As a major international financial institution, the International Monetary Fund (IMF) has been at the center of the emergency economic response to the COVID-19 pandemic. Although the IMF was prevented from securing the adequate resources it requested to mount a full-blown response, the Fund deserves a decent grade for the response it has managed within the confines of its current balance sheet. But as the IMF prepares to remotely convene the world’s financial authorities for its annual meetings, that progress is under threat.
In the past, the IMF infamously treated each crisis with a “one-size-fits-all” approach that conditioned new financing on fiscal austerity—measures that explicitly or implicitly directed countries to engage in contractionary fiscal policies that required major reductions to health and social expenditure.
In a study of 16 Western African countries from 1995 to 2014, social scientists at Cambridge University found that IMF programs curtailed the fiscal space for health spending in those countries by 0.24 percent. In a broader study of IMF programs in 137 developing countries between 1980 and 2014, scholars found IMF programs lowered health system access, increased neonatal mortality, and accentuated inequality.
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