The debate on whether IMF has any blame for Ebola has been frustrating, even infuriating. It is going to continue to be frustrating largely because: “Who is to blame for Ebola?” is really not a good question. In turn, we have not got good answers.
- IMF is to blame.
That’s a bad answer. And that’s the how many, including Chris Blattman summarizes the view taken by the authors of the Lancet piece. But Kentikelenis, King, McKee and Stuckler carefully stated “it could be that the IMF had contributed to the circumstances that enabled the crisis to arise in the first place”. It should be noted that it was provoked by the IMFs announcement of US$ 430 million of funding to fight Ebola. The IMF was selling itself as the solution to Ebola. But you could plausibly argue that IMF was part of the problem as well.
- History and Institutions is to blame.
That’s the view taken by Blattman in his first response. It is about state capacity, and it is wrong to assume that Africa is a blank slate. He is implicitly evoking the economic growth and political science literature that argues that the reasons why ‘good’ or ‘bad’ external policy advice makes little sense in countries like Sierra Leone, Liberia and Guinea. I am not that impressed with the research this argument relies on. Sure, according to the regression results – high ethnic fragmentation, colonial institutions, geography, slave trade, just to mention a few – is correlated with ‘bad’ institutions, ‘bad’ policy and low income per capita today.
I got two main problems with this. One is that it carries the ‘why aren’t you more like Denmark’ policy implication. Second, it is often forgotten that if you read the regression results there is only a fraction of the development outcomes today that is explained by ‘historical’ factors. I do sympathise with the view that is wrong to ignore politics and history – but I think that the literature that warns against the blank slate approach is equally wrong about ignoring the fact that recent history and current actions do actually have decisive impacts. The causality is messy, and because it is cleaner econometrically, messy current day politics is treated as an outcome. Yes, the answer is in politics and history, but IMF plays a role in that history.
- IMF is not to blame.
I could not make up a weaker response for the IMF than the one they came up with. They ran some econometric tests (with the fiscal data they themselves help country authorities to aggregate by the way) – et voilà: “we find an increase in health spending as a percent of GDP. In Guinea, spending increased by 0.7 percentage points, in Liberia by 1.6 points and in Sierra Leone by 0.24 points (from 2010 to 2013).”
0.24 percentage points? Really? So in Sierra Leone, according to World Bank statistics, total health spending as a share of GDP (note that this is not public, but total) was 15.24 percent in 2010 and it was 15.08 percent in 2012, the World Bank does report 2013 yet. In my experience with error margins in official statistics like this (remember, the denominator is GDP which can be a bit wobbly), that is not enough to assert direction of change. Look here, what happens to health spending as a share of GDP according to World Development Indicators.
The pattern is stagnation. We start at 15 percent in Sierra Leone and end up at 15 percent. We start at 6 percent in Guinea and we end up with 6 percent. That’s the end of the civil war. So to find a percentage fraction in this history and say: ‘look that’s me’, is not a good answer.
Towards a better question:
Obviously I agree with Blattman in that one needs to take into the opportunity costs when making statements about how much should be spent. I also agree that we need better research to get better answers. The ones I reviewed here are all pretty sloppy, but the original question that actually should be posed is whether the Ebola crisis have shown that over the past decades IMF focus a bit too much on fiscal discipline and too little on the importance of capacity in education and health. Most agree that too much was cut in the 1980s and 1990s, and there bits and pieces of evidence that Kentikelenis, King, McKee and Stuckler can point to show that the priority given to increasing capacity to deliver health services Sierra Leone, Liberia and Guinea is not high enough.
Final note: In all this I was reminded by the excellent book by Griffiths on Sierra Leone in 1986. Worth a read.