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Feminist Economics
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Austerity Measures in Developing Countries: Public Expenditure Trends and the Risks to Children and Women
Isabel Ortiz & Matthew Cummins
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To cite this article: Isabel Ortiz & Matthew Cummins (2013) Austerity Measures in Developing Countries: Public Expenditure Trends and the Risks to Children and Women, Feminist Economics, 19:3, 55-81, DOI: 10.1080/13545701.2013.791027 To link to this article: http://dx.doi.org/10.1080/13545701.2013.791027

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public assistance can be the difference between life and death. 55–81. social spending. public expenditures. Not only has the developing world been dealing with heightened vulnerabilities due to the earlier and cumulative effects of the food.doi.1080/13545701. and reforming old-age pensions – each of which would be likely to have a disproportionately negative impact on children and women. crisis recovery JEL Codes: H5. but beginning in 2010. meaning that © 2013 IAFFE . budget contraction became widespread. K EY W O RD S Fiscal consolidation.2013. the data suggest that nearly one-quarter of developing countries underwent excessive fiscal contraction. phasing out subsidies. 2013 Vol. No.124. O23. with ninety-one governments cutting overall spending in 2012. Governments considered four main options to achieve fiscal consolidation – wage bill cuts/caps.791027 Austerity Measures in Developing Countries: Public Expenditure Trends and the Risks to Children and Women Isabel Ortiz and Matthew Cummins ABS T R A C T Downloaded by [188. http://dx.1 and even less to how macroeconomic decisions may have affected vulnerable populations. 3. further targeting social safety nets. little attention has been paid to the experience of public finances among developing countries during the global economic crisis. and financial shocks starting in 2008. but in many places. defined as cutting expenditures below pre-crisis levels.127.org/10. 19. Moreover. However. It relies on International Monetary Fund (IMF) fiscal projections and IMF country reports to gauge how social assistance and other public spending decisions have evolved since the start of the global economic crisis. I3 I N T R O D U C T I ON Fiscal austerity has blanketed European and North American headlines since 2010. The study finds that most developing countries boosted total expenditures during the first phase of the crisis (2008–09). fuel.47] at 11:58 28 August 2013 This study examines how austerity measures may have adversely affected children and women in a sample of 128 developing countries in 2012.Feminist Economics. austerity measures.

A GGR E GAT E BU D G ET C U T S A N D S O C IA L E X P E N D IT U R E S : H I S TO RI C A L EVI D E N C E Evaluation of historical experiences suggests that social spending is typically unprotected during environments of overall expenditure contraction. in order to measure actual changes in pro-poor spending allocations. to identify the most common adjustment measures that developing countries considered in 2010–12. vulnerable populations were found to have suffered the largest cutbacks. with a focus on children and women. we examine all existing information sources that allow us to gauge how social assistance and other expenditure decisions may have evolved for a sample of 128 developing countries since 2008. sectoral. and social security) when compared to aggregate budget contractions (Giovanni Andrea Cornia. To overcome the data limitations. Even more importantly. (3) analysis of total government expenditure projections by the International Monetary Fund (IMF). (2) examination of available surveys along with health and education spending estimates from the World Bank.127. to see how social expenditures have fared in environments of general budget contraction. during the global economic crisis.A RT I C L E S Downloaded by [188. Hicks (1991) also finds that. The study concludes by discussing the potentially adverse effects of reduced social assistance and specific austerity measures on vulnerable populations. and Frances Stewart 1987). Such an analysis would ideally be carried out using real-time expenditure data based on ministerial. Richard Jolly. both within social and other spending categories. comparable.124. Our examination includes (1) a review of historical evidence from the 1980s and 1990s. such as economic services and defense. Norman L. in order to infer how aggregate spending trends may have influenced social sector allocations in 2012. However. education. and disaggregated social expenditure data were not available at the time of writing (2012) for a large sample of developing countries over the 2008–12 period. Research on the 1980s debt crisis shows that many developing countries experienced disproportionately large cuts in social spending areas (for example health. and (4) a review of policy discussions and other information contained in IMF country reports. This study aims to fill the void in current global discussions by offering a framework to understand how austerity measures may be adversely impacting vulnerable groups in developing countries. to see whether developing countries were able to boost social assistance to buffer their populations from the initial effects of the crisis during 2008–09. crossnational. during the period 1970–84 when a sample 56 . and economic classifications as well as across different levels of government. with particular attention to children and women.47] at 11:58 28 August 2013 severe budget cuts could have grave implications for millions of the world’s poorest and most deprived populations. both nationally and locally.

defense budgets. Yongzheng Yang. and Pritha Mitra (2010) show that sixteen governments budgeted higher social spending in 2009 compared to the previous year. Matthew Cummins. in contrast. than the total expenditure but still received the third highest cuts. on average. and Gabriel Vergara (2010) find that. Jingqing Chai.127. When comparing the average expenditure trends 57 . Country-level analyses further support the findings of these larger studies. Sibabrata Das.8 percent. it has caused revenue shortfalls among governments in many developing countries.47] at 11:58 28 August 2013 of twenty-four developing countries reduced expenditures. safeguarded or increased social spending and other priority areas during 2008–09. Historical evidence thus highlights the urgent need to protect propoor spending at times of aggregate fiscal contraction.8 to 6. despite falling revenues. on the whole. He further shows that spending on targeted social assistance and employment programs was more vulnerable to aggregate spending cuts than spending on more universal social services. Our analysis of the latest available health and education spending estimates from the World Bank’s (2012) “World Development Indicators” further supports the findings that governments protected and/or increased social expenditures. Isabel Ortiz. Research by Christina Paxson and Norbert Schady (2007) on Peru also indicates that public spending on health contracted sharply during the crisis in the late 1980s. on average. Martin Ravallion (2002) shows that general budget cuts in Argentina during the 1980s and 1990s typically resulted in proportionately greater reductions in social spending. were found to be the most protected. For example. nearly one-quarter of the total announced fiscal stimulus amount was directed at social protection/social support programs in a sample of sixteen developing countries.5 percent of gross domestic product (GDP) between 2008 and 2009 among developing countries in Sub-Saharan Africa. a growing body of evidence indicates that developing countries. For example. Paolo Dudine. social sectors experienced smaller cuts. 2008–09: Increased public support In terms of social spending. with real social expenditure growth accelerating from 4. While the global economic crisis that began in 2008 differs in nature and magnitude from previous crises. Available spending outturn data from the IMF (2010a) indicate that the median value of social spending increased by 0.124. Nkunke Mwase. When looking at a group of nineteen low-income countries. which partly explains the rise in infant mortality.A U S T E R I T Y M E A S U R E S I N D E V E L OP I N G C O U N T R I E S Downloaded by [188. Eteri Kvintradze. In the current context. what has been the recent experience in social spending essential to the well-being of vulnerable populations? Social expenditure trends during the global economic crisis Crisis phase I.

