The Effects of International Monetary Fund Loans on Health Outcomes

Perspective F ounded in the wake of the Great Depression of the 1930s, the International Monetary Fund (IMF) was established in 1945 when government representatives met and agreed on a " framework of international economic cooperation " (http://www.imf.org/external/ index.htm) designed to prevent future economic crises. Its mission was threefold: to ensure the stability of the exchange rate, to promote economic growth, and to provide financial assistance in the form of short-term loans to countries experiencing balance-of-payments difficulties. When countries borrow from the Fund, they are required to agree to conditions set by the organization, a process that the IMF refers to as " conditionality. " These conditions entail the adoption of economic policies or " structural adjustment programs " that are meant to redress the problems that led to the need for the loan and therefore to enable prompt repayment. While the conditions vary for different loans, most impose some regimen of fiscal austerity through reduced government spending, removing barriers to international trade, cutting government subsidies, and privatization. What kind of impact might IMF loans, and their conditionalities, have upon health outcomes? A new study in this issue of PLoS Medicine attempts to address this question by examining IMF programs and tuberculosis (TB) outcomes in post-communist countries [1]. Critics of the IMF charge that IMF conditionalities have helped undermine the health of some of the world's most vulnerable populations. They argue that health outcomes suffer from reduced government spending on health care and on other inputs to health, such as food, as well as from the capping of public sector wages. IMF policies are also cited as having led to the diversion of foreign aid intended for health to the repayment of domestic debt. Such an outcome could serve as a strong disincentive for external funders to increase future health financing [2]. Other critics point to the indirect effects of macroeconomic changes that reduce income and increase prices. Rural poverty leads to urban migration and an attendant rise in prostitution, which may fuel the transmission of HIV, and rising urban poverty increases crime and incarceration, which in turn promotes the transmission of infectious diseases [3]. Given the often vituperative debate between the IMF and its critics about the health impacts of IMF loans, the need for evidence in support of charges and counter-charges becomes ever more apparent. But what kind of evidence would shed light on these health impacts? Much …