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What happens to social spending in IMF-supported programmes?

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  • Benedict Clements
  • Sanjeev Gupta
  • Masahiro Nozaki

Abstract

This article finds that education and health spending has risen during International Monetary Fund (IMF)-supported programmes at a faster pace than in developing countries as a whole. The analysis is based on the most comprehensive dataset assembled thus far for this purpose, with data covering 1985 to 2009 for 140 countries. Controlling for other determinants of education and health spending, including macroeconomic conditions, the results confirm that IMF-supported programmes have a positive and significant effect on social spending in low-income countries. Over a 5-year period with IMF-supported programmes, spending for education increases by about ¾ percentage point of Gross Domestic Product (GDP); and for health, by about 1 percentage point of GDP. IMF-supported programmes are also associated with increases in the share of government spending allocated to education and health.

Suggested Citation

  • Benedict Clements & Sanjeev Gupta & Masahiro Nozaki, 2013. "What happens to social spending in IMF-supported programmes?," Applied Economics, Taylor & Francis Journals, vol. 45(28), pages 4022-4033, October.
    • Handle: RePEc:taf:applec:v:45:y:2013:i:28:p:4022-4033
    DOI: 10.1080/00036846.2012.744136
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    References listed on IDEAS

    as
    1. Mr. Benedict J. Clements & Ms. Gabriela Inchauste & Ms. Nita Thacker & Mr. Thomas William Dorsey & Mr. Shamsuddin Tareq & Mr. Emanuele Baldacci & Mr. Sanjeev Gupta & Mr. Mark W. Plant, 2002. "Is the PRGF Living Up to Expectations?," IMF Occasional Papers 2002/008, International Monetary Fund.
    2. Mr. Jan Kees Martijn & Gabriel Di Bella & Mr. Shamsuddin Tareq & Mr. Benedict J. Clements & Mr. Abebe Aemro Selassie, 2006. "Designing Monetary and Fiscal Policy in Low-Income Countries," IMF Occasional Papers 2006/005, International Monetary Fund.
    3. Mrs. Ritha S. Khemani & Mr. Sanjeev Gupta & Mr. Calvin A McDonald & Mr. Louis Dicks-Mireaux & Marijn Verhoeven, 2000. "Social Issues in IMF-Supported Programs," IMF Occasional Papers 2000/002, International Monetary Fund.
    4. Gupta, Sanjeev, 2000. "Social issues in IMF: supported programs," Sede de la CEPAL en Santiago (Estudios e Investigaciones) 34725, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
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