Tuesday, July 22, 2008

IMF Loans Lead to Higher Rates of Tuberculosis

From an interesting paper "International Monetary Fund Programs and Tuberculosis Outcomes in Post-Communist Countries":

The International Monetary Fund (IMF) is a major source of capital for resource-deprived countries, but it is unclear whether its economic reform programs have positive or negative effects on health and health infrastructures in recipient countries. There are indications, for example, that recipient countries sometimes reduce their public-health spending to meet the economic targets set by the IMF as conditions for its loans.

Our results show that IMF economic reform programs are strongly associated with rises in tuberculosis mortality rates in 21 post-communist Eastern European and Former Soviet Union countries, even after correcting for potential selection bias, tuberculosis surveillance infrastructure, levels of economic development, urbanization, and HIV/AIDS. We estimated an increase in tuberculosis mortality rates when countries participate in an IMF program, which was much greater than the reduction that would have been expected had the countries not participated in an IMF program (see chart above). On the other hand, we estimated a decrease in tuberculosis mortality rates associated with exiting an IMF program. For now, these results challenge the proposition that the forms of economic development promoted by the IMF necessarily improve public health.

Consistent with these results, IMF (but not non-IMF) programs were associated with reductions in government expenditures, tuberculosis program coverage, and the number of doctors per capita in each country.

Bottom Line: Maybe the IMF's bitter pill of strict fiscal responsibility is not just what the doctor ordered, from Slate.com.


At 7/23/2008 9:35 AM, Blogger spencer said...

IMF loans are made when an economy is in trouble, typically in a recession or near recession condition.

So IMF loans are associated with bad economic conditions.

TB is associated with bad economic conditions -- that is why TB is so much worse in Eastern Europe than in Western Europe.

Didn't that teach you at GMU that correlation is not necessarily causation?

Please give me another reason why there should be any causation beyond what I said here.

At 7/23/2008 11:41 AM, Blogger juandos said...

"Didn't that teach you at GMU that correlation is not necessarily causation?"...


O.K. smart boy, show us where an economy is good and they also have a high TB rate...

I don't know but there might be a few...

A poor economy can be an indicator of not enough resources to be spent on decent medical services...

At 7/23/2008 4:25 PM, Anonymous IMF Public Affairs Office said...

From: IMF Public Affairs Office

Readers might be interested in this preliminary critique of the TB study prepared by the IMF Research Department:

An examination of the study by economists in the IMF Research Department called into question how the study was done.

"Severe methodological shortcomings limit the scope of these results and prevent any causal interpretation. The fundamental problem is that this study does not take properly into account that countries implement IMF-supported reforms in times of economic distress," the IMF's assessment said.

The study finds that IMF programs are positively associated with the TB mortality rate for a sample of 21 transition countries from 1992 to 2002. According to the Research Department note, the main concerns with this study are the following:

• The authors do not take into account that the economic and social instability following the collapse of Soviet Union may have had a direct impact on TB incidence in the 21 transition economies considered in the study. Any analysis that seeks to estimate the impact of IMF-supported programs on economic or social outcomes should take into account the economic and political conditions that first led the country to agree to an IMF-supported program. By not including these conditions, this study confuses the reasons for asking IMF assistance with the consequences of this assistance.

• The study speculates that IMF-supported programs are associated with lower public health expenditure, leading to higher TB incidence. However, this conjecture is not corroborated by data. The average increase in health spending as a share of GDP is larger for countries with Fund-supported programs than in countries without such programs (http://www.imf.org/external/np/vc/2007/062907.htm and IMF's WP/05/100).

• The study has a number of dubious results, which cast doubt on the methodology used by the authors. The study does not take into account many other factors that should have a direct impact on TB incidence, including health expenditure, poverty, initial mortality, and migration. Other results of the study, including that TB-incidence increases with income growth and decreases with urbanization, contradict previous studies that find that TB incidence increases with poverty and decreases with urbanization.

• Finally, the authors' finding that the only consistent factor impacting TB incidence is the presence of IMF-supported programs is in contrast with previous epidemiological studies on the incidence of TB.



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