The IMF and Effective Response to Pandemics: The Case of the COVID-19 Crisis

• In Event: Pandemic Preparedness, Past and Future

Abstract

How does experience under IMF programs affect a country’s response to COVID-19? Extant studies demonstrate that IMF programs have an adverse effect on recipient countries’ health conditions by reducing public health-related budgets in the short-term, while debilitating governments’ capacity through structural reforms and draining medical resources in the long-term. Building on the existing studies on the nexus between IMF programs and public health management, we argue that the long-term damages of IMF structural adjustment programs on recipient countries’ health and public sector exacerbated developing countries’ ability to effectively respond to the COVID-19 pandemic. Using the IMF Monitoring of Fund Arrangements (MONA) dataset, we examine how (1) the number of IMF structural adjustment programs a recipient country received, (2) the number of years it spent under these programs, and (3) the type of programs they were under between 2000 to 2019 influence COVID-19 mortality. The results of our empirical analysis using low and low-middle-income countries suggest that countries that were under more short-term structural IMF programs for a longer period of time are likely to suffer higher COVID-19-related mortality. On the other hand, longer-term development programs had a positive effect on COVID-19 performance. Our work contributes to the literature on the IMF’s impact on a recipient country’s health conditions by shedding light on the long-term consequences of IMF programs and their substantive effects on a nation’s capacity to handle a health crisis such as COVID-19.

Author

• Byungwon Woo, Yonsei University