Austerity Measures in Developing Countries: Public Expenditure Trends and the Risks to Children and Women

This study examines how austerity measures may have adversely affected children and women in a sample of 128 developing countries in 2012. It relies on International Monetary Fund (IMF) fiscal projections and IMF country reports to gauge how social assistance and other public spending decisions have evolved since the start of the global economic crisis. The study finds that most developing countries boosted total expenditures during the first phase of the crisis (2008--09); but beginning in 2010, budget contraction became widespread, with ninety-one governments cutting overall spending in 2012. Moreover, the data suggest that nearly one-quarter of developing countries underwent excessive fiscal contraction, defined as cutting expenditures below pre-crisis levels. Governments considered four main options to achieve fiscal consolidation -- wage bill cuts/caps, phasing out subsidies, further targeting social safety nets, and reforming old-age pensions -- each of which would be likely to have a disproportionately negative impact on children and women.