For example. Similarly. Lastly. The relatively small sample size of developing countries with education spending estimates through 2009 also falls short of offering a full picture of actual investment trends (thirtynine countries versus 133 with health expenditure data).2 On the whole. the World Bank compiles expenditures by health and education sectors in the “World Development Indicators. health. While such numbers do offer a picture – although imperfect – of these social spending categories for the earlier phase of the crisis.1 percent of GDP among developing countries with available data. 2010–12: Reduced public support? At the time of writing. Although the IMF publishes current and projected fiscal data in the World Economic Outlook. which included education. recent surveys suggest a bleak outlook for social expenditures during the second phase of the crisis.A RT I C L E S Downloaded by [188. in other words. protect or increase levels of support to the health and education sectors during 2008–09. Looking at available cross-national budget studies. present limitations to understanding actual social spending trends during the first phase of the crisis. we find that. on average. Crisis phase II. and agriculture rose in 2009. if social protection spending increased. these allocations may not be captured in health and education estimates due to classification and reporting differences at the national level. Available data. the value of nominal expenditure adjusted by the consumer price index). health. 58 . spending in the health and education sectors increased by approximately 0. the data do not cover all social expenditure categories. over the two periods.” but there is a time lag of at least two years before the data become available. the available evidence suggests that developing countries did. additional research hints that fiscal stimulus packages may not have benefited certain social sectors to the degree that earlier studies have suggested. Investments in these social sectors were largely facilitated by an overall expansionary fiscal stance and likely reflected a greater policy emphasis on protecting vulnerable populations from the negative shocks of the crisis. They further confirmed that while expenditures on infrastructure. Katerina Kyrili and Matthew Martin (2010) find that two-thirds of fifty-six low-income countries surveyed were cutting budget allocations in 2010 to one or more pro-poor sectors. While there is evidence of moderate upticks in resources allocated to two key social sectors in 2008–09. health and education spending grew by an average of 21 and 15 percent. agriculture.47] at 11:58 28 August 2013 during the first phase of the crisis (2008–09) with those during the precrisis phase (2005–07). such as social security. there is no such information to appraise trends during the later period. data shortcomings made it impossible to assess actual levels of social spending during 2010–12. In terms of real growth (or. respectively. on the aggregate. there are no near real-time data series on social expenditures. however.127.2 and 0. For example. and social protection.124.

and Irina Sinitsina (2011) conclude that four of six former Soviet Union countries studied were expected to decrease education expenditure in terms of GDP between 2009 and 2010. which is the only source of comparable. with social protection allocations contracting in 2010 and ending the period more than 0. cross-national fiscal data. we analyze changes in total government spending using two unique measures: (1) public expenditure as a percentage of GDP. Tayo Fakiyesi. Data and methodology Our analysis of public expenditure trends in developing countries is based on IMF projections contained in the World Economic Outlook (2011a). the data refer to the public sector. Alexander Chubrik. Several data caveats are worth mentioning. Marek Dabrowski. which includes public enterprises. for some countries.47] at 11:58 28 August 2013 they fell in 2010. Olu Ajakaiye. and the most useful for assessing a government’s fiscal position. we turn to total government expenditures in order to gauge how overall trends may be affecting social sector allocations. Ernest Aryeetey. In contrast to these findings. the scope of expenditure data varies across countries. most notably in low-income countries supported under the IMF’s new lending framework. However.124. policy discussions described in recent IMF country reports indicate a greater emphasis on safeguarding propoor or “priority” spending than in the past. with Kyrgyzstan and the Russian Federation undergoing real declines in spending. In terms of methodology. Charles Ackah. Regarding the former. et al. Massimiliano Calì.127. on average. total government spending projections may differ from the estimates used in this study as more economic and fiscal indicators become available. there are numerous problems associated with definitions of so-called “priority” expenditures. (2009) also observed important reductions in planned social spending allocations for the 2010 budgets among many of the ten developing countries in their sample. While in most instances the data refer to central and local governments.2 percent of GDP lower than in 2008. Roman Mogilevsky. expenditure data from IMF sources may vary from those reported in national budgets due to alternative projection assumptions and methods. Dirk Willem te Velde. First. Debapriya Bhattacharya. it is impossible to estimate the evolution of social spending over the 2010–12 period.3 When additionally combined with data limitations. and (2) the real value of public expenditure. absolute spending changes offer a better indication of the possible impact on the real welfare of populations.A U S T E R I T Y M E A S U R E S I N D E V E L OP I N G C O U N T R I E S Downloaded by [188. Moreover. We apply both of these measures to the 128 developing countries that have 59 . For the latter. Third. this is the most commonly used metric for cross-national comparisons of public expenditures. Second. Given the current lack of evidence on actual social expenditures in developing countries since 2010.

an estimated seventy developing-country governments (55 percent 60 Downloaded by [188.124. nearly all countries in Eastern Europe and Central Asia (twenty out of twenty-two) raised spending by more than 4 percent of GDP. a trend that appears to have gained momentum in 2012.7 percent of GDP. 2010–12: Fiscal contraction Beginning in 2010. most developing countries moved swiftly to introduce fiscal stimulus packages and boost spending.47] at 11:58 28 August 2013 . in a second phase of the crisis. 2008–09 (crisis phase I: fiscal expansion). on average. however. on average. overall increases in aggregate expenditures appear to have positively impacted the spending allocations to several social sectors. with average expansion amounting to 3. When comparing pre-crisis spending levels to this first phase. 2008–09: Fiscal expansion The vast majority of governments boosted public expenditures to buffer the impact of the different global shocks on their populations in what could be described as the expansionary phase of the global economic crisis. We present the detailed results for each of these phases. Beginning in 2010. with the average growth equaling nearly 25 percent when comparing 2008– 09 and 2005–07 average spending levels. and 2010–12 (crisis phase II: fiscal contraction). Overall. after which we examine whether some countries may have experienced excessive contraction during 2010–12.A RT I C L E S fiscal estimates across the three unique periods of the crisis: 2005–07 (precrisis). Results Analysis of fiscal projection data verifies two distinct phases of government spending patterns since the onset of the global economic crisis. Developing countries in Sub-Saharan Africa undertook the largest spending increases. As described above. Also noteworthy. most governments started to withdraw fiscal stimulus programs and scale back public spending. along with East Asia and the Pacific. on average. More than 90 percent of developing countries increased real expenditures.127. Crisis phase II. which largely characterizes 2008– 09. nearly three-fourths of our sample of developing countries (ninety-four out of 128) ramped up public expenditures. During the first phase. with twenty-six of the forty-one countries expanding by 4.4 percent of GDP. Expansions were largest in Eastern Europe and Central Asia. in both of these regions. Positive trends are also evidenced in terms of real government spending. most governments started to scale back stimulus programs and slash budgets. with real expenditure growth amounting to roughly 30 percent. Crisis phase I.

and Sub-Saharan Africa (from nineteen to twenty-seven countries).4 percent. At the time of writing. for nineteen of the forty-one countries in 2011. on average.47] at 11:58 28 August 2013 .A U S T E R I T Y M E A S U R E S I N D E V E L OP I N G C O U N T R I E S of the sample) reduced total expenditures by 2. up from thirty-eight countries in 2011. between 2009 and 2010 (see Table 1). while ninety-one (more than 70 percent of the sample) were forecasted to adopt further austerity measures during 2012 to around 1. on average. there was a downward trend from around 5. on average. was the region with the biggest anticipated expenditure contractions – 3. Overall. Sub-Saharan Africa. and 2 percent. as well as depth (4 percent of GDP. This shift was most acute in countries in the Middle East and North Africa. both in terms of breadth (more than 80 percent of countries in the region contracted). the Middle East and North Africa (from three to nine countries). For those countries that were projected to experience negative growth.5 percent during 2010–11 to 2.127.124. an average of 30 percent of all developing countries were anticipated to experience negative growth in real government expenditures during 2010–12. with the biggest changes occurring in Latin America and the Caribbean (from fourteen to twenty-two countries). as approximately one-third of countries were expected to decrease real spending by 8. Although less severe. on average. which only slightly tapers off in 2012.5 percent annually. It is also worth mentioning that the number of high-income countries that were expected to undergo fiscal contraction reached forty-one of forty-nine countries in 2012. with declining spending growth affecting just a single country in 2011 but jumping to five in 2012. Estimates also suggest that the Middle East and North Africa were increasingly tightening real expenditures. 61 Downloaded by [188. Of the fiscal changes anticipated between 2011 and 2012. on average. In 2011. Regionally. on the other hand. While spending growth was forecasted to remain positive for the sample as a whole. the most alarming is the growing number of countries that were projected to cut spending in 2012. Eastern Europe and Central Asia had the largest percentage of countries expected to reduce aggregate spending – thirteen of twenty-two countries (59 percent) in 2011 and nineteen of twenty-two countries (86 percent) in 2012. sixty-two developing countries (roughly half of the sample) were contracting government expenditures by an average of 2. on average).8 percent in 2012. over the three-year period.2 percent in 2011. a number that remains constant throughout the period.5 percent of GDP. for twenty-seven of the forty-one countries in 2012. At the time of writing. Sub-Saharan Africa appears to be the hardest hit. real declines amounted to 5.2 percent of GDP. an additional twenty-nine countries were forecasted to undergo expenditure reductions between 2011 and 2012.6 percent of GDP. fiscal contraction is also evidenced in terms of changes in real spending. For both years. on average. the outlook for 2011 and 2012 was equally troubling.

