̽��ֱ�� of Cambridge - Thomas Stubbs

Opinion: How years of IMF prescriptions have hurt West African health systems

ljm67 — Wed, 22 Feb 2017 15:52:08 +0000

̽��ֱ��International Monetary Fund (IMF) provides financial assistance to countries in economic trouble. But its policy proposals don’t always yield positive results for the countries it purports to help. For instance, critics have argued that the IMF inhibits government spending on public health and diverts resources from the health sector to repay external debt.

We set out to examine how IMF policy reforms affect government health systems in West Africa.

IMF policies have real consequences for real people. Our research showed that in West Africa the IMF has exerted a unique influence on the evolution of health systems in a number of countries. Among them are Benin, Burkina Faso, Cote d'Ivoire, Gambia, Ghana, Guinea-Bissau, Liberia, Mali, Niger, Nigeria, Senegal, Sierra Leone and Togo. These 13 countries have a combined population of more than 330 million.

It has done so through its trademark practice of “conditionality”. In exchange for loans, the IMF requires governments to adopt policies that prioritise short-term economic objectives over, for example, long-term investment in health systems.

West African health systems were weak thanks to legacies of conflict and weak state capacity even before the IMF got involved. Sadly, the policy reforms demanded by the IMF over the past two decades in exchange for loans have undermined the ability of national governments to repair their historical problems. In the process, hundreds of millions of lives have been affected.

Specifically, the IMF’s fiscal targets prompt reductions in health investment. Wage and personnel caps, for example, limit the ability of clinics and hospitals to employ more doctors and nurses. ̽��ֱ��IMF also encourages decentralisation of health services to make them responsive to local needs, which in practice can hamper the delivery of adequate health care.

Our research contributes to decades-old debates about the harmful effects of the IMF’s lending programmes on the development of public health systems. It shows that these concerns still hold today. ̽��ֱ��research also suggests that the IMF’s self-proclaimed prioritisation of health in recent years has been largely cosmetic.

West African health systems and the IMF

We searched archival material to conduct our research. This included IMF staff reports, government policy memoranda and correspondence between the IMF and national governments.

Strengthening public health care systems is central to achieving universal health coverage. This is a key objective of the United Nation’s Sustainable Development Goals.

West African countries have consistently lagged behind most other regions in the world when it comes to health system capacity. ̽��ֱ��region is home to nine of the lowest 20 ranked countries on the UN’s Human Development Index.

Infant mortality rates are also among the highest worldwide, with a regional average of 57.8 deaths per 1,000 live births in 2015. Public health spending also remains woefully inadequate at 2.4% of GDP for 2014 for the region.

Many attempts have been made to explain West Africa’s inadequate health systems. These include domestic factors, like legacies of conflict and weak state capacity. ̽��ֱ��failings of key intergovernmental organisations like the World Health Organisation (WHO) have also been blamed.

There’s no doubt that West African health systems were broken before IMF conditionality. But in the last 20 years, it is the IMF that has set the fiscal and institutional parameters within which health policies can develop. These did not repair the problems that already existed. They may even have exacerbated some.

̽��ֱ��IMF’s presence in West Africa has been a source of controversy among public health practitioners since the Ebola crisis of 2014. ̽��ֱ��IMF was found to have contributed to the failure of health systems to develop, exacerbating the Ebola crisis.

Its critics complain that the IMF is responsible for designing inappropriate or dogmatic policies that undermine the development of health systems. But the organisation has argued that its reforms actually bolster health policy.

Our research suggests that this is not the case. ̽��ֱ��IMF’s policy reforms are actually hampering the development of West Africa’s health systems.

Linking IMF conditions to health systems

First, macroeconomic targets set by the IMF reduced fiscal space for health investment. ̽��ֱ��IMF has promoted social protection policies as part of its lending programmes. But these have been inadequately incorporated into programme design.

For example in 2005, when Malian government expenditure on health reached 3.0% of GDP, IMF staff encouraged authorities to reduce spending. They were concerned that “financing substantial increases of education and health sector wages … might eventually prove unsustainable”. In Benin, authorities cut spending on health in 2005 to “ensure achievement of the main fiscal objectives” of the IMF.

