Did IMF Austerity Worsen W African Ebola Outbreaks?

♠ Posted by Emmanuel in ,, at 2/13/2015 12:59:00 AM
Poor IMF: among the many ills supposedly attributable to its activities worldwide, chalk its historical emphasis on "structural adjustment" for weakening West African health care systems to the extent that the onset of Ebola crises in Guinea, Liberia and Sierra Leone hit them with full force. Yes, the IMF has since pledged additional emergency lending to these affected countries, but the seeds of failure to confront epidemics meaningfully were supposedly sown long ago. We begin with the current situation of IMF response:
As the spreading Ebola emergency took center stage in Washington, the World Bank and International Monetary Fund (IMF) have pledged $530 million to help Guinea, Liberia, and Sierra Leone. And in October 2014, at a special session with African leaders on Ebola during the IMF/World Bank annual meetings in Washington DC, IMF Managing Director Christine Lagarde said that in addition to the aid, the IMF would depart from its notorious budget austerity, and actually allow the hard-hit west African nations to increase their budget deficits: “We don’t normally say this!” she emphasized. To which the Guinean president, Alpha Conde, responded, “I’m extremely pleased to hear the IMF Managing Director [say]… that we can increase our deficit, which is quite a change from the usual narrative.”
This supposedly departs from typical IMF pressures that have weakened health care systems in developing countries:
if you really want to understand why several West African countries have been so ill-equipped to tackle the latest outbreak of the Ebola virus, then you also need to look at the “usual narrative” of IMF fiscal and monetary policy restraint. That’s because it is a major reason for the dilapidated public health systems that have proven to be such a vulnerability during the crisis.

Many experts note that the conspicuous unpreparedness of countries like Guinea, Liberia, and Sierra Leone is a direct consequence of years of insufficient public investment in the underlying public health infrastructure. “We know how to prevent diseases like this, if we can get the basic level of the healthcare systems up to speed,” said Columbia Business School Professor Amit Khandelwal. Critics point out that this lack of investment can be traced directly back to sparse spending on public goods dictated by IMF loan conditions and policy advice, which invariably entail adherence to its strict definition of “macroeconomic stability.”
While austerity may not be directly at fault, it may have exacerbated the situations in these countries:
So the harmful effects of IMF policies on health systems are not direct; it’s not as if the IMF comes in and directly tells a country to spend less on public health. Instead it’s a two-step process: first the IMF policy targets constrain overall national spending levels, and this then limits the spending available for long-term public investment, including for the health infrastructure. Consequently, chronic and sustained underinvestment in public health infrastructure has become the norm in many countries, year after year, over the last few decades...

None of this is to say that the IMF is solely responsible for the Ebola outbreak. Of course, the wars in Sierra Leone and Liberia, corruption, ineptitude, and a host of other specific political, cultural, and socioeconomic factors have all contributed to the current state of the public health systems in West Africa. But if the international community is serious about addressing chronic under-investment in the public health systems in these countries, it will also have to revise the obvious shortcomings of IMF fiscal and monetary policies.
I do not have problems with the general notion that IMF policies have indirectly discouraged the development of West African health care systems via austerity policies. That said, I am not entirely sure that their systems would have been significantly better able to meet the Ebola challenge had the IMF not had a fashion for austerity for so long. It's a counterfactual that's hard to support insofar as there are (fortunately) no counterexamples where IMF non-involvement led to better preparedness in health among other countries affected.