The effects of International Monetary Fund programs: a systematic review with narrative synthesis on poverty, inequality, and social indicators

TL;DR

This systematic review finds that IMF programs, especially those involving austerity and structural reforms, often lead to increased inequality and worse health outcomes, highlighting the need for policy redesign to mitigate social costs.

Contribution

It provides a comprehensive synthesis of empirical evidence on the social impacts of IMF programs, emphasizing the importance of research design quality.

Findings

IMF programs are linked to higher income inequality.

IMF programs are associated with worse health outcomes.

Stronger quasi-experimental studies support these adverse effects.

Abstract

This systematic review with narrative synthesis examines the social impacts of International Monetary Fund (IMF) programs. We systematically searched five academic databases and grey literature following PRISMA guidelines and included 53 empirical studies that met predefined eligibility criteria. For each study we assessed risk of bias, with particular attention to how endogeneity, selection bias, and confounding were handled. Because of substantial heterogeneity in outcomes and research designs, results were synthesized narratively rather than through meta analysis. We find that a minority of studies, often using methods with higher risk of bias such as propensity score matching, report no systematic adverse social effects. By contrast, a large body of work using stronger quasi experimental designs, especially instrumental variable strategies, links IMF conditionality to higher income inequality, worse health outcomes (notably tuberculosis and child mortality), and growth of the informal economy. Overall, the best available evidence indicates that IMF programs, particularly those centered on fiscal austerity and structural reforms, impose significant social costs and that a redesign of conditionality is needed to protect social spending and advance the Sustainable Development Goals.