Second, conditions stipulating wage and personnel caps limited staff expansion of doctors and nurses. An example is a series of IMF conditions aimed at reducing Ghana’s public sector wage bill in 2005. ̽��ֱ��Ghanaian Minister of Finance wrote to the IMF that “at the current level of remuneration, the civil service is losing highly productive employees, particularly in the health sector”. Wage ceilings remained until late 2006, and the number of physicians in Ghana halved.

Third, administrative reforms prevented adequate delivery of health care. For example, following IMF advice, Guinean authorities devolved budgetary responsibilities from the central government to the prefectural, or regional, level in the early 2000s. Five years later, an IMF mission to the country reported “governance problems” that included “insufficient and ineffective decentralisation”, while also noting deterioration in the quality of health service delivery.

Neo-colonialism and policy space for health

How can the role of the IMF in influencing health policy in West Africa be explained? ̽��ֱ��organisation has long been regarded as a tool of the Western economic powers, primarily the US and Europe. ̽��ֱ��former imperial powers continue to use the IMF to promote a neoliberal agenda across the world.

As part of this neocolonial mission, the IMF has re-engineered the economic and political dimensions of sub-Saharan African countries via intrusive conditions. West Africa stands out as the region that had to implement a large share of such reforms over the past 20 years.

A country that receives an IMF loan typically experiences economic troubles. But even under constraining economic conditions, policy options remain. ̽��ֱ��question is who gets to define these policy options: the countries themselves, following domestic political processes, or the IMF?

̽��ֱ��IMF has deprived West African nations of the policy space to adapt to local exigencies, undermining the delivery of effective health systems. Yet, domestic governments are equipped with local knowledge and are better informed on how crises are unfolding on the ground.

̽��ֱ��IMF is headquartered in Washington DC. It is largely staffed with Anglo-Saxon economists who are tasked with leading responses to unfamiliar environments in faraway places. It is unsurprising that the organisation’s responses are so out of touch.

Thomas Stubbs, Research associate, ̽��ֱ�� of Cambridge and Alexander E. Kentikelenis, Research fellow in politics and sociology, ̽��ֱ�� of Oxford

This article was originally published on ̽��ֱ��Conversation. Read the original article.

International Monetary Fund policies can have a real impact on people – and don’t always yield positive results. Writing for ̽��ֱ��Conversation, Thomas Stubbs ( ̽��ֱ�� of Cambridge) and Alexander E. Kentikelenis, ( ̽��ֱ�� of Oxford) explore the impact its policies have made on health in West Africa.

̽��ֱ��text in this work is licensed under a Creative Commons Attribution 4.0 International License. For image use please see separate credits above.

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IMF lending conditions curb healthcare investment in West Africa, study finds

fpjl2 — Wed, 11 Jan 2017 09:47:23 +0000

A new study suggests that lending conditions imposed by the International Monetary Fund 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.

Researchers from the Universities of Cambridge, Oxford and the London School of Hygiene & Tropical Medicine analysed the IMF’s own primary documents to evaluate the relationship between IMF-mandated policy reforms – the conditions of loans – and government health spending in West African countries.

̽��ֱ��team collected archival material, including IMF staff reports and government policy memoranda, to identify policy reforms in loan agreements between 1995 and 2014, extracting 8,344 reforms across 16 countries.

They found that for every additional IMF condition that is ‘binding’ – i.e. 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.

̽��ֱ��researchers say that this is often the result of a policy focus on budget deficit reduction over healthcare, or the funnelling of finance back into international reserves – all macroeconomic targets set by IMF conditions.

̽��ֱ��authors of the new study, published in the journal Social Science and Medicine, say their findings show that the IMF “impedes progress toward the attainment of universal health coverage”, and that – under direct IMF tutelage – West African countries underfunded their health systems.

“ ̽��ֱ��IMF proclaims it strengthens health systems as part of its lending programs,” said lead author Thomas Stubbs, from Cambridge’s Department of Sociology, who conducted the study with Prof Lawrence King. “Yet, inappropriate policy design in IMF programmes has impeded the development of public health systems in the region over the past two decades.”

