From Privatization to Health System Strengthening: How Different International Monetary Fund (IMF) and World Bank Policies Impact Health in Developing Countries

Background: In the past several decades, the World Bank (WB) and the International Monetary Fund (IMF) have transitioned priorities from rebuilding European and Asian countries to decreasing poverty in developing countries. In addition, they evolved to be the world's main financial sponsor to healthcare-related projects. Policies of these organizations forced some structural adjustment policies on many developing countries that resulted in negative consequences. This piece examines the impact of the changing policies of WB and IMF on the health of vulnerable populations and suggests potential recommendations for future improvements.

Findings: Privatization of health services has become common around the world especially in the developing countries. Several reports documented negative effects of privatization on healthcare systems and vulnerable populations. Countries that received loans from the WB to privatize its social security system, for example Mexico, had drastic changes in the conditions of health. Public sector organizations faced budget reductions that led to an erosion of healthcare services, increased rates of unemployment, and lack of insurance of low-income people. The IMF's monetarist strategies towards prioritizing fiscal restraint (low budget deficits) and price stability (low inflation) negatively impacted low-income people and increased the inequity in access to health care. The present policies of these two organizations that focus on health system strengthening (HSS), and specifically incorporating existing vertical programs into health systems, had some critics. These programs, though many were successful, might result in adverse unintended effects for the health system and non-targeted populations. Some of the developing countries are unable to implement HSS projects properly.

Conclusions: Both the past and the present policies of the WB and the IMF had adverse consequences on the health systems in developing countries. These policies should be re-considered. Developing countries should implement strategies to increase quality of care and improve equity in access to healthcare. Time-limited vertical programs should be developed carefully to avoid adverse unintended effects for the health system and non-targeted populations. Strategies at both operational and strategic levels to improve relations between the vertical and horizontal basics of the system should be adopted.