Structural adjustment and public spending on health: Evidence from IMF programs in low-income countries

• Published in: Social science & medicine (1982) Vol. 126; pp. 169 - 176
• Main Authors: Kentikelenis, Alexander E., Stubbs, Thomas H., King, Lawrence P.
• Format: Journal Article
• Language: English
• Published: England Elsevier Ltd 01.02.2015; Pergamon Press Inc
• Subjects: Africa; Developing Countries; Developing Countries - economics; Developing Countries - statistics & numerical data; Development Policy; Expenditures; Financial Management; Government; Government Spending; Health; Health Care Costs; Health care expenditures; Health care policy; Health Care Reform - economics; Health expenditure; Health expenditures; Health Expenditures - statistics & numerical data; Health Policy; Health Services Accessibility; Humans; IMF; International Cooperation; International Economic Organizations; Low income; Low income groups; Low-income countries; National Health Programs - economics; National Health Programs - organization & administration; National Health Programs - statistics & numerical data; Public Policy; Structural adjustment; Sub-Saharan Africa; Africa; Sub-Saharan Africa; Health expenditures; Low-income countries; Structural adjustment; IMF
• ISSN: 0277-9536; 1873-5347; 1873-5347
• DOI: 10.1016/j.socscimed.2014.12.027

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. •Relationship between IMF programs and health spending in LICs has been controversial.•In Sub-Saharan Africa, a positive relationship, but progress insufficient.•In non-Sub-Saharan African LICs, IMF programs associated with decline in health expenditures.•Claims of the IMF about strengthening spending on health in LICs premature.•Stakeholder cooperation essential to shelter health expenditures from economic fluctuations.