- Banking on Health:The World Bank and Health Sector Reform in Latin America
Within the social sciences, much of the common sense surrounding the behavior of international financial institutions (IFIs), such as the International Monetary Fund (IMF) and the World Bank (WB), follows a rather conventional line of thinking. It runs something like this: many governments across the world required international funding amid debt crises in the mid-to-late twentieth century. As a result, they requested help from the IMF and WB. In order to ensure that past and now future debts were repaid, these groups demanded cuts to public services, such as education, health, and state employment, in order to free up state funds for debt servicing. In the end, these cuts generated increased inequality and generally benefited only wealthy citizens and transnational corporations.
There is, of course, much truth to this story. The IMF and WB did condition their loans based on austerity measures. States that received their assistance often did cut state employment and attempt to downsize state bureaucracies. Many countries did witness escalating rates of inequality throughout the mid-to-late twentieth century.
When it comes to health care, however, this story fails to capture the empirical realities in many parts of Latin America. While some states did severely cut state funding for health and privatize their health systems, such as Chile under General Augusto Pinochet, other governments worked with these IFIs to pursue a much different health care path.
In her excellent new book, Shiri Noy examines the role of the World Bank throughout Latin America during the most recent decades. At the general level, Noy first uses statistical techniques to demonstrate that WB efforts did not generate reductions in public health expenditures throughout Latin America. Her most important contribution, however, is to demonstrate how WB pursuits throughout many countries in Latin America have been contingent upon domestic institutions and domestic dynamics. Although the WB has, in fact, urged Latin American governments to utilize neoliberal measures, the WB has also generally pursued a goal of universal health care and has not uniformly promoted the [End Page 1] wholesale privatization of the health care industry, as one might infer from the social scientific common sense surrounding IFIs.
In addition to her statistical analysis, Noy provides three case studies in order to more carefully analyze WB efforts in Latin America—looking at Argentina, Peru, and Costa Rica. She illustrates how differences in respective countries' health care models have shaped WB efforts in these locations. In Costa Rica, for instance, she points out that the government had already provided near universal coverage to its citizens. Nonetheless, the WB wanted to assist the Costa Rican government in pursuing more efficient reforms. To do so, the WB didn't contravene goals of universal coverage for a privatized system, but rather the WB recommended neoliberal measures to enhance the existing system, such as the use of primary care and the separation of functions within the health care industry.
By contrast, the Peruvian state maintained a relatively weak health care system in comparison with Costa Rica, characterized by lack of state capacity and state autonomy. As a result, the WB focused its efforts on, for example, targeting the health of children and their mothers. And in Argentina, while the WB focused on, for example, the introduction of increased market mechanisms into the health care industry, it didn't encourage the complete privatization of Argentine care. In all three cases, then, the WB championed neoliberal means, but also worked toward coverage for all citizens, that is, through neoliberal measures.
Throughout her new book, Noy neatly demonstrates the power of mixed-methods approaches within global comparative research. She not only uses intensive statistical modeling, but also weaves together interviews throughout Latin America with a multiplicity of actors involved in negotiations between the WB and respective Latin American governments.
That is impressive.
What is more, she challenges convention social scientific thinking on IFI activities and encourages us to rethink as well as hone our understanding of how IFIs work with governments across the world to pursue particular aims.
While Noy remains focused...