7 −8.1 −2.0 12.5 5.124.0 1.8 29.6 28.1 −2.3 −4.0 −0.0 −1.8 −0.8 −4.5 45.7 −0.8 −0.5 5.3 −4.5 −9.9 27.1 −6.9 50.2 31.7 −1.5 3.1 Eastern Europe and Central Asia (22) Latin America and Caribbean (29) A RT I C L E S 62 Middle East and North Africa (11) South Asia (8) Sub-Saharan Africa (41) All developing countries (128) Source : Authors’ calculations based on IMF (2011a).8 31.1 31.4 48.5 −3.3 −0.0 0.5 50.7 −1.1 −5.6 55.0 86.1 −1.2 −2.6 1.1 −1.4 13.6 64.1 −0.6 −5.4 −0.6 −3.4 36.5 −0. .0 81.9 9.7 −2.9 −1.6 −2.6 41.3 0.4 2012 −0.9 65.1 25.8 24.7 2011 0.5 23.6 −2.2 −5.8 −1.6 −0.5 −0.6 59.3 45.4 46.6 −1.3 −3.9 −0.0 5.7 25.9 −14.1 0.8 5.1 2011 5.5 −1.1 75.9 −1.4 29.3 2.4 3.6 2012 1.9 −5.7 47.4 −6.3 23.4 2. 2010–12 (A) Change in spending (year on year.2 −3.2 −2.1 −2.47] at 11:58 28 August 2013 Region (n=) East Asia and Pacific (17) Indicator Overall average change Average contraction Percent of countries contracting Overall average change Average contraction Percent of countries contracting Overall average change Average contraction Percent of countries contracting Overall average change Average contraction Percent of countries contracting Overall average change Average contraction Percent of countries contracting Overall average change Average contraction Percent of countries contracting Overall average change Average contraction Percent of countries contracting 2010 0.Table 1 Projected total government spending trends.5 4.0 81.8 −2.8 −4.5 58.5 8.5 63.7 5.8 −1.6 54.3 −4.3 −2. %) 2010 5.2 28.9 −5.8 27.8 −1.9 −3.5 71.2 48.6 −0.1 Downloaded by [188.127.8 37.4 5.1 9.6 26.6 −2.1 7. % GDP) (B) Growth of real spending (year on year.0 4.1 −3.5 24.3 0.1 −1.

8 0.9 percent of GDP (see Table 2). and Yemen.4 69.3 35. Djibouti. expenditure contraction at the aggregate level appears to support evidence that priority social spending has been adversely impacted since 2010. particularly that of the important cuts already undertaken in 2010.3 63.2 3. Burundi.127. Contracted Percent of Avg.3 −3. Iraq.47] at 11:58 28 August 2013 Source : Authors’ calculations based on IMF (2011a).3 57. Azerbaijan. Belarus.7 43.9 Avg. especially given the rising likelihood of a double-dip recession in many developing countries at the time of writing.7 0.0 68.0 2.8 −2.2 −0.8 −3. Botswana. In real terms. Georgia. raises concerns about premature fiscal tightening. including Angola. spending Expanded Percent of Avg.3 2.7 −3. large contractions (4–12 percent of GDP) were expected in thirteen countries.2 2.4 −2.2 2.7 36.0 −0.4 2. In particular. Furthermore.8 50.0 18.1 64.0 81. a number of governments were projected to undergo large spending cuts in terms of GDP when comparing the expansionary and contractionary phases of the crisis (see Figure 1A). When taking the average spending values of the stimulus phase (2008–09) and contrasting them against the forecast expenditures of the austerity phase (2010–12). At the country level.8 −1.5 2. 63 . Antigua and Barbuda. Antigua and Barbuda. countries spending countries spending Downloaded by [188. Georgia.6 −2. This finding. Grenada. fifty-five of 128 developing countries (or 43 percent of the sample) were expected to contract total government expenditure by an average of 2.6 31. just over 20 percent of developing countries were projected to undergo negative spending growth when comparing the unique periods. Botswana.6 0.2 50. 2010–12 average versus 2008–09 average (in percentage of GDP) Total sample Number of countries Region East Asia and Pacific Eastern Europe and Central Asia Latin America and Caribbean Middle East and North Africa South Asia Sub-Saharan Africa All developing countries 17 22 29 11 8 41 128 1. Swaziland.A U S T E R I T Y M E A S U R E S I N D E V E L OP I N G C O U N T R I E S Table 2 Changes in total government spending.4 0. In terms of real spending growth.124.0 31. Jamaica. Contrasting the phases To better appraise the breadth and depth of contractions in government spending among the cohort of developing countries. it is also useful to compare the expansionary and contractionary phases of the crisis.

A RT I C L E S Downloaded by [188. Grenada. Iran. Montenegro. Romania. and Swaziland were projected to reduce total expenditure by more than 5 percent when comparing the average spending values over the two periods (see Figure 1B). (B) Growth of real spending (as a percentage) Source : Authors’ calculations based on IMF (2011a).127. Madagascar.47] at 11:58 28 August 2013 Figure 1 Projected change in government spending. Jamaica.124. Given that this picture reflects the combined effects of reduced spending 64 . 2010–12 average versus 2008–09 average: (A) Total spending (percentage of GDP).

