International financial institutions and human rights: implications for public health.

Serving as lender of last resort to countries experiencing unsustainable levels of public debt, international financial institutions have attracted intense controversy over the past decades, exemplified most recently by the popular discontent expressed in Eurozone countries following several rounds of austerity measures. In exchange for access to financial assistance, borrowing countries must settle on a list of often painful policy reforms that are aimed at balancing the budget. This practice has afforded international financial institutions substantial policy influence on governments throughout the world and in a wide array of policy areas of direct bearing on human rights. This article reviews the consequences of policy reforms mandated by international financial institutions on the enjoyment of human rights, focusing on the International Monetary Fund and World Bank. It finds that these reforms undermine the enjoyment of health rights, labour rights, and civil and political rights, all of which have deleterious implications for public health. The evidence suggests that for human rights commitments to be met, a fundamental reorientation of international financial institutions' activities will be necessary

How to evaluate the effects of IMF conditionality: an extension of quantitative approaches and an empirical application to public education spending

Following calls for a more disaggregated approach to studying the consequences of IMF programs, scholars have developed new datasets of IMF-mandated policy reforms, or ‘conditionality.’ Initial studies have explored how conditions have, inter alia, affected tax revenues, public sector wages, and health systems. Notwithstanding the important contributions of these studies, a methodological quandary arises as to how to quantitatively examine the effects of conditionality, as distinct from other aspects of IMF operations (e.g., credit, technical support, or aid and investment catalysis). In this article, we review and advance these methodological debates by developing an identification strategy for addressing the multiple endogenous components of IMF programs. We begin by surveying the main strategies for studying the effects of IMF programs: matching methods, instrumental variable approaches, system GMM estimation, and variants of Heckman estimators. We then adapt these methods for studying the effects of conditionality per se. Specifically, we utilize a compound instrumental variable design over a system of three equations to address sources of endogeneity related to, first, the IMF participation decision and, second, the conditions included within the program. In Monte Carlo simulations, we demonstrate that our approach is unbiased and performs better than alternatives on standard diagnostics across a range of scenarios. Finally, we apply these methods to investigate how IMF programs impact government education spending as a share of GDP on a sample of 132 developing countries for the period 1990 to 2014, finding exposure to an additional condition results in a 0.05 percentage point decline

Poverty, inequality, and the International Monetary Fund:How austerity hurts the poor and widens inequality

Among the drivers of socio-economic development, this article focuses on an important yet insufficiently understood international-level determinant: the spread of austerity policies to the developing world by the International Monetary Fund (IMF). In offering loans to developing countries in exchange for policy reforms, the IMF typically sets the fiscal parameters within which development occurs. Using an original dataset of IMF-mandated austerity targets, we examine how policy reforms prescribed in IMF programs affect inequality and poverty. Our empirical analyses span a panel of up to 79 countries for the period 2002-2018. Using instrumentation techniques, we control for the possibility that these relationships are driven by the IMF imposing harsher austerity measures precisely in countries with more problematic economies. Our findings show that stricter austerity is associated with greater income inequality for up to two years, and that this effect is driven by concentrating income to the top 10% of earners while all other deciles lose out. We also find that stricter austerity is associated with higher poverty headcounts and poverty gaps. Taken together, our findings suggest that the IMF neglects the multiple ways its own policy advice contributed to social inequity in the developing world

How Structural Adjustment Programs Impact Bureaucratic Quality in Developing Countries

The administrative ability of the state to design and implement effective policy is an essential condition for economic development. Social scientists have long devoted attention to domestic forces underpinning state capacity, but not to the impact of the world system. A key mechanism through which this operates is the activities of Western-dominated international organizations, exerting pressure on developing countries to unleash market forces. We take on this task by examining the impact of policy reforms mandated by the International Monetary Fund (IMF) on the bureaucratic quality of its borrowing countries. To develop a nuanced account of this impact, we scrutinize the IMF’s practice of ‘conditionality’—far-reaching policy reforms borrowing countries must implement as a precondition for access to loans—which may (unintentionally) incapacitate state bureaucracies. In particular, so-called ‘structural conditions’ can exert a deleterious effect on bureaucratic quality, as they increase the risk that bureaucrats fall prey to special interests and reduce the range of policy instruments available to bureaucrats to steer the economy. We test these arguments using a new dataset on IMF conditionality from 1985 to 2014. Our analysis shows that structural conditions—and, more specifically, conditions on privatization, price deregulation, and public sector employment— reduce bureaucratic quality. Deploying a new instrumentation technique, the analysis also discounts the possibility that the relationship is driven by the Fund imposing structural conditions precisely in countries with low bureaucratic quality. These findings suggest that conditionality needs to be carefully designed so that it does not undermine local institutions

