A recent study, led by University of Waikato’s Dr Thomas Stubbs, shows budget reduction targets and public sector caps, insisted on by the International Monetary Fund (IMF) as loan conditions, result in reduced health spending and medical ‘brain drain’ in developing West African nations.
The research suggests that lending conditions imposed by the IMF in West Africa squeeze “fiscal space” in nations such as Sierra Leone – preventing government investment in health systems and, in some cases, contributing to an exodus of medical talent from countries that need it most.
Dr Stubbs, a Sociology lecturer within the University’s Faculty of Arts & Social Sciences, collaborated with researchers from the Universities of Cambridge, Oxford and the London School of Hygiene & Tropical Medicine to analyse the IMF’s own primary documents and evaluate the relationship between IMF-mandated policy reforms – the conditions of loans – and government health spending in West African countries.
They found that for every additional IMF condition that is ‘binding’ – ie failure to implement means automatic loan suspension – government health expenditure per capita in the region is reduced by around 0.25%. A typical IMF programme contains 25 such reforms per year, amounting to a 6.2% reduction in health spending for the average West African country annually.
The authors of the new study, published in the journal Social Science and Medicine, say their findings show the IMF “impedes progress toward the attainment of universal health coverage”, and that – under direct IMF tutelage – West African countries underfunded their health systems.
“The IMF proclaims it strengthens health systems as part of its lending programs. Yet, inappropriate policy design in IMF programmes has impeded the development of public health systems in the region over the past two decades,” says Dr Stubbs.
A growing number of IMF loans to West Africa now include social spending targets to ensure spending on health, education and other priorities is protected. These are not binding, however, and the study found fewer than half are actually met.
“Stringent IMF-mandated austerity measures explain part of this trend. As countries engage in fiscal belt-tightening to meet the IMF’s macroeconomic targets, few funds are left for maintaining health spending at adequate levels.”
The IMF’s extended presence in West Africa – on average 13 out of 20 years per country – has caused considerable controversy among public health practitioners. “While critics stress inappropriate or dogmatic policy design that undermines health system development, the IMF has argued its reforms bolster health policy,” says Dr Stubbs.
“We show that the IMF has undermined health systems – a legacy of neglect that affects West Africa’s progress towards achieving universal health coverage, a key objective of the United Nation’s Sustainable Development Goals.”
A copy of the study can be downloaded here.
For more information, contact lead author Dr Thomas Stubbs at [email protected]