A growing number of IMF loans to West Africa now include social spending targets to ensure that spending on health, education and other priorities are protected. These are not binding, however, and the study found that fewer than half are actually met.

“Stringent IMF-mandated austerity measures explain part of this trend,” said Stubbs. “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.”

̽��ֱ��study also shows that the 16 West African countries experienced a combined total of 211 years with IMF conditions between 1995 and 2014. Some 45% of these included conditions stipulating layoffs or caps on public-sector recruitment and limits to the wage bill.

̽��ֱ��researchers uncovered correspondence from national governments to the IMF arguing that imposed conditions are hindering recruitment of healthcare staff, something they found was often borne out by World Health Organisation (WHO) data. For example:

In 2004, Cabo Verde told the IMF that meeting their fiscal targets would interrupt recruitment of new doctors. ̽��ֱ��country later reported to the WHO a 48% reduction in physician numbers between 2004 and 2006.
In 2005, a series of IMF conditions aimed to reduce Ghana’s public sector wage bill. ̽��ֱ��Ghanaian Minister of Finance wrote to the IMF that “at the current level of remuneration, the civil service is losing highly productive employees, particularly in the health sector”. Wage ceilings remained until late-2006, and the number of physicians in Ghana halved.

“IMF-supported reforms have stopped many African countries hiring, retaining or paying healthcare staff properly,” said co-author Alexander Kentikelenis, based at the ̽��ֱ�� of Oxford.

“Macroeconomic targets set by the IMF – for example, on budget deficit reduction – crowd out health concerns, so governments do not adequately invest in health.”

̽��ֱ��IMF’s extended presence in West Africa – on average 13 out of 20 years per country – has caused considerable controversy among public health practitioners, say the researchers.

“While critics stress inappropriate or dogmatic policy design that undermines health system development, the IMF has argued its reforms bolster health policy,” said 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.”

Research shows budget reduction targets and public sector caps, insisted on by the IMF as loan conditions, result in reduced health spending and medical ‘brain drain’ in developing West African nations.

We show that the IMF has undermined health systems – a legacy of neglect that affects West Africa’s progress towards achieving universal health coverage

Thomas Stubbs

DFID

Sierra Leonean Junior Doctor, Marina Kamara, follows up on a suspected kidney infection.

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Study finds little change in the IMF’s policy advice, despite rhetoric of reform

fpjl2 — Tue, 24 May 2016 07:43:18 +0000

A new study, the largest of its kind, has systematically examined International Monetary Fund (IMF) policies over the past three decades. It found that – despite claims to have reformed their practices following the global financial crisis – the IMF has in fact ramped up the number of conditions imposed on borrower nations to pre-crisis levels.

̽��ֱ��crisis revived a flagging IMF in 2009, and the organisation has since approved some of its largest loans to countries in economic trouble. At the same time, IMF rhetoric changed dramatically. ̽��ֱ��‘structural adjustment programs’ of austerity and privatisation were seemingly replaced with talk of the perils of inequality and the importance of social protection.

Researchers from the ̽��ֱ�� of Cambridge’s Department of Sociology collected archival material on the IMF’s lending operations and identified all policy conditions in loan agreements between 1985 and 2014 – extracting 55,465 conditions across 131 countries in total.

They found that structural adjustment conditions increased by 61% between 2008 and 2014, and reached a level similar to the pre-crisis period.

̽��ֱ��authors of the study, which used newly-available data and is published today in the Review of International Political Economy, say their findings show that the IMF has surreptitiously returned to the practices it claims it has abandoned: encroaching on the policy space of elected governments by enforcing free market reforms as conditions of lending. This is despite the IMF Managing Director Christine Lagarde rejecting concerns over the return of structural adjustment: “We do not do that anymore”*.

“ ̽��ֱ��IMF has publicly acknowledged their objectives to include creating breathing space for borrowing countries, and economic stability combined with social protection,” said lead author Alexander Kentikelenis. “Yet, we show the IMF has in fact increased its push for market-oriented reforms in recent years – reforms that can be detrimental to vital public services in borrowing countries.”

