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The effects of International Monetary Fund programs: a systematic review with narrative synthesis on poverty, inequality, and social indicators

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  • SALGUERO, RICARDO ALONZO FERNANDEZ

Abstract

Background: The debate over the impact of the International Monetary Fund's (IMF) structural adjustment programs on borrowing countries has been a central topic in political economy for decades. The empirical evidence is profoundly heterogeneous and often contradictory. Objective: This systematic review with narrative synthesis synthesizes and critically analyzes the literature to assess the effects of such programs on key indicators like poverty, income inequality, social spending (health and education), health outcomes (mortality, infectious diseases), the labor market, and informality. Methods: A systematic search was conducted in five academic databases and grey literature, following PRISMA guidelines. A total of 53 studies and empirical contributions that met predefined selection criteria were included. The risk of bias for each study was assessed, paying special attention to the control of endogeneity and selection bias. Due to the methodological heterogeneity of the studies, the results were synthesized narratively. Results: A minority of studies, often employing methodologies with a higher risk of bias such as Propensity Score Matching (PSM), find no significant negative effects. In contrast, a robust body of research, using quasi-experimental designs with a low risk of bias like Instrumental Variables (IV), documents an increase in inequality, a deterioration of health outcomes (especially in tuberculosis and child mortality), and a rise in the informal economy as a consequence of IMF conditionalities. Conclusion: The differences in findings are largely attributed to the diversity of methodologies and the rigor with which they address causal inference. Higher-quality evidence suggests that IMF programs, particularly those with austerity conditionalities and structural reforms, impose significant social costs. These impacts call for a redesign of conditionality that prioritizes social protection to meet the Sustainable Development Goals.

Suggested Citation

  • Salguero, Ricardo Alonzo Fernandez, 2025. "The effects of International Monetary Fund programs: a systematic review with narrative synthesis on poverty, inequality, and social indicators," SocArXiv pbdn8_v1, Center for Open Science.
    • Handle: RePEc:osf:socarx:pbdn8_v1
    DOI: 10.31219/osf.io/pbdn8_v1
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    References listed on IDEAS

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    1. Muhammet Bas & Randall Stone, 2014. "Adverse selection and growth under IMF programs," The Review of International Organizations, Springer, vol. 9(1), pages 1-28, March.
    2. Sanjeev Gupta & Michela Schena & Seyed Reza Yousefi, 2020. "Revisiting IMF expenditure conditionality," Applied Economics, Taylor & Francis Journals, vol. 52(58), pages 6338-6359, December.
    3. Gupta, Sanjeev, 2003. "Is the PRGF living up to expectations?: an assessment of program design," Sede de la CEPAL en Santiago (Estudios e Investigaciones) 34917, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    4. Joseph P Joyce, 2004. "Adoption, Implementation and Impact of IMF Programmes: A Review of the Issues and Evidence1," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 46(3), pages 451-467, September.
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