and prolonged as our analysis of spending data has revealed. and Terry McKinley 2010). which had the support of the G-20. Moreover. The sovereign debt crises in Europe raised concerns about public debt levels in governments worldwide. What induced these change in fiscal policy stances between the first and second phase of the crisis? In February 2010. and trade and financial liberalization (Núria Molina-Gallart 2010).A U S T E R I T Y M E A S U R E S I N D E V E L OP I N G C O U N T R I E S along with an eroding real value of expenditures due to higher local prices. Dermott and Robert F. flexible exchange rates. intense. however. in practice. seemingly abandoning neoliberal prescriptions. Georgia and Iran stand out as having dangerous levels of inflation during 2011–12. Defenders of fiscal consolidation often reference a dated IMF study of seventy-four episodes of spending contractions in twenty industrialized countries during 1970–95. One of the principal criticisms is the role of policy influence/pressure from international financial institutions. there were few changes to its standard recommendations to developing countries regarding monetary and fiscal policies (Terry McKinley 2010. the IMF raised expectations about reforming its fundamental policy approach to crisis response. according to critical voices. Elisa Van Waeyenberge. and there is a clear need for more research to better understand why governments followed the trend of contractionary policies at a time of global recession. however. for example.47] at 11:58 28 August 2013 . an effective socioeconomic recovery strategy should be based on an expansionary fiscal policy that fosters public investment and increases domestic revenues. 2010c) called for large-scale fiscal adjustment (meaning a reduction in government budget deficits) where “the recovery is securely underway” as well as for structural reforms in public finance to be initiated “even in countries where the recovery is not yet securely underway” (IMF 2010b: 3. low inflation rates. 2010c: 1). Hannah Bargawi. There are also many questions behind the logic of austerity. While influence and pressure from international financial institutions may partly explain the breadth and scope of expenditure contraction observed in developing countries since 2010. two IMF Board papers (2010b. During the first stage of the crisis. Wescott 1996). There is. it became clear that. they were the first signs of a worldwide policy reversal. While these papers focused on higher income economies. which found that sharp budget cuts can lower interest rates and encourage consumption and investment (John C. why the drive to slash budgets in developing countries was as quick. a managed exchange-rate 65 Downloaded by [188. especially among developing countries and in the context of a global crisis. In low-income countries in Sub-Saharan Africa. limited support to validate that fiscal austerity can stimulate economic activity. however. It is less clear.127. few governments have IMF programs. As the crisis evolved.124. the IMF failed to revise its rigid and orthodox approach to macroeconomic policy guidelines and based much of its policy design on low fiscal deficits.

1 2.3 −4.127.5 26. Contracted Percent of Avg.5 73.0 −3. Overall. in real terms. We define excessive fiscal austerity as reducing government expenditure below pre-crisis levels (the average spending values during 2005–07).9 13.A RT I C L E S Table 3 Changes in total government spending. and James Heintz 2008).3 87. countries spending countries spending Downloaded by [188. Although these spending trends were. Excessive contraction? There are risks associated with premature as well as excessive consolidation. indeed. positive signs on the aggregate.3 4.5 −1. Robert Pollin. 2010–12 average versus 2005–07 average (in percentage of GDP) Total sample Number of countries Region East Asia and Pacific Eastern Europe and Central Asia Latin America and Caribbean Middle East and North Africa South Asia Sub-Saharan Africa All developing countries 17 22 29 11 8 41 128 3.6 17.0 3.2 77. These findings indicate that most governments have maintained considerably higher levels of public assistance since the start of the global economic crisis.9 3.2 72. spending Expanded Percent of Avg. analysis of fiscal data reveals that twentynine developing countries can be characterized as having adopted excessive reductions in government spending. public expenditures were 43 percent above earlier levels in more than 90 percent of the sample.1 86.8 22. In terms of GDP.124.4 2. Comparing the 2010–12 and 2005–07 periods suggests that the majority of developing countries have maintained total expenditures far above pre-crisis levels.6 Avg.9 −4.7 3.6 −1.9 2.8 4. Eleven of those countries were 66 .7 12.3 94.6 4. there were many countries that appeared to experience excessive contraction.4 4. and a monetary policy that supports fiscal expansion and export promotion by achieving low real interest rates to encourage private investment and alleviate public sector debts (John Weeks and Terry McKinley 2007.7 3. Gerald Epstein.1 2.8 27.4 82.2 −3.0 5. regime that promotes export competitiveness and currency stability.4 −2. average spending levels in the contractionary phase of the crisis were about 4 percent higher in GDP terms than those in the pre-crisis phase in more than three-fourths of developing countries (see Table 3).7 −1.47] at 11:58 28 August 2013 Source : Authors’ calculations based on IMF (2011a).

more than 5 percent less during the second phase of the crisis when compared to the pre-crisis period (Antigua and Barbuda.127. The most popular austerity measures were cutting or capping the wage bill of public sector employees. Belarus. on average. we look at 124 country reports published between January 2010 and September 2011 and identify the different policy options that governments considered or implemented to achieve fiscal tightening (see Annex 2 of Isabel Ortiz. Iraq. First. M A I N A D J U S TM EN T M EA S U RES D U R IN G 2 0 1 0 – 1 2 Methodology How were developing countries achieving fiscal adjustment? To answer this question. Staff Monitored Programs). we review policy discussions and other information contained in IMF country reports. the rapid and deep reversal in public expenditures exhibited by many developing countries during 2010–12 poses serious threats to the well-being of vulnerable populations. an estimated fifty-six developing countries 67 . and Yemen). Overall. such as salaries. In terms of real spending. Jamaica. Results We find that developing countries considered four main adjustment policies to achieve planned budget cuts (see Appendix Table 1). Republic of Congo. Eritrea. the findings are solely based on the authors’ interpretations of IMF country reports. Grenada. Eritrea.124. we assess the policy choices that governments are undertaking to achieve reduced fiscal targets and then discuss the possible impact of such decisions – including lower social spending allocations and other austerity measures – on vulnerable households. Two caveats warrant mentioning. While this may be true. Iran. Stand-by Arrangements and Extended Credit Facility). and Seychelles). which cover Article IV consultations. and Matthew Cummins [2011a] for complete details). Grenada. especially those who depend on public assistance to meet basic needs.A U S T E R I T Y M E A S U R E S I N D E V E L OP I N G C O U N T R I E S Downloaded by [188.47] at 11:58 28 August 2013 projected to be spending. Madagascar. As recurrent expenditures. and consultations under nonlending arrangements (for example. Some argue that limiting government spending to below pre-crisis levels may well be justified in those instances where public finances were previously viewed as unsustainable. and actual outcomes require verification. In what follows. tend to be the largest component of national budgets. Jingqing Chai. Jordan. to the extent that measures eventually adopted by governments may differ from those under consideration at the time of writing. Sudan. Second. reviews conducted under lending arrangements (for example. Fiji. Madagascar. Seychelles. eight countries were estimated to be spending less in 2010–12 than during 2005– 07 (Antigua and Barbuda. this analysis is only indicative.

This policy stance emerges. many governments appeared to be reforming old-age pensions to scale back public spending. which had already reformed their pension systems in recent years. at least one policy option was being discussed in 106 developing countries. Jordan. threaten vulnerable populations.124. Lastly. especially those whose well-being and survival depends on such support. equally across all developing regions. Kitts and Nevis. Approximately twenty-eight developing countries were discussing different changes to pension systems. Overall. Romania.A RT I C L E S Downloaded by [188. which is often carried out or planned as a part of civil service reforms. despite fiscal constraints (see Appendix Table 1). hence. Belarus. B U DGE T C U T S A N D TH E R I S K S T O V U L N E R A B L E PO PU LATI O N S General reductions in social spending As mentioned. This adjustment measure frequently appeared in policy discussions in middle-income countries. A second widespread policy option to reduce government spending is to phase out or remove subsidies. subsidies. A small number of countries were also contemplating or planning alternative options by expanding wages. fifty-six developing countries appeared to be cutting subsidies. which may have a direct impact on the overall level and quality of public assistance and. Nicaragua. social transfers or pension benefits. data shortcomings preclude our ability to measure actual social spending trends during 2010–12. This includes some developing countries that were under tight fiscal pressures. such as Mongolia. Fiji. such as raising contribution rates. and Tunisia). increasing the retirement age. especially in Eastern Europe and Latin America. Overall. Further targeting of social safety nets emerges as a third common policy channel to contain overall expenditures and achieve cost savings. This measure appeared particularly common in governments in Sub-Saharan Africa. and/or lowering taxes on basic goods. Egypt. aggregate budget cuts have been intensifying across most developing countries since 2010. 68 . with two or more options considered in sixty-nine countries and all four options in ten countries (Antigua and Barbuda. predominately on fuel. Many of the different pension options under consideration were also linked to reforms of the public health sector. but also on electricity and food items.127. more or less. as well as those that have a legacy of extensive social welfare systems. increasing eligibility periods. However. and lowering benefits. Our review indicates that thirty-four developing countries were considering rationalizing and further targeting their spending in social protection systems.47] at 11:58 28 August 2013 were looking to reduce the wage bill. St. such as the Philippines. India.