The political economy of labor market deregulation during IMF interventions

This study examines the relationship between policy interventions by the International Monetary Fund (IMF) and de jure labor rights. Combining two novel data sets with unprecedented country-year coverage – leximetric data on labor laws and disaggregated data on IMF conditionality – our analysis of up to 70 developing countries from 1980 to 2014 demonstrates that IMF-mandated labor market policy measures significantly reduce both individual and collective labor rights. Once we control for the effect of labor market policy measures, however, we find that collective labor rights increase in the wake of IMF programs. We argue that this result is explained by the impact of union pressure on governments which, in such a context, are imbued with the policy space to respond to domestic interest groups. The study has broader theoretical implications as to when international organizations are effective in constraining governments’ choices

Conditionality and Sovereign Debt:An Overview of Their Human Rights Implications

Las Instituciones Financieras Internacionales (IFI) suelen condicionar la concesión de préstamos, subvenciones y alivio de la deuda a la aplicación de reformas políticas por parte del país receptor. Entre las medidas más comunes que se exigen a los gobiernos están la privatización de activos públicos, los recortes del gasto público (o “austeridad”) y las reformas estructurales (como los cambios en las reformas del mercado laboral, la liberalización del comercio y la reforma legal). Estas denominadas “condicionalidades” otorgan a las IFI una influencia política sustancial sobre los gobiernos de todo el mundo, reduciendo así el espacio político nacional y socavando las agendas nacionales de desarrollo. Estas medidas también tienen implicaciones para el disfrute de los derechos humanos. Este artículo ofrece una visión general de las políticas de las IFI, así como de su impacto en la capacidad de los gobiernos que las aplican para proporcionar los servicios públicos básicos necesarios para la realización de los derechos humanos, incluyendo la salud, el trabajo y los derechos civiles y políticos. El artículo comienza con un examen de los mandatos del FMI y del Banco Mundial. A continuación, analiza las prácticas de préstamo de ambas instituciones y revisa los debates existentes en torno a los efectos de las condicionalidades sobre los derechos humanos. Por último, el artículo ofrece sugerencias para reformar las prácticas de préstamo del FMI y del Banco Mundial, de manera que se garantice el respeto de los derechos humanos.International financial institutions (IFIs) typically condition the provision of loans, grants, and debt relief on the recipient country’s implementation of policy reforms. Common measures that governments are required to implement include privatization of public assets, public spending cuts (or ‘austerity’), and structural reforms (such as changes to labour market reforms, trade liberalisation, and legal reform). These so-called ‘conditionalities’ afford IFIs substantial policy influence on governments throughout the world, thereby reducing national policy space and undermining national development agendas. These measures also have implications for the enjoyment of human rights. This article provides an overview of IFI policies, as well as their impact on the ability of the implementing governments to provide basic public services necessary for the realisation of human rights, including health, labour, and civil and political rights. The article begins with an examination of the mandates of the IMF and World Bank. It then discusses the lending practices of the two institutions and reviews existing debates around the effects of conditionalities on human rights. Finally, the article offers suggestions for reform of IMF and World Bank lending practices in ways that ensure that they respect human rights.Facultad de Ciencias Jurídicas y Sociale

Condicionalidad y deuda soberana: un panorama general de sus implicancias en los derechos humanos

