On the IMF and Ebola

Did IMF policies lead to the inability of the health systems in Liberia, Guinea, and Sierra Leone to contain the ongoing Ebola outbreak?

There has been a lot of back and forth on this question in the blogosphere, the most prominent being posts over at the Monkey Cage Blog by Benton and Dionne on the one hand, and Blattman on the other.

It’s really hard to pin the total collapse of the health sectors in the Mano River Region on specific IMF policies. We don’t have counterfactual Mano River Regions that: (a) did not experience civil wars in the early 1990s, (b) did not have to implement structural adjustment policies (because of severe self-inflicted fiscal distress), and/or (c) reformed their institutions and systems of government to make them more responsive and efficient in providing social services before the outbreak in late 2013.

So the best we can do, really, is to speculate (see this informative post by Morten Jerven).

As Blattman argues, countries that required IMF help from the late 1980s did so because their central banks and treasuries had failed at managing their fiscal and monetary policies (the IMF was essentially a central bank of last resort). Which raises the possibility that perhaps we should blame these countries’ troubles on the Latin American countries that made everyone realize that the developing world’s debt in the early 1980s was unsustainable; or the world commodity crises of the 1970s.

In light of the events of the early 1980s, a plausible simple defense of the IMF is that things could have been much worse (total financial collapse) if it had not intervened. In other words, that it is not clear whether, left to their own devices, highly indebted developing countries would have had an autonomous recovery in a manner that would have laid the foundation for their healthcare systems to be strong enough to identify and contain an Ebola outbreak in their respective remote rural regions in late 2013.

That said, IMF interventions – whatever the justifications – had consequences. The discussion in the blogosphere so far has almost exclusively focused on the fiscal effects of IMF policies (specifically with regard to social spending). But as Herbst has argued in “The Structural Adjustment of Politics in Africa,” there were political consequences as well:

……… there has been almost no attention devoted to what structural adjustment, if implemented, means for the way that politics is actually carried out in African nations. The failure to examine the long-term consequences of economic reform for politics is particularly surprising given that the major instruments of structural adjustment — public sector reform, devaluation, elimination of marketing boards—threaten to change not only the constituencies that African leaders look to for support but the way in which leaders relate to their supporters in the countries south of the Sahara.

……… The paper finds that structural adjustment makes the political climate much riskier for leaders while weakening the central apparatus of the state on which rulers have long relied to stay in power.

Time horizon concerns have significant effects on whether politicians choose to invest in public goods.  The obvious question then is: Without top-down procrustean IMF intervention back then, would highly indebted governments have avoided total economic meltdown via policies that were (relatively more) incentive compatible with their unique political economies? The studies highlighted by Dionne and Benton delve into some of the political economy consequences of SAPs, and the specific ways in which they impacted social service provision.

So going back to the question of whether the IMF reduced the Mano River Region’s capacity to handle Ebola, the simple answer is that we can’t tell for sure. The case for a direct causal relationship is weak at best. But there are also lots of possible causal mechanisms that indirectly implicate the IMF. There is a reason why so many smart academics criticized the implementation of SAPs.

The lesson here is twofold:

(i) Neither the Bank nor the IMF are omnipotent puppet masters able to direct public policy in developing countries. But the same developing countries also lack the ability to perfectly sidestep the policy prescriptions from the IFIs. They have agency, but in very tight corners.

and (ii) International intervention should always, to the extent that is reasonably possible, be embedded in domestic political economies. We (the royal we in development research & practice) like talking about self-enforcing this and that, but then prefer to play “neutral” and “apolitical” interveners all the time. Because we do not live in a world of benevolent social planners, there is seldom anything like a disinterested, value-neutral, and victimless intervention.

Thoughts from Sierra Leone

“Many Westerners I met in West Africa took it as an article of faith that all of the region’s woes were the result of outside malfeasance – someone else’s fault, going back to colonialism and the slave trade. After two years in Freetown I not only cannot agree, but I think such views – promulgating as they do an abdication of responsibility – are bad for Africa. The Western world undoubtedly committed atrocities to the continent. But today it is up to Africans to carve out a brighter future for themselves.”

That is Simon Akam in a piece reviewing his time in Sierra Leone that has sort of gone viral.

It is the kind of thinking that I wish informed all of the West’s engagement with Africa. Most of Africa’s problems are African. Period.

Africa does not need Oxfam to tell the world to forget about its wars and famines and instead focus on its natural beauty or whatever else that is more positive. It is not the responsibility of Oxfam to feed Africans but that of the kleptocratic African ruling elite. The Oxfams of this world only serve to let Africa’s Mobutus off the hook.

When an African head of state appoints his son as defense minister and then cannot beat back a ragtag rebel alliance armed with AKs on jeeps we should not send troops to help him. He should be left to stew in his own soup.

For far too long the predominantly humanitarian approach in dealing with Africa has allowed the absolute triumph of absolute mediocrity in much of the continent. This must change if Africa is to consolidate the political and economic gains made over the last two decades.

The Cost of Justice

+++++++++++++++++++++UPDATE+++++++++++++++++++++

This point, from the comment section below is well taken.

“I think you have drawn the wrong conclusion from the article that you posted. Yes, broadly international justice is expensive. However, the article is referring to the wastage at the an Ad-hoc Special court for Sierra Leone. Similar claims of waste have been leveled at the Rwanda tribunal in Arusha. It should be remembered that one of the reasons for the establishment of the ICC was to reduce the wastage that came as a result of such ad-hoc courts. So in a sense, the expense of the Sierra Leone court justifies the ICC more than anything.”

++++++++++++++++++++++++++++++++++++++++++

I am on record as being pro the ICC. But this got me thinking about the absurdity of having such procedurally expensive justice systems meant to serve people who’s own justice systems are left to crumble….

“The entire budget for Sierra Leone’s domestic justice sector is roughly $13 million per year, including the Sierra Leone Police, the Prisons Department, all levels of the court system, and the various human rights and legal services commissions.  There are just 12 magistrates for the whole country outside of Freetown, and they hear between 4,000 to 5,000 criminal cases per year. The lack of judges, lawyers, and police investigators –even the lack of a few cents in cell phone credit to contact witnesses that might implicate or exonerate a defendant –is a serious obstacle to a functional justice system.

In contrast, a quick tally using the Special Court’s [that tried Charles Taylor] annual budget reports reveal costs of approximately $175 million for the prosecutions of 13 other defendants in Freetown, in addition to the hefty bill for Taylor’s trial in the Hague. And the Special Court boasted 11 judges and hundreds of staff members for its 14 cases spread over the past nine years.  Add on the testimony of Naomi Campbell, and it appears international war crimes have become a red-carpet affair.”

For more on the contrast between the under-financed and poorly staffed Sierra Leonean justice system and the special court’s extravagance check out a post by friend of the blog Alaina Varvaloucas [and her colleague] over at the CGD.

H/T Alaina.