As further highlighted by the case of Tanzania. summarizes some of the likely impact of health spending cuts in some developing countries. who tend to be the primary caregivers. there are also health sector risks in terms of human resources. and Malaria. which was the first country in Sub-Saharan Africa to cut its annual HIV/AIDS budget by a staggering 25 percent. which highly impact children.127. funding shortfalls in the Global Fund to Fight HIV/AIDs. Higher fees and reduced assistance make it more difficult for women to pursue education. thus reducing their job prospects and earning potential and furthering gender inequities. Tendai Bare. a gender audit of the June 2010 budget in the UK shows that women were bearing 72 percent of the burden of national cuts (UK Women’s Budget Group 2010).and gender-sensitive budgeting in developing countries. Budget cuts to primary schools also disproportionately impact both children and their mothers. given that more than half of public health budgets in Sub-Saharan Africa depend on foreign aid. Wage bill cuts or caps Well designed and executed fiscal savings can be used for raising low wages for essential public service providers and/or for expanding essential 69 Downloaded by [188. for example. Increased violence and abuse against children and women was another serious risk identified with funding cuts to social protection services and legal aid. however.47] at 11:58 28 August 2013 .124. maternity grants. and Stewart 1987. Evidence from high-income countries further indicates that children and women were disproportionately affected by reduced social expenditures. When combined with the historical evidence of the negative impact of structural adjustment on children and women in developing countries in the 1980s. signify increasing stress on women who are the predominant caretakers of sick persons (Seguino 2010). In particular. Mary Chinery-Hesse. and Marjorie Lamont Henriques 1989. Jolly.A U S T E R I T Y M E A S U R E S I N D E V E L OP I N G C O U N T R I E S The lack of child and gender disaggregated data. and decreased child-related support – including pregnancy health services. Stephanie Seguino (2010). along with child. and child benefits – are among the principal threats resulting from social spending cuts. Bina Agarwal. Tuberculosis. and Christian Morrisson 1991). Anna Mapson (2011) highlights additional risks to British children and women. François Bourguignon. and long-term planning (Kristin Palitza 2009). For instance. service delivery. makes it difficult to carry out a comprehensive analysis of how current social spending cuts are affecting children and women. lower pensions. Fewer housing benefits. Jaime de Melo. We now look at the potential dangers associated with the main austerity measures being discussed in developing countries. these experiences from the UK suggest some of the potential dangers that could be replicated in developing countries that scaled back social spending as part of fiscal consolidation efforts (Cornia.

or employment retrenchment. wage cuts. Such measures can adversely impact the delivery of basic social services. There is also an important gender impact. Decisions on wage bills must therefore safeguard – and enhance. there are risks that wage bill cuts or caps may translate into salaries being reduced or eroded in real value. However. 2011). and social welfare and child protection workers. medical staff. and brain drain. wage and employment reforms in Gabon. when fiscal situations improve – the pay. but will expand recruitment for priority sectors. since women can suffer disproportionately from job cuts and public sector pay freezes. such as health and education. which was enacted on civil servants in 2010. Wage bill decisions must also be based on gender analysis. 70 Downloaded by [188. as the public sector is a main source of formal employment for women in many developing countries. Similarly. including health. and inequitable. will disproportionately affect women. employment. Rolando Ossowski. The data further suggest that teachers and nurses are not adequately compensated in many developing countries when comparing their pay with at least one income or cost-of-living benchmark.47] at 11:58 28 August 2013 . and justice (IMF 2011c). Isabel Ortiz. while replacing them with targeted transfers can remove market distortions and more effectively support vulnerable groups (David Coady. particularly in highpoverty areas.124.A RT I C L E S posts required to meet the Millennium Development Goals (MDGs). and Xavier R. education. Phasing out subsidies The development of more targeted social safety nets as a way to compensate the poor often accompanies the removal or reduction of subsidies. informal fees. costly. Shamsuddin Tareq. and retention of priority social sector staff to protect child and family-related services in order to support human capital development for long-term growth and the achievement of the MDGs. as highlighted by recent evidence from the UK presented earlier (Mapson 2011). freezes. or arrears in certain sectors. payments in arrears. Sire 2010). a finding echoed in several countries in the former Soviet Union (Chubrik et al. which in 2011 included freezing public sector salaries and cutting annual hiring by half. However. John Piotrowski. it is imperative to protect the number of positions and level of compensation of essential public sector employees. hiring freezes. As low pay is a key factor behind absenteeism. including teachers. United Nations Children’s Fund’s (UNICEF) analysis of salary information for primary teachers and nurses shows that their pay in real terms was diminished by increases in local prices during 2009 (Jingqing Chai. Burundi is expected to maintain a hiring freeze. This policy approach is largely driven by the logic that generalized subsidies can be ineffective.4 For instance.127. at least in the short term. Robert Gillingham. and Justin Tyson 2010). were being complemented by increasing health and education personnel (IMF 2011b). Thus.

Indeed.124. However. whose already limited incomes are further eroded by any of the resulting inflationary effects on basic goods and services. ironically. the original impetus of the subsidy policy reversal. Second. the negative ripple effects of reversing this policy should be carefully examined. Third. a functioning social protection system takes a considerable amount of time to design and implement. Some countries have removed food subsidies at a time when there is still a high level of need for public nutrition assistance. the wide fluctuations in international oil prices can make fuel and energy subsidies costly and. Moreover. a trend that likely persisted through 2011–12 given that global food prices remained at record levels (Food and Agricultural Organization of the United Nations [FAO] 2013). while subsidies are often withdrawn quickly. however. there is a strong case for extending general consumer subsidies. especially infants and young children who can experience irreversible. Until a well-functioning social safety net is in place. economists often advise governments to better target their spending when cuts are called for (Martin Ravallion 1999). further targeting can deliver more costeffective social assistance and yield fiscal savings over the medium term. providing subsidies on food items that the poor tend to consume disproportionately more) as a short-term measure to protect children and poor households from unaffordable food costs. Our review of the latest IMF country reports (see Appendix Table 1 for details) also shows that many countries were contemplating reducing fuel and energy subsidies in order to cut public expenditures. Further targeting of social safety nets To reconcile poverty reduction with fiscal austerity. since higher costs of goods and services drag down aggregate demand. and Matthew Cummins (2011b) find that domestic food prices rose steadily during the second half of 2010 in a sample of fifty-eight developing countries. cutting fuel subsidies can have a disproportionate negative impact on vulnerable groups.A U S T E R I T Y M E A S U R E S I N D E V E L OP I N G C O U N T R I E S governments must carefully assess the human development and economic impact of lowering or altogether removing food or fuel subsidies and ensure that measures that adequately safeguard the access and well-being of vulnerable populations and overall recovery prospects accompany any such policy change. In the short term. Isabel Ortiz. any slowdown in economic growth will lower tax receipts and create new budgetary pressures – which is. longterm adverse effects from nutritional shortfalls. which can be possibly modified to encourage pro-poor self-selection (for example.47] at 11:58 28 August 2013 . Indeed. therefore. First.127. an obvious target during fiscal austerity. removing fuel subsidies can hinder overall economic growth. This means that any timing mismatch immediately threatens the most vulnerable groups. there are limitations inherent to designing and 71 Downloaded by [188. Jingqing Chai.

