What Happens to Public Health Spending in IMF-Supported Programs? Another Look


By Benedict Clements, Sanjeev Gupta, and Masahiro Nozaki

(Versions in 中文Français日本語, Русский, and Español)

Improvements in health can have a tremendously positive effect on society’s well-being and the level of economic activity. Indeed, 2013’s path-breaking report by the Lancet Commission indicates that about 11 percent of the economic growth in recent decades can be attributed to these improvements. As such, it makes good sense for macroeconomists to pay attention to health indicators and to the factors that influence them, such as public health spending.

In this context, it is not surprising that the impact of IMF-supported programs on public health spending has generated considerable attention. Previous research, focusing on periods before the global financial crisis, indicates that Fund-supported programs have a positive effect on public health spending (Martin and Segura, 2004; Center for Global Development, 2007; Clements, Gupta and Nozaki, 2013). But does this pattern still hold if we extend the analysis to more recent years? In this blog, we take a fresh look at this evidence for developing economies.

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The First Wealth


Jeff Hayden altBy Jeff Hayden

“The first wealth is health,” American philosopher Ralph Waldo Emerson wrote in 1860.­

Emerson’s quote, cited by Harvard economist and health expert David E. Bloom in Finance and Development’s lead article, reminds us that good health is the foundation on which to build—a life, a community, an economy.­

Humanity has made great strides, developing vaccines and medical techniques that allow us to live longer, healthier lives. Other developments—such as increased access to clean water and sanitation—have helped beat back long-standing ills and pave the way for better health.

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When Reality Doesn’t Bite—Misconceptions about the IMF and Social Spending


By Benedict Clements and Sanjeev Gupta

(Versions in عربي, Français)

All too often we hear the claim that the programs the IMF supports in low-income countries hurt the most vulnerable by forcing cuts in social spending. This is a misconception.

Our study concludes that, contrary to these claims, IMF-supported programs boost education and health spending in low-income countries for as long as countries are engaged with the IMF.

Let the numbers do the talking

We based our analysis on public spending on education and health in 140 countries between 1985 and 2009. The dataset is the most comprehensive ever assembled to assess this issue. The results show the beneficial effects for social spending in program countries in several respects. Continue reading

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