International financial institutions' impact on public health in developing countries

¶ … International Financial Institutions on Public Health in Developing Countries

The objective of this work is to investigate the impact of international financial institutions on public health in developing countries. The work of Kanbur entitled: "International Financial Institutions and International Public Goods: Operational Implications for the World Bank" states that when the International Financial Institutions (IFIs) are spoken of by individuals what they mean is "the two Bretton Woods Institutions, the International Monetary Fund and the World Bank." (2002) Kunbar states that IFIs are "any multilateral organization with financial operations..." (2002) Examples of these are "the regional multilateral banks, regional monetary authorities, some agencies of the United Nations Organization that disburse funding, etc..." (Kunbar, 2002) Also included are others.

FINANCIAL GLOBALIZATION & EFFECTS ON DEVELOPING COUNTRIES

The work of Prasad, Rogoff, Wei and Kose (2003) entitled: "Effects of Financial Globalization on Developing Countries: Some Empirical Evidence" asks the question of whether financial and trade integration have different effects on economic development?" And states, "life expectancy and infant mortality are important dimensions of a society's well-being." Studies on economic growth therefore must "make use of variations of the similar data sources." (Prasad, Rogoff, Wei and Kose, 2003) Data on 79 developing countries is examined in the work of Prasad, Rogoff, Wei and Kose who state that the results as shown in the following figure "suggest that the effects of trade and financial openness are different. There is no positive and robust association across developing countries between faster increase in financial integration and faster improvement in a society's health." (2003) However, by comparison there are stated to be "several pieces of evidence suggesting that higher trade integration is associated with a faster increase in life expectancy and a faster reduction in infant mortality." (Prasad, Rogoff, Wei and Kose, 2003) The figure with these statistics is shown below which has been adapted from the work of Prasad, Rogoff, Wei and Kose (2003).

Source: Prasad, Rogoff, Wei and Kose (2003)

It is stated by Prasad, Rogoff, Wei and Kose (2003) that the "contrast between financial and trade openness may have important lessons for policies. While there appears to be relatively few prerequisites for deriving benefits from trade openness, obtaining benefits from financial integration requires several conditions to be in place." (Wei and Wu, 2002b) Additionally stated is the fact as noted in the September 2002 World Economic Report is the fact that it is "useful to note that there may be a complementary relationship between trade and financial openness (in Prasad, Rogoff, Wei, and Rose) The following figure reveals the specifics of the benefits connected to financial openness and gains in a country's GDP including welfare gains in developing countries as stated in the work of Kose and Prasad from which the following table has been adapted.

Summary Statistics (1960-2000)

Source: (Kose and Prasad; in Prasad, Rogoff, Wei and Kose, 2003)

The Georgetown University work entitled: "Addressing New Global Gaps: Re-Inventing the International Financial Institutions" states that the 20th century, "...was notable for scientific breakthroughs in the social science. Economic theory evolved to a much better understanding of the relationships between monetary, trade and fiscal policies and the real economy. The laws of comparative advantage in the alignment of global competitiveness gave way to a more nuanced understanding of some real advantages by allowing prices to fluctuate and the means of production -capital and labor to move with global supply and demand." (2008)

II. BARRIERS TO DISSEMINATION

There are barriers, which exist to factual dissemination of the real impacts of financial globalization and IFIs on healthcare in developing countries. One of these barriers is that lack of harmonization in statistics on a global basis. Official statistics are those "collected according to good practice, using appropriate methods for data collection, processing and dissemination are crucial as a tool for development." (Partnership in Statistics for Development in the 21st Century, 2008) It is related that there is a duty of governments in compiling and publishing official statistics.

CONCLUSION

This very brief yet intense study has concluded that presently there is a lack of empirical research to document the precise effects of the IFIs on healthcare development in poorer developing countries and that this is due to a lack of sound statistics as well as a lack of transparency in developing countries relating to their financial provision in those respective countries for the development of healthcare both of which lead to the inability to fully disseminate the impacts of the IFIs to health care development in these countries.

RECOMMENDATIONS

Because of the breakdown in sound and harmonized statistics between developed and developing countries and due to the lack of transparency in some developing countries there is a urgent need for these factors to be corrected in the processes of these country's reporting and accounting procedures so that factually correct dissemination can be conducted on the effects of IFIs on health care development in poorer developing countries of the world.