Although the IMF claims its programs can “create policy space” for governments, structural adjustment conditions can reduce this space as they are often aimed at an economy’s underlying structure: privatising state-owned enterprises and deregulating labour markets, for example.

“Our research suggests that structural adjustment is not a policy fad of the past,” said co-author Thomas Stubbs. “ ̽��ֱ��emphatic return of structural conditionality in recent years calls into question the IMF’s ‘we don’t do that anymore’ rhetoric. These reforms at the IMF are basically just hot air.”

Many of these conditions continue to intrude on policy areas such as the labour market, despite claims to the contrary. Post-crisis, examples have included:

̽��ֱ��elimination of 4,000 civil service positions in Moldova in 2010.
A 15% cut in pensions and raising of the retirement age in Romania, re-introduced as a ‘binding’ condition after it was struck down by the country’s constitutional court in 2010.
Extensive labour market liberalisation in Greece, including: the precedence of firm-level over sector-wide pay agreements to reduce the power of collective bargaining; the reduction of minimum wages and employee dismissal costs.
An increased retirement age in Portugal in 2012, followed by a realignment of public sector worker rights to “private sector rules”, including job termination.

In recent years, the IMF emphasised its attention to poverty reduction and social protection, with increasing use of conditions that specify minimum expenditures on health, education and other social policies.

̽��ֱ��researchers found that inclusion of social spending conditions had indeed jumped since 2012, mostly applicable to sub-Saharan African countries. However, after detailed analysis, the authors found that nearly half such conditions were not implemented. Yet those African nations with the weakest adherence to social spending conditions still consistently met, and often far-exceeded, the IMF’s fiscal deficit targets.

“ ̽��ֱ��IMF’s well-advertised ‘pro-poor’ measures are only superficially incorporated into programme design, and are, at best, of secondary importance to stringent macroeconomic targets,” said co-author Lawrence King.

Added Kentikelenis: “We have shown that the IMF has been particularly adept at introducing layers of ceremonial pretences of reform designed to obscure the actual content of its adjustment programmes. These gaps between rhetoric and practice in the IMF’s lending activities reveal an escalating commitment to hypocrisy.”

Researchers describe IMF as having an “escalating commitment to hypocrisy”, as study reveals that strict lending conditions have returned to pre-crisis levels, while ‘pro-poor’ targets frequently go unmet.

These gaps between rhetoric and practice in the IMF’s lending activities reveal an escalating commitment to hypocrisy

Alexander Kentikelenis

Mikhail Klimentyev

Russian President Medvedev meets with Christine Lagarde, Managing Director of International Monetary Fund

Reference

* “We provide lending, and, by the way, structural adjustments? That was before my time. I have no idea what it is. We do not do that anymore. No, seriously, you have to realize that we have changed the way in which we offer our financial support.” - Christine Lagarde, International Monetary and Financial Committee (IMFC) Press Briefing, Washington, D.C, April 12, 2014

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Opinion: Why Kagame’s bid to serve a third term makes sense for Rwanda

Anonymous — Wed, 27 Jan 2016 14:21:09 +0000

Rwandan president Paul Kagame recently confirmed that he will seek a third term in 2017 after more than 98% of Rwandans voted in a referendum to lift the presidential term limit.

Kagame’s decision not to step down has prompted a barrage of criticism. Western governments, media outlets and human rights groups have painted him with the same brush as other central African “strongmen”.

Attempts to extend presidential terms by Blaise Compaore of Burkina Faso and Pierre Nkurunziza of Burundi have led to instability and violence in these nations.

Other leaders in the region — such as Denis Sassou Nguesso of Congo-Brassaville and Joseph Kabila of Congo-Kinshasa — are also considering changes to allow third-term extensions.

But Rwanda’s situation is unique. Unlike the third-term fever afflicting other countries in the region, Rwanda is not mired in corruption and economic stagnation.

During the past decade its economic growth has averaged around 7% per year, maternal and child mortality has fallen by more than 60% and near universal health insurance has been achieved. ̽��ֱ��country is also now considered one of the safest and least corrupt in sub-Saharan Africa. And in just the past three years, the percentage of people living in poverty has dropped from 44.9% in 2011 to 39.1% in 2014.

