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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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    3. Stubbs, Thomas H. & Kentikelenis, Alexander E. & King, Lawrence P., 2016. "Catalyzing Aid? The IMF and Donor Behavior in Aid Allocation," World Development, Elsevier, vol. 78(C), pages 511-528.
    4. 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.
    5. 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.
    6. Mr. Seyed Reza Yousefi & Michela Schena & Mr. Sanjeev Gupta, 2018. "Expenditure Conditionality in IMF-supported Programs," IMF Working Papers 2018/255, International Monetary Fund.
    7. 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.
    8. Valentin Lang, 2021. "The economics of the democratic deficit: The effect of IMF programs on inequality," The Review of International Organizations, Springer, vol. 16(3), pages 599-623, July.
    9. 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.
    10. 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.
    11. 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.
    12. 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).
    13. Stubbs, Thomas & Kentikelenis, Alexander & Stuckler, David & McKee, Martin & King, Lawrence, 2017. "The impact of IMF conditionality on government health expenditure: A cross-national analysis of 16 West African nations," Social Science & Medicine, Elsevier, vol. 174(C), pages 220-227.
    14. 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.
    15. Goulas, Eleftherios & Zervoyianni, Athina, 2016. "IMF-lending programs and suicide mortality," Social Science & Medicine, Elsevier, vol. 153(C), pages 44-53.
    16. Forster, Timon & Kentikelenis, Alexander E. & Stubbs, Thomas H. & King, Lawrence P., 2020. "Globalization and health equity: The impact of structural adjustment programs on developing countries," Social Science & Medicine, Elsevier, vol. 267(C).
    17. 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.

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