recent Changes of IMF Conditionality and Its Effects on Social Spending," REVISTA DE MANAGEMENT COMPARAT INTERNATIONAL/REVIEW OF INTERNATIONAL COMPARATIVE MANAGEMENT, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 16(5), pages 591-602, December.
    24. Hassan Sherry & Hussein Zeaiter, 2024. "IMF Conditionality and Government Education Spending: The Case of 10 MENA Countries," Economies, MDPI, vol. 12(9), pages 1-23, August.

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