When you are spending beyond your means and have to get a loan, the loan officer may impose some restrictions on your spending. While the intent of these restrictions is to encourage better financial behavior, these restrictions may have negative side effects.
Over the last twenty five years, three West African governments - those of Sierra Leone, Guinea, and Liberia - have been receiving financial assistance from the International Monetary Fund (IMF). As several authors note in a paper that was recently published in Lancet, this assistance had three major strings attached.
First, economic reform programmes by the IMF have required reductions in government spending, prioritisation of debt service, and bolstering of foreign exchange reserves. Such policies have often been extremely strict, absorbing funds that could be directed to meeting pressing health challenges.
Lancet, for those who have not heard of it, is a medical publication, and thus is sensitive to "pressing health challenges." A loan officer commonly tells the borrower to get his or her affairs on a sound financial footing before spending money on other things. The loan officer - in this case, the IMF - is worried that the borrower (in this case, the three governments) will spend money foolishly. Regardless, the governments ended up concentrating on debt service, to the exclusion of other issues.
This was complicated by the second restriction.
Second, to keep government spending low, the IMF often requires caps on the public-sector wage bill—and thus funds to hire or adequately remunerate doctors, nurses, and other health-care professionals.
There is often a feeling that "government bureaucrats make too much money" and that "a Congressman or Senator should make the minimum wage, so that he/she knows what it's like to do so." And if there are restrictions on salaries for elected officials, then there are often corresponding restrictions on salaries for non-elected officials. After all, you don't want a football coach at the state university to be making ten times as much as the state governor.
Or do you?
Personally, I'm not bent out of shape when Congresspeople make $200,000 a year, a President makes twice that, and a football coach makes twenty times that. The market has determined that these people are worth that much, if not more, in salary. It may not be "fair," but it's necessary to attract people who could otherwise command huge salaries in the private sector.
If you spend less, you'll get lower quality. Even the staunchest Tea Partier would shudder at the idea of a President who is only worth the minimum wage, and even the person who hates football would be distressed if State U hired a 16 year old to manage the football team.
And then there are doctors - the particular concern of the people writing in Lancet. It's kind of hard to argue that you should go cheap on doctors, but that is the consequence of the types of financial restrictions that the IMF was imposing. "Maybe we can get some med students." Perhaps. "Hey, Pete here can bring up anything in WebMD." Great.
Then there's the third IMF restriction.
Third, the IMF has long advocated decentralisation of health-care systems. The idea is to make care more responsive to local needs. Yet, in practice, this approach can make it difficult to mobilise coordinated, central responses to disease outbreaks.
It often happens that the people with the money dictate the specific solution to be followed. The IMF dictates that health care must be decentralized. The Gates Foundation dictates certain things about condoms. The Commies in San Francisco dictate that all city services must be provided by transgendered short people at twice the living wage. The baby seal clubbers in Podunkville dictate that the schools must teach that Moses was the first President of the United States - and that he wasn't Jewish.
It's tough enough when these decisions are made by experts in their fields - there are certainly pros and cons to decentralized healthcare, for example. But when non-experts who have stayed in Holiday Inns are making the decisions, things can get worrisome.
Why all of this emphasis on what the IMF did with these three countries? Because of a severe case of Monday morning quarterbacking.
If you haven't guessed, the reason that the researchers concentrated on the past health systems in Sierra Leone, Guinea, and Liberia is because these three countries were ground zero for the recent Ebola outbreak. While noting that the IMF was pouring hundreds of millions of dollars into these countries to contain the outbreak, the authors asked:
Yet, could it be that the IMF had contributed to the circumstances that enabled the crisis to arise in the first place? A major reason why the outbreak spread so rapidly was the weakness of health systems in the region.
While the researchers do not claim that IMF policies were solely to blame for the countries' slow response to the Ebola outbreak, these past conditions apparently didn't help the countries prepare for this.
See the abstract from Alexander Kentikelenis, Lawrence King, Martin McKee, and David Stuckler, the accompanying press release from the University of Cambridge, and this item from Homeland Security News Wire.
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