and/or mortality due to the deprivations of a safe and enabling environment are at risk of being left out. Several studies indicate that this exclusion risk could be statistically significant (for example.124. Pradeep Srivastava [2004]). such as in Moldova (Ortiz et al. including gender dimensions.A RT I C L E S implementing new targeting schemes. 2010). Many studies document the high administrative costs of accurately identifying the poor (for example. This approach leaves many vulnerable persons. tends to focus only on the extreme poor. instead. Furthermore. health facilities. Due to a confluence of budgetary and political economy considerations. The main risk of this policy choice is straightforward: vulnerable groups are either excluded from receiving benefits or critical assistance is diminished at a time when these groups are most in need. malnutrition. especially poor children and women. which can result in the unintended effects of further excluding marginalized children and their families. having an older 72 Downloaded by [188.47] at 11:58 28 August 2013 . As a result. a strong case may be made for extending universal transfers (for example. David Coady. excluded from receiving cash benefits at a time when their need for public assistance is high. While self-selection and community-based mechanisms can lower overhead. One major constraint is that means-tested targeting is often costly and requires a high level of civil service capacity. Weak public institutions that are unable to manage the detailed administrative requirements of selective policies further complicate cost concerns (Thandika Mkandawire 2005). which indicates the need for setting targeting criteria beyond consumption or income poverty measures. Thus. Another serious danger is that targeting reforms can result in large undercoverage. For poor households. Old-age pension reform Pension reforms in developing countries mirror cost-saving pension and healthcare policies adopted in many high-income countries. to families with children or to households headed by women) or for carrying out some form of geographic targeting to provide immediate support to vulnerable groups facing unexpected and prolonged shocks until administrative capacity is developed to effectively implement more sophisticated systems. current practices of targeting by income or consumption poverty do not adequately take into account other dimensions of poverty – such as lack of ready access to schools. Sabina Alkire and Suman Seth [2008]. Harold Coulombe and Jingqing Chai [2010]). and Josh Hoddinott [2004]. the scope of the target often falls short of adequately covering vulnerable populations and. or sanitation systems. Margaret Grosh. especially where poverty is widespread. clean water. those children whose families meet the minimum consumption criteria but remain vulnerable to dropping out of school. in many cases.127. targeting schemes end up being more expensive than universal ones.

since it is a source of income to sustain the basic needs for the whole family. including children and women (Mark Gorman 2004). 2010). many governments were also altering consumption taxes on basic goods. especially health. Budget cuts pose clear risks to children and women in terms of their impact on the level and quality of essential public assistance. Moreover. nutrition. our analysis confirms that the scope of austerity had widened quickly. including pension benefits. Even more worrisome. however. subsidy reversals can make food. it is imperative that policymakers complement any systematic pension reforms with specific measures that safeguard income support and the delivery of essential services. pension cuts are likely to have a disproportionate negative impact on women and further gender disparities. by increasing or expanding 73 Downloaded by [188. While this article has exclusively focused on expenditure-side measures. Moreover. comparing the 2010–12 and 2005–07 periods suggests that nearly one-quarter of developing countries were undergoing excessive contraction. the scope of expenditure consolidation widened considerably among developing countries since a previous analysis was carried out in October 2010 (Ortiz et al. In a second phase of the crisis (2010 onward).47] at 11:58 28 August 2013 . runs a high risk of exclusion at a time when children and women are most in need. and rationalizing social protection schemes. C O N C LU S I O N S Most developing countries moved swiftly to counter the effects of the global economic crisis by introducing fiscal stimulus packages during 2008–09. as demonstrated by the UK Women’s Budget Group’s (2010) recent analysis. especially in rural areas. because women are more dependent on public support and more likely to face pensioner poverty than men. At the time of writing. such as food items and fuel and energy products. even in countries with a policy intention of safeguarding so-called priority spending.124. transport. and ninety-one developing countries expected to reduce annual expenditures in 2012. which protected or increased assistance to social sectors. on average. As a result. to older persons and their families. in 2010. and education goods and services. and other basic goods unaffordable. The adverse effects of the main austerity measures being adopted were also likely to be disproportionately felt by children and women: wage bill reductions can hamper the delivery and quality of essential health. with seventy developing countries reducing total expenditures by nearly three percent of GDP. Despite data gaps. aggregate fiscal contraction during 2010–12 likely affected social sector spending allocations and jeopardized the ability of social protection systems to provide adequate support to vulnerable children and women. many governments began to cut deficits and reduce overall expenditures.A U S T E R I T Y M E A S U R E S I N D E V E L OP I N G C O U N T R I E S person at who receives a pension is an asset.127. And there are other risks in the current policy environment.

lobbying for increased aid and transfers. tapping into fiscal savings and foreign exchange reserves.47] at 11:58 28 August 2013 value-added tax (VAT) rates or sales taxes.A RT I C L E S Downloaded by [188. #420. tax reforms pose further dangers to children and women. as well as possible alternative policy options.and middle-income countries. even in the poorest countries. NY 10017. including children and women. but they can also provide essential support to vulnerable households when they are most in need and ensure that economic recovery is inclusive of all persons. #446. In fact. macroeconomic and fiscal decisions are often taken without comprehensive assessment of their potential impact on employment. such revenue-side policies can further erode the already limited incomes of vulnerable households and stifle general economic activity. borrowing or restructuring existing debt. As a result. Jingqing Chai. which include reallocating current expenditures. New York.org N O TES 1 Developing countries are defined as non-high income countries according to World Bank classifications. It is therefore imperative that decision makers carefully review the distributional impact. human development. and Matthew Cummins 2011c). NY 10017. However. 74 .124. all low. Isabel Ortiz UNICEF – Division of Policy and Practice 3 UN Plaza. there are a number of alternative options to boost social investments. and inclusive and sustainable growth. for economic and social recovery. Chai. placing a disproportionate burden on poorer households (Ortiz.127. and Cummins 2011a). Not only can these viable options counter the intensifying drive toward austerity. USA e-mail: iortiz@unicef. or. USA e-mail: mcummins@unicef. in other words. In the absence of exemptions. and adopting a more accommodating macroeconomic framework (Isabel Ortiz. it is important to focus policies on preserving and expanding pro-poor expenditures within a framework of medium-term fiscal sustainability. they can also be regressive. Protecting vulnerable populations is critical to equitably sharing the adjustment costs and avoiding detrimental or even irreversible effects on children and women. To mitigate the risk of social spending being adversely impacted during expenditure contraction in the short term. increasing tax revenue. It is also imperative that policymakers recognize that spending cuts are not inevitable. New York.org Matthew Cummins UNICEF – Division of Policy and Practice 3 UN Plaza.

