Critically  assess  the  World  Bank’s  impact  on  public  health  

with  reference  to  structural  adjustment.  
Discuss  with  reference  to  a  specific  country  or  region.  
 

Albert  Francis  E.  Domingo,  MD1  

Introduction  
On   14   October   2014,   the   Philippines’   Finance   Secretary   heralded   news   that   the   country   has  
signed  on  to  a  new  Third  Development  Policy  Loan  (DPL  3)  worth  $300  million  with  the  World  Bank.  
As  reported  in  the  mainstream  news  media,  “[u]nder  the  loan,  the  Philippines  will  receive  support  
in   strengthening   priority   public   investmentment   implementation,   reducing   the   cost   of   doing  
business   for   jobs   creation   and   poverty   reduction,   developing   the   human   capital   of   the   poor,  
promoting   fiscal   transparency   and   good   governance,   as   well   as   consolidating   fiscal   sustainability  
through   revenue   mobilization   and   risk   management,”   and   the   Department   of   Finance   will   promote  
“policy   dialogue   and   monitoring   and   evaluation”   with   other   government   agencies,   including   the  
Department  of  Health  (Rivera  2014).  A  few  months  later  at  a  press  conference  in  Japan,  World  Bank  
Group  President  Jim  Yong  Kim  (2015)  gave  an  optimistic  overview  of  how  the  Bank  can  end  extreme  
poverty  by  the  year  2030,  thereby  boosting  shared  prosperity.  In  his  speech,  Kim  made  reference  to  
an   earlier   pronouncement   by   his   predecessor   in   1973,   Robert   McNamara,   who   described   a  
situation   that   the   Bank   wanted   to   avoid:   “a   condition   of   life   so   degraded   by   disease,   illiteracy,  
malnutrition,  and  squalor  as  to  deny  its  victims  basic  human  necesities.”  
 
In  1980,  after  McNamara  eloquently  sketched  the  above  picture  of  “absolute  poverty”  and  
shifted   the   Bank’s   focus   from   post-­‐war   reconstruction   to   poverty   eradication   (Konkel   2014),   the  
Philippines,   with   then   President   Ferdinand   Marcos   in   power,   signed   on   to   its   first   Structural  
Adjustment   Loan   (SAL)   Agreement   (Loan   Number   1903;   Anon   1980).   There   have   been   earlier  
efforts   (as   far   back   as   1949)   at   structural   adjustment   independent   of   the   Bank’s   influence.   One  
closer   action   was   by   the   International   Monetary   Fund   (IMF)   in   1976-­‐1979   through   its   Extended  
Fund   Facility   (EFF)   (Montes   1988).   Often   lumped   together   with   other   “neoliberal”   policies,  
structural  adjustment  programs  (SAP)  by  the  Bank  have  been  strongly  criticised  globally  as  having  a  
negative   impact   on   public   health,   through   its   three   main   policy   interventions   of   (i)   reduced  
government  expenditure,  (ii)  liberalisation  of  markets,  and  (iii)  exchange  rate  devaluation  (Breman  
and   Shelton   2007).   Caution   has   often   been   aired   however   that   a   nuanced   analysis   of   this   claim   has  
to   be   informed   by   a   specific   country   context,   including   how   macroeconomic   policies   translate   to  
microeconomic   decisions   of   the   population   being   studied,   and   that   as   far   as   is   practicable,   an  
empirical  and  data-­‐driven  approach  should  be  used  (Herrin  1992).  
 
This  essay  shall  critically  assess  the  World  Bank’s  impact  on  public  health  with  reference  to  
structural  adjustment.  It  will  do  so  with  reference  to  the  country  experience  of  the  Philippines.  It  
shall  begin  by  describing  the  original  mandate  of  the  Bank,  and  analysing  how  a  financial  institution  
for  post-­‐war  reconstruction  turned  into  an  influential  actor  in  global  health.  It  will  then  examine  the  
                                                                                                           
The author submitted this essay to The University of Edinburgh for assessment in the course “Global Politics of Public Health”. He
was a student in the MSc Health Systems and Public Policy programme of the university in the 2014/15 academic year. The views
expressed herein are the author’s own, and do not necessarily represent those of the university or its faculty.
 
Suggested citation: Domingo, A.F.E. (n.d.) Critically assess the World Bank’s impact on public health with reference to structural
adjustment. Discuss with reference to a specific country or region. [Unpublished].
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Domingo, A.F.E. (n.d.)

actual  practices  of  the  Bank  in  a  specific  period  known  for  neoliberal  policy  influence  and  structural  
adjustment  through  conditionalities  imposed  as  part  of  contractual  loans,  including  how  these  have  
affected  public  health  outcomes.  At  that  point,  the  unique  country  context  of  the  Philippines  will  be  
highlighted  –  particularly  in  light  of  political  developments  that  may  have  provided  justification  for  
neoliberalism  first  as  a  tool  to  enrich  a  dictator  and  his  cronies,  and  then  as  a  means  to  undo  the  
damage  that  was  inflicted  by  a  corrupted  state.  The  essay  will