Since the 1990s, criticism has mounted regarding the IMF's narrow construction of a 'one size fits all' economic policy. "Policies of privatization and deregulation may work better in developed countries in the West, but, maybe more difficult to implement in the developing world" (Pettinger 2009). There is also alarm that the IMF is excessively directive when extending loans to nations -- for example, mandating user fees for health care, an important issue in the current struggle for Jamaica to borrow funds from the IMF. Jamaica charges no user fees in its system of nationalized care, although the IMF argues that charging money, according to classical economic theory, enables more effective use of scarce healthcare resources. Yet "there is compelling evidence of a link between user fees and poverty. In a study that shows the 'poverty impact' of out-of-pocket payments (OOP), 78 million people in 11 low/middle income countries in Asia were pushed below the international poverty line of a $1 a day because of OOP. Bangladesh, India and China experienced percentage point increases of 3.8, 3.7 and 2.6 per cent respectively, attributed to OOP" (Graham 2009). Furthermore, this type of healthcare rationing strategy may be exemplary of a 'penny wise but pound foolish' strategy. Charging money for routine healthcare services can be prohibitively costly or act as a deterrent to going to the doctor for the very poor, and lead to public health crises such as epidemics. This will only further impoverish struggling nations.
The stripping away of one of the most basic principles of political autonomy, such as healthcare decisions, is highly controversial, even though the defenders of the IMF allege that it is essential that it ensures its funds are spent responsibly by recipient nations. And not all critics of the IMF are from the left. "The IMF has also been criticized by free market economists arguing that they [IMF bureaucrats] do too much" and enable countries to use IMF loans as a fallback strategy for reckless policies (Pettinger 2009). Yet despite the anger on the right and the left, few would deny the IMF has proved useful....
There is also considerable evidence that the IMF has had an important role in stabilizing the world economy at critical junctures in recent history, as it did during the 1970s in curtailing inflation: "when interest rates began to soar in 1979, the floating rates on developing countries' loans also shot up" (Debt and painful reforms: 1982 -- 89, 2009, IMF History). The IMF helped stabilize the bankrupt Mexican economy in 1982, and coordinated a global response to placate the nation's creditors. The IMF's role is checkered, but reform rather than elimination of the institution is the solution.
Works Cited
Bluestein, Paul. (1998, December 3). World Bank turns up criticism of IMF. The Washington
Post. Retrieved September 11, 2009 at http://www.globalpolicy.org/component/content/article/209/43528.html
Cooperation and reconstruction: 1944 -- 71. (2009). IMF History.
Retrieved September 11, 2009 at http://www.imf.org/external/about/histcoop.htm
Continued globalization: 2005-present. (2009). IMF History.
Retrieved September 11, 2009 at http://www.imf.org/external/about/histglob.htm
Debt and painful reforms: 1982 -- 89. (2009). IMF History.
Retrieved September 11, 2009 at http://www.imf.org/external/about/histglob.htm
The end of the Bretton Woods System (1972 -- 81) (2009). IMF History.
Retrieved September 11, 2009 at http://www.imf.org/external/about/histend.htm
Graham, Sandra. (2009, August 15). The IMF and no user fees. Jamaica Observer.
Retrieved September 11, 2009 at http://www.jamaicaobserver.com/columns/html/20090814T200000-0500_157495_OBS_THE_IMF_AND_THE_NO_USER_FEES_POLICY_IN_HEALTH_.asp
IMF -- Creation. (2009). Encyclopedia of the Nations. Retrieved September 11, 2009 at http://www.nationsencyclopedia.com/United-Nations-Related-Agencies/the-International-Monetary-Fund-IMF-CREATION.html
Pettinger, T. (2009). Criticism of the IMF. Economics Help. Retrieved September 11, 2009 at http://www.economicshelp.org/2008/11/criticism-of-imf.html