Isabel Ortiz. “Targeting Outcomes Redux. Chai. Jim Brumby and Marijn Verhoeven (2010). 2010).” World Bank Research Observer 19(1): 61–85. judiciary. In practice. the rate at which teaching posts are created will need to increase if universal primary education is to be achieved by 2015. Scientific and Cultural Organization (UNESCO. and Marjorie Lamont Henriques.” In The Day after Tomorrow: A Handbook on the Future of Economic Policy in the Developing World. “Measuring Multidimensional Poverty in India: A New Proposal. defense-related – were included as priority and therefore protected under country programs.” Working Paper 15. Brumby. Mary. UNICEF. R EF EREN C ES Alkire. 75 . 2010.” World Development 19(11): 1485–508. “Petroleum Product Subsidies: Costly. Adjustment with a Human Face. and Frances Stewart. eds. Engendering Adjustment for the 1990s. and Xavier R. primary education and basic health are common elements of priority pro-poor social spending. Giovanni Andrea. Robert Gillingham. London: Commonwealth Secretariat. DC: World Bank. Shamsuddin Tareq. Coady. Roman Mogilevsky. Oxford Poverty and Human Development Initiative (OPHI). “Multi-Dimensional Poverty Map: An Illustration Using Mongolia Census Data.A U S T E R I T Y M E A S U R E S I N D E V E L OP I N G C O U N T R I E S 2 3 4 Downloaded by [188. Bourguignon. 2010. National strategies and policy discussions commonly identify the need to protect priority pro-poor social expenditures. indicating some consideration of distributional impacts. but governments may not view as priority and therefore may exclude other investments with positive distributional impacts on vulnerable groups. “Public Expenditure after the Global Financial Crisis. “The Impact of the Global Financial Crisis on Education and Health in the Economies of the Former Soviet Union. Washington. For example.” Working Brief 1002. Oxford: Clarendon Press. International Monetary Fund (IMF). or public housing. and Christian Morrisson. Tendai Bare.47] at 11:58 28 August 2013 See. Jingqing. United Nations Children’s Fund (UNICEF). Center for Social and Economic Research (CASE). Inequitable. However. and Justin Tyson.” Social and Economic Policy Working Paper. and the definition changes from country to country. water supply and sanitation. 2004. 1987. 193–206.124. 1989. “Poverty and Income Distribution during Adjustment: Issues and Evidence from the OECD Project. Harold and Jingqing Chai. for example. Sire. Margaret Grosh. Jim and Marijn Verhoeven. and Josh Hoddinott. 2010. edited by Otaviano Canuto and Marcelo Guigale. Rolando Ossowski. there is no universally accepted definition of priority expenditures. in some cases. such as social protection. 2010. Chubrik. These approaches raise questions about the effectiveness of priority setting in safeguarding social spending areas that are most essential to directly supporting vulnerable populations. John Piotrowski. who conclude that growth in health and education spending fell below 2 percent during 2009 after averaging nearly 10 percent between 2005 and 2008 in a sample of 108 developing countries. Marek Dabrowski.” Staff Position Note 10/05. David. Sabina and Suman Seth.” CASE Network Reports 100. Our reading of recent IMF country reports suggests that a wide variety of spending categories – such as electricity. according to United Nations Educational. Alexander. and. Coulombe. David. 2011. “Protecting Salaries of Frontline Teachers and Health Workers. Jaime de Melo.127. Coady. and Rising. François. Chinery-Hesse. and Irina Sinitsina. Richard Jolly. Cornia. Bina Agarwal. 2008. 1991.

Molina-Gallart.” Inter Press Service News Agency.A RT I C L E S Dermott. Thandika. 2010. Brussels: European Network on Debt and Development (EURODAD). Centre for Development Policy and Research (CDPR). McKinley. Mark. and Matthew Cummins. UNICEF. School of Oriental and African Studies. 2011b. “Burundi: Sixth Review Under the Three-Year Arrangement Under the Extended Credit Facility and Requests for Extension of the Arrangement and Augmentation of Access – Staff Report. Fiscal Reforms That Work. 2010.124. ———. 1991. Núria. Washington. The Impact of the Global Economic Crisis on the Budgets of Low-Income Countries. Downloaded by [188. Jingqing Chai. “Has the IMF Abandoned Neoliberalism?” Development Viewpoint 51.47] at 11:58 28 August 2013 76 .127. Kyrili. Mapson. ———. Katerina and Matthew Martin. Oxford: Oxfam International. 2011. Isabel. UNICEF. 2004. http://www. 2010.” http://www. Palitza. 2011c. Ortiz. and Statement by the Executive Director for Gabon.” IMF Country Report 11/199. and Gabriel Vergara. “Austerity Measures Threaten Children and Poor Households: Recent Evidence in Public Expenditures from 128 Developing Countries. 2010b. London: HelpAge International. May 18. Bail-out or Blow-out? IMF Policy Advice and Conditions for Low-Income Countries at a Time of Crisis. John and Robert F. 2011a. 1996. and Statement by the Executive Director for Burundi.imf.” Social and Economic Policy Working Paper. “FAO Food Price Index. Bristol: Fawcett Society Bristol Local Group. Cutting Women Out in Bristol: Impact Assessment of the Public Spending Cuts on Women in Bristol. Commodities. ———. ———. DC: IMF. DC: IMF. Norman L.” Social and Economic Policy Working Paper. Washington. “HEALTH-AFRICA: Global Financial Crisis Leads to HIV Budget Cuts. “Prioritizing Expenditures for a Recovery for All: A Rapid Review of Public Expenditures in 126 Developing Countries. “Identifying Fiscal Space: Options for Social and Economic Development for Children and Poor Households in 184 Countries.” IMF Policy Paper.” IMF Country Report 11/97. World Economic Outlook: Tensions from the Two-Speed Recovery – Unemployment. “Targeting and Universalism in Poverty Reduction. “Exiting from Crisis Intervention Policies. 2005. Regional Economic Outlook: Asia and Pacific – Leading the Global Recovery: Rebalancing for the Medium Term.fao.” Social and Economic Policy Working Paper. 2011c. Economic Issues 4. 2010a. Food and Agricultural Organization of the United Nations (FAO).” IMF Policy Paper. ———. UNICEF. “Strategies for Fiscal Consolidation in the Post-Crisis World. DC: IMF. University of London.org/external/ pubs/ft/weo/2011/01/weodata/download. Public Information Notice on the Executive Board Discussion. 2013. Ortiz.org/worldfoodsituation/wfs-home/foodpricesindex/en/.aspx.” Social and Economic Policy Working Paper. Isabel. “Gabon: 2010 Article IV Consultation – Staff Report. 2010c. 2011a. and Capital Flows. ———.” Social Policy and Development Programme Paper 23. Terry. 2009. Washington. Age and Security: How Social Pensions Can Deliver Effective Aid to Poor Older People and Their Families. Mkandawire. Press Release on the Executive Board Discussion. Kristin. Matthew Cummins. Wescott. 2010. Anna.” Journal of International Development 3(1): 29–37. UNICEF. Gorman. Staff Supplement. C. Hicks. “Expenditure Reductions in Developing Countries Revisited. Jingqing Chai. United Nations Research Institute for Social Development (UNRISD). 2011b. International Monetary Fund (IMF). ———. “Escalating Food Prices: The Threat to Poor Households and Policies to Safeguard a Recovery for All.

