Structural Adjustment and Health - PowerPoint Presentation

Slide1

Structural Adjustment and Health

Thomas Stubbs

ths27@cam.ac.uk

http://www.tstubbs.net

SOCP304 – 14B: Health, Wellbeing and Policy

1

st

October 2014Slide2

A Greek TragedySlide3

Introduction

International Monetary Fund (IMF or Fund)

Structural Adjustment Programs (SAPs)The IMF and Health SpendingIn Focus: IMF Programs and Health Spending in Low-Income CountriesConclusionsSlide4

International Monetary Fund

IOs, global economic governance, and the IMF

History and mandateTechnical supportLending (‘lender of last resort’)1980s and late-2000s lending boom

Influence and legacy

Fund programs (SAPs)

‘Conditionality’Slide5

Countries Under IMF Arrangements: Sub-Saharan Africa, 1985-2013Slide6

Structural Adjustment

Evolution of conditionality

Core competenciesExtension to non-coreCountry ownership and poverty reductionControversial conditions

Devaluation

Trade liberalisation

Fiscal discipline

Consumption taxes

PrivatisationSlide7

Structural Adjustment

Some general criticisms of Fund programs

Poor track record‘One size fits all’‘Mission creep’Micro-management (e.g. size of bread loaf)

‘Loose coupling’ of discourse and practice

Agents

of neoliberalism and/or

neoimperialismSlide8

IMF Programs and Health Spending

Relationship between health policy and SAPs has been subject of intense controversy

Recent studies criticizing the IMF:Stuckler, King & Basu

2008

Hoddie

&

Hartzell

2013

Reeves et al 2013

Plenty of anecdotal evidence, often polemicalSlide9

IMF Programs and Health Spending

Core

claims by critics

IMF

response (Gupta, 2010)

1. Health spending has decreased in countries with IMF-supported programs

1. Previous analyses of Fund-supported programs have already shown this claim to be untrue

2. Countries are

forced

to decrease health spending to meet rigid fiscal deficit conditions

2. IMF-supported programs have been very flexible by accommodating

larger fiscal deficits and continuing to protect priority social expenditures

3. Conditions on wage ceilings imposed in program countries prevent desirable increases in health spending

3. There is no conditionality that limits health

spending in Fund-supported programs

4. Increased aid intended for the health sector has been diverted to repay domestic debt or increase reserves

4. When faced with volatile

sources of finance, governments often attempt to maintain a stable flow of social expenditures by smoothing the use of available financing.Slide10

IMF Programs and Health Spending in Low-Income Countries

But…

Clements, Gupta & Nozaki, 2013

According to the study, IMF-supported programmes have a positive and significant effect on heath-spending in low-income countries.

We set out to replicate and extend this study (

Kentikelenis

, Stubbs, & King, forthcoming)Slide11

IMF Programs and Health Spending in Low-Income Countries: Mechanisms

Direct pathways

Conditions to protect social expendituresConditions to reshape the health sector

Resource effect

Indirect pathways

Conditions on budget deficit

Conditions on public sector wage bill

Conditions on devaluation

Differential effects in the short- and long-termSlide12

IMF Programs and Health Spending in Low-Income Countries: Research Design

Quantitative analysis

Selection bias [Heckman method]Short- and long-term effects [error correction model]

Control for confounding variables [controls, fixed-effects]

63 LICs for the period 1985-2009

Dependent variables

Public health spending as a share of GDP

Public health spending as a share of discretionary government spending

Public health spending per capita

E

xplanatory variable

Presence of an IMF program in a given yearSlide13

IMF Programs and Health Spending in Low-Income Countries: Findings

Entire sample (n=63)

No relationship between IMF programs and health spendingSplit into SSA (n=30) and non-SSA group (n=33)Basis for the regional split is the exceptional circumstances of SSA and ‘special treatment’ by IMF

Non-SSA: Negative relationship (“IMF programs decrease health spending”)

SSA: Positive relationship (“IMF programs increase health spending”)Slide14

Changes in health spending as share of GDP when on IMF programSlide15

IMF Programs and Health Spending in Low-Income Countries: Discussion

Interpreting the findings on SSA

Encouraging, but…Health spending originally very lowNear-constant presence of Fund programs

Failure to meet internationally agreed goals

Interpreting the findings on non-SSA

Coheres with standard arguments by IMF criticsSlide16

Conclusions

Public health spending is not always and necessarily beneficial, but…

Health systems need both provisions of funds and a stable funding environmentAusterity measures and ill-conceived structural reforms have tangible social costs

(e.g. A Greek Tragedy)Slide17

Recommended Reading

Vreeland

, J. (2007). The International Monetary Fund: Politics of Conditional Lending. London: Routledge.Stuckler, D. &

Basu

, S. (2014).

The Body Economic: Why Austerity Kills

. New York: Basic Books.Slide18

References

Clements, B., Gupta, S., & Nozaki, M. (2013). What happens to social spending in IMF-supported programmes?

Applied Economics, 48(28), 4022–4033

.

Gupta

, S. (2010). Response of the International Monetary Fund to its critics.

International Journal of Health Services

,

40

(2), 323–326.

doi:10.2190/HS.40.2.l

Hoddie

, M., &

Hartzell

, C. (2013). Short-term pain, long-term gain? The effects of IMF economic reform programs on public health performance.

Social Science Quarterly

.

doi:10.1111/ssqu.12068

Kentikelenis

, A.,

Karanikolos

, M., Reeves, A., McKee, M., &

Stuckler

, D. (2014). Greece’s health crisis: From austerity to

denialism

.

Lancet

,

383

(9918), 748–753

.

Kentikelenis

, A., Stubbs, T., & King, L. (Under Review). Structural adjustment and public spending on health: Evidence from IMF programs in low-income

countries.

Reeves

, A., McKee, M.,

Basu

, S., &

Stuckler

, D. (2013). The political economy of austerity and healthcare: Cross-national analysis of expenditure changes in 27 European nations 1995-2011.

Health Policy

.

doi:10.1016/j.healthpol.2013.11.008

Stuckler

, D., King, L., &

Basu

, S. (2008). International Monetary Fund programs and tuberculosis outcomes in post-communist countries.

PLoS

Medicine

,

5

(7), 1079–1090. doi:10.1371/journal.pmed.0050143