International financial institutions (IFIs) typically condition the provision of loans, grants, and debt relief on the recipient country’s implementation of policy reforms. Common measures that governments are required to implement include privatization of public assets, public spending cuts (or ‘austerity’), and structural reforms (such as changes to labour market reforms, trade liberalisation, and legal reform). These so-called ‘conditionalities’ afford IFIs substantial policy influence on governments throughout the world, thereby reducing national policy space and undermining national development agendas. These measures also have implications for the enjoyment of human rights. This article provides an overview of IFI policies, as well as their impact on the ability of the implementing governments to provide basic public services necessary for the realisation of human rights, including health, labour, and civil and political rights. The article begins with an examination of the mandates of the IMF and World Bank. It then discusses the lending practices of the two institutions and reviews existing debates around the effects of conditionalities on human rights. Finally, the article offers suggestions for reform of IMF and World Bank lending practices in ways that ensure that they respect human rights.Las Instituciones Financieras Internacionales (IFI) suelen condicionar la concesión de préstamos, subvenciones y alivio de la deuda a la aplicación de reformas políticas por parte del país receptor. Entre las medidas más comunes que se exigen a los gobiernos están la privatización de activos públicos, los recortes del gasto público (o “austeridad”) y las reformas estructurales (como los cambios en las reformas del mercado laboral, la liberalización del comercio y la reforma legal). Estas denominadas “condicionalidades” otorgan a las IFI una influencia política sustancial sobre los gobiernos de todo el mundo, reduciendo así el espacio político nacional y socavando las agendas nacionales de desarrollo. Estas medidas también tienen implicaciones para el disfrute de los derechos humanos. Este artículo ofrece una visión general de las políticas de las IFI, así como de su impacto en la capacidad de los gobiernos que las aplican para proporcionar los servicios públicos básicos necesarios para la realización de los derechos humanos, incluyendo la salud, el trabajo y los derechos civiles y políticos. El artículo comienza con un examen de los mandatos del FMI y del Banco Mundial. A continuación, analiza las prácticas de préstamo de ambas instituciones y revisa los debates existentes en torno a los efectos de las condicionalidades sobre los derechos humanos. Por último, el artículo ofrece sugerencias para reformar las prácticas de préstamo del FMI y del Banco Mundial, de manera que se garantice el respeto de los derechos humanos

Conditionality and Sovereign Debt. An Overview of Human Rights Implications

Las Instituciones Financieras Internacionales (IFI) suelen condicionar la concesión de préstamos, subvenciones y alivio de la deuda a la aplicación de reformas políticas por parte del país receptor. Entre las medidas más comunes que se exigen a los gobiernos están la privatización de activos públicos, los recortes del gasto público (o “austeridad”) y las reformas estructurales (como los cambios en las reformas del mercado laboral, la liberalización del comercio y la reforma legal). Estas denominadas “condicionalidades” otorgan a las IFI una influencia política sustancial sobre los gobiernos de todo el mundo, reduciendo así el espacio político nacional y socavando las agendas nacionales de desarrollo. Estas medidas también tienen implicaciones para el disfrute de los derechos humanos. Este artículo ofrece una visión general de las políticas de las IFI, así como de su impacto en la capacidad de los gobiernos que las aplican para proporcionar los servicios públicos básicos necesarios para la realización de los derechos humanos, incluyendo la salud, el trabajo y los derechos civiles y políticos. El artículo comienza con un examen de los mandatos del FMI y del Banco Mundial. A continuación, analiza las prácticas de préstamo de ambas instituciones y revisa los debates existentes en torno a los efectos de las condicionalidades sobre los derechos humanos. Por último, el artículo ofrece sugerencias para reformar las prácticas de préstamo del FMI y del Banco Mundial, de manera que se garantice el respeto de los derechos humanos.International financial institutions (IFIs) typically condition the provision of loans, grants, and debt relief on the recipient country’s implementation of policy reforms. Common measures that governments are required to implement include privatization of public assets, public spending cuts (or ‘austerity’), and structural reforms (such as changes to labour market reforms, trade liberalisation, and legal reform). These so-called ‘conditionalities’ afford IFIs substantial policy influence on governments throughout the world, thereby reducing national policy space and undermining national development agendas. These measures also have implications for the enjoyment of human rights. This article provides an overview of IFI policies, as well as their impact on the ability of the implementing governments to provide basic public services necessary for the realisation of human rights, including health, labour, and civil and political rights. The article begins with an examination of the mandates of the IMF and World Bank. It then discusses the lending practices of the two institutions and reviews existing debates around the effects of conditionalities on human rights. Finally, the article offers suggestions for reform of IMF and World Bank lending practices in ways that ensure that they respect human rights.Facultad de Ciencias Jurídicas y Sociale