“A Gender Impact Assessment of the Coalition Government Budget. 2004.” Asian Development Bank Institute Discussion Paper 5. Massimiliano Calì. ———. Hannah Bargawi. DC: IMF. “World Development Indicators (WDI). The Hidden Crisis: Armed Conflict and Education. et al. 2007. and Terry McKinley. and Pritha Mitra. Ernest Aryeetey. Earlier she worked in academia in Spain. Matthew Cummins is Social Policy and Economic Specialist at UNICEF.124.worldbank. and James Heintz. Gerald Epstein. “Pro-Growth Alternatives for Monetary and Financial Policies in Sub-Saharan Africa. 2010. Ravallion. John and Terry McKinley. Paris: UNESCO. 1999. United Nations Educational. 2010.127. 2008. She has over twenty years of experience working in more than thirty countries in various areas of social and economic development. Its Gender and Ethnic Implications. Health. 2007. Scientific and Cultural Organization (UNESCO). From 2005 to 2009 she was Senior Advisor at the United Nations Department of Economic and Social Affairs (UNDESA).” UK Women’s Budget Group. NOTES ON CONTRIBUTORS Isabel Ortiz is Associate Director of Policy and Practice at UNICEF. and Policy Responses.do?Step=12&id=4&CNO=2. Malaysia: Third World Network. “The Global Financial Crisis and Developing Countries: Synthesis of the Findings of 10 Country Case Studies. Standing in the Way of Development? A Critical Survey of the IMF’s Crisis Response in Low-Income Countries.” Journal of Applied Economics 5(1): 95–121.” http://databank. International Poverty Centre. Paolo Dudine. UK Women’s Budget Group. UNDP. 2010. Robert. Pollin.” Policy Research Brief 6. 2010. and Parenting. Eteri Kvintradze. Tayo Fakiyesi. org/ddp/home. Yongzheng. United Nations Development Programme (UNDP). Dr Ortiz has written over forty-five publications translated in several languages. Pradeep. Penang. Van Waeyenberge. Dirk. at the Asian Development Bank. “Cognitive Development among Young Children in Ecuador: The Roles of Wealth. Nkunke Mwase. Weeks.” Journal of Human Resources 42(1): 49–84. “Poverty Targeting in Asia: Country Experience of India. “The Macroeconomic Implications of MDGBased Strategies in Sub-Saharan Africa. “Is More Targeting Consistent with Less Spending?” International Tax and Public Finance 6(3): 411–19. Sibabrata Das. Washington.47] at 11:58 28 August 2013 Paxson. 2009. Srivastava. Christina and Norbert Schady. Overseas Development Institute (ODI). Education for All Global Monitoring Report. 2010. “The Global Economic Crisis. Olu Ajakaiye.” Gender and Development 18(2): 179–99. International Poverty Centre. and from 1995 to 2003. Yang. Creating Policy Space in Low-Income Countries during the Recent Crises. With a PhD from the London School of Economics. Martin. He leads research and advises country offices on designing policies 77 . Debapriya Bhattacharya. Willem te Velde. 2012. where she was founding member of its Poverty Reduction Unit.” Working Paper 306.A U S T E R I T Y M E A S U R E S I N D E V E L OP I N G C O U N T R I E S Downloaded by [188. World Bank. Seguino. Stephanie. Charles Ackah.” Policy Research Brief 4. 2002. Elisa. “Are the Poor Protected from Budget Cuts? Evidence for Argentina.

He holds an MA in International Economics from Johns Hopkins School of Advanced International Studies and has published widely in international development books and journals. He has worked on social policy issues for more than ten years with the Inter-American Development Bank.127. United Nations Development Programme.A RT I C L E S to protect children and poor households from the adverse impacts of macroeconomic shocks as well as on real-time monitoring.47] at 11:58 28 August 2013 78 .124. and the World Bank. Downloaded by [188. fiscal space and social budgeting issues. US Peace Corps.

Congo. Kitts and Nevis St.124. Kitts and Nevis Sudan Timor-Leste Tunisia Old-age pension reform (n = 28) Algeria Antigua and Barbuda Belarus Belize Benin Bosnia and Herzegovina Botswana Bulgaria Burkina Faso Burundi Cambodia Chad Chile Costa Rica Côte d’Ivoire Djibouti Fiji Gabon Grenada Guinea-Bissau Haiti Honduras India Jamaica Jordan Kazakhstan Kiribati Lebanon Lithuania Macedonia Maldives Marshall Islands Micronesia Moldova Montenegro Mozambique Nicaragua Downloaded by [188. 2010–11 Wage bill cuts or caps (n = 56) Reduce or eliminate subsidies (n = 56) Algeria Angola Belarus Bolivia Burkina Faso Burundi Cameroon Cape Verde Central African Rep. Dominican Rep. Dem.47] at 11:58 28 August 2013 Albania Antigua and Barbuda Belarus Belize Benin Bosnia and Herzegovina Bulgaria Egypt Guyana Honduras India Jamaica Jordan Lebanon Lithuania Mali Mexico Micronesia Montenegro Nicaragua Romania Russia Serbia St. Egypt El Salvador Fiji Gabon Ghana Grenada Guinea-Bissau Haiti Honduras India Indonesia Iran Iraq Jordan Kiribati Kosovo Lesotho Liberia Macedonia Malaysia Maldives Mali Mauritius Mexico Mozambique Further target social protection (n = 34) Algeria Antigua and Barbuda Belarus Bolivia Bosnia and Herzegovina Bulgaria Cambodia Dominica Egypt El Salvador Fiji Grenada India Indonesia Jordan Kazakhstan Lebanon Malaysia Mauritania Mauritius Moldova Mongolia Mozambique Nepal Nicaragua Paraguay Peru Philippines Romania Russia St.127. Rep.A U S T E R I T Y M E A S U R E S I N D E V E L OP I N G C O U N T R I E S Appendix Table 1 Selected adjustment measures commonly considered. Lucia Tunisia Turkey Ukraine (Continued ) 79 .

Lucia Swaziland Tajikistan Tanzania Timor-Leste Tonga Tunisia Tuvalu Ukraine Vanuatu Yemen Increase wage bill (n = 23) Benin Bhutan Bolivia Cameroon Central African Rep. China Dominican Rep. Fiji Guyana Haiti Indonesia Introduce/expand old-age pensions (n = 16) Bolivia China El Salvador Georgia Guyana Kosovo Kyrgyz Republic Macedonia Mongolia Mozambique Panama Seychelles Further target social protection (n = 34) Old-age pension reform (n = 28) Downloaded by [188.127. Kitts and Nevis St. El Salvador Equatorial Guinea Haiti 80 . Kitts and Nevis Sudan Suriname Tanzania Thailand Timor-Leste Togo Tunisia Tuvalu Ukraine Yemen Increase or introduce subsidies (n = 10) Bangladesh Georgia Liberia Mali Mauritania Mozambique Nicaragua South Africa Togo Zambia Expand social protection (n = 22) Antigua and Barbuda Armenia Bolivia Burundi China Dominican Rep.A RT I C L E S Appendix Table 1 Continued Wage bill cuts or caps (n = 56) Reduce or eliminate subsidies (n = 56) Nepal Nicaragua Nigeria Pakistan Palau Philippines Romania Serbia Sierra Leone St.47] at 11:58 28 August 2013 Nigeria Palau Romania Samoa Serbia Solomon Islands South Africa St.124.

[2011a]). 81 .127.A U S T E R I T Y M E A S U R E S I N D E V E L OP I N G C O U N T R I E S Appendix Table 1 Continued Increase wage bill (n = 23) Increase or introduce subsidies (n = 10) Expand social protection (n = 22) Iran Iraq Kenya Kyrgyz Republic Mauritania Mozambique Panama Philippines Senegal St. see Ortiz et al.124.47] at 11:58 28 August 2013 Kosovo Kyrgyz Republic Lao PDR Lesotho Mongolia Namibia Niger Panama Philippines Russia Suriname Uruguay Zimbabwe Source : Authors’ analysis of 124 IMF country reports published from January 2010 to September 2011 (for details. Kitts and Nevis Sudan Ukraine Introduce/expand old-age pensions (n = 16) Sudan Tajikistan Turkey Zimbabwe Downloaded by [188.

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