This remarkable list of achievements is attributed to the leadership of Kagame, who assumed the presidency in 2000.

Kagame’s agenda

Despite these accolades, Kagame is frequently criticised by human rights group over Rwanda’s tightly controlled political space.

He has sought to place a strong emphasis on developing a new Rwandan national identity. He has done this in an attempt to sever connections to the primordial categories of ethnic identification that provoked the tragic events of 1994. Ethnic politics and discrimination have thus been outlawed in the country.

With the genocide against the Tutsi still in recent memory, Kagame has committed to power-sharing only among parties that are firmly aligned against a revival of ethnic sectarianism. Within this political settlement, it is the pursuit of development — not negotiation — that is seen as the principal path to national reconciliation.

Understandably, this strategy is based on the fear that a more adversarial style of policy-making and debate — one that could fulfil the West’s more exacting standards of democratic participation — would give voice to extremists.

This foremost includes the Democratic Forces for the Liberation of Rwanda, the eastern Congo-based rebel group led by former genocidaires. Indeed, it was largely multilateral Western agencies that thrust multiparty democratic institutions onto Rwanda in the early 1990s. This, it could be argued, provided a platform for extremist views held in the country.

Kagame has always claimed that Rwandans would decide on what they want to become. Not the UK, US or any other nation. Many Rwandans were fearful and anxious about what might happen after 2017. For them, Kagame is seen as a stabilising force for the country and its best chance for continued socio-economic progress.

His supporters have embraced his third term to ensure he is able to finish some important projects, recognising that such a capable leader is a once-in-a-lifetime opportunity. They see Rwanda as following the lead of successful late industrialisers like Singapore, where significant socio-economic progress was achieved under the long-term leadership of Lee Kuan Yew.

Why striking a balance is important

Where a society is ethnically divided, it is difficult to ignore the need to strike a balance between the protection of the wider minority interests and the power of the central state authority.

It is clear that Rwandans require a constitution that can accommodate their fears of ethnic divisions, persecution and impunity. They also require one that would consolidate the socio-economic gains made thus far. Certainly, a path Rwanda would not want to follow is that of Kenya, where an ethnopolitical calculus plays out each election cycle and reinforces deep ethnic divisions.

For Kagame’s supporters, the controversy over a third term is a preoccupation of Western observers, not Rwandans. ̽��ֱ��terms of the debate, they argue, should instead focus on what the leader has already achieved for the country — the evidence of which is unequivocal for Kagame — and what his vision is for the future.

It takes time for any society to recover from conflict, especially a genocide. Two decades ago, Rwanda was a failed state. Kagame himself commanded the rebel force that ended the genocide. But the violence had decimated people and infrastructure.

Kagame then placed national reconciliation at the top of the political agenda, instead of ethnic exclusion. Under his stewardship, Rwandans have been given a taste of what peace, stability and development feel like - regardless of ethnicity.

For the people of Rwanda, Kagame’s record inspires trust in an otherwise uncertain future. For this reason, he may be the only person who can hold the country together. His vision to turn Rwanda into a middle-income country is on track. And it is a boat that most Rwandans do not want to rock.

Given the contextual and developmental realities faced by Rwanda, Western concerns over two, three, four, or more presidential terms appear obtuse. What matters for Rwandans is progress, stability, quality of life, good governance, and capable leadership. In short, when it comes to Rwanda, the West may not know best.

Thomas Stubbs, Research associate, ̽��ֱ�� of Cambridge

This article was originally published on ̽��ֱ��Conversation. Read the original article.

̽��ֱ��opinions expressed in this article are those of the individual author(s) and do not represent the views of the ̽��ֱ�� of Cambridge.

Thomas Stubbs (Centre for Business Research) discusses why, when it comes to Rwanda, the West may not know best.

Veni

Rwandan President Paul Kagame

̽��ֱ��text in this work is licensed under a Creative Commons Attribution 4.0 International License. For image use please see separate credits above.

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