Experts Debate Economic Policies that Work for Health and Education
The uncertainties created by the global financial crisis highlight the need to consider new approaches to economic policy. On December 10 -- International Human Rights Day -- more than 100 people attended an event organized by ActionAid USA to discuss macroeconomic policies that work for health and education. Officials from international financial institutions, congressional staff, academics and NGOs, discussed the lessons learned from recent experiences and policy options for the future.
ActionAid's Rick Rowden
ActionAid has produced country case studies and extensive research on this question, raising concerns that the IMF policies limit low-income countries’ ability to invest more in education and health and to fulfill their rights and obligations to their citizens. The IMF maintains that it has become more flexible about policy conditions, enabling borrowing countries to meet their social needs.
At the event, Prof. Robert Pollin of University of Massachusetts presented an overview of recent economic policies and the potential impacts of alternative scenarios of modest increases in health and education spending on growth and inflation rates. Amherst, Prof. Radhika Balakrishnan of Manhattan Marymount College and Prof. Diane Elson of University of Essex (UK) discussed the tension between countries’ obligations to fulfill their citizens’ human rights to health and education and the constraints of neoliberal economic policies. Andy Berg, Division Chief at the IMF’s Africa Department, on the other hand, insisted that improved economic performance and poverty reduction in sub-Saharan Africa occurred because of – not despite – sound macroeconomic policies.
Radhika Balakrishnan and Diane Elson
Civil society groups offered their own analysis. Akanksha A. Marphatia of ActionAid’s International Education Team led a discussion of recent research on IMF policy impacts on education budgets. Paul Jensen of the RESULTS Educational Fund discussed the results of RESULTS’ studies of IMF policy impacts on health budgets. Mr. Jensen commented that, “The discussion was valuable in showing that the Washington Consensus is something of a misnomer, and increasingly so, in that it’s not really a consensus at all. Viable policy alternatives do exist, with potential to more dramatically improve health, put kids in school, and build the social infrastructure needed for long-term development. The event was a huge success in building support for these alternatives among a diverse crowd.”
Akanksha Marphatia, Daniel Bradlow and Paul Jenson
“The panel was an extremely useful event,” explained Prof. Bradlow, the moderator. “It facilitated a dialogue between the IMF and some outside observers and critics about the issues of IMF conditionality, fiscal space and funding for health and education. Interestingly, the IMF seemed to agree with many of its critics that its policies may have been too restrictive, and that it could allow member states to have programs that allowed for more flexibility and more necessary social spending. Particularly given the current difficult situation, it is to be hoped that future IMF-supported programs will be more accommodating of essential spending on social services like health and education.”
Prof. Pollin added, “If a moral approach to macroeconomic policy is about anything, it surely is about improving heath and education outcomes in developing countries. We have just lived through the neoliberal era in economic policy, in which the imperatives of financial markets—for deregulation and low inflation, as against robust economic growth and job creation—have consistently taken priority over health and education needs. The International Monetary Fund has led the way in insisting that developing countries adopt neoliberal policies. But in the wake of the global financial collapse, we are now entering a new era in which public spending to meet social welfare needs should gain ascendency over casino capitalism. The efforts of Action Aid will play a crucial role in bringing this new era to life. The conference Action Aid organized this past December 10 represented a major step in behalf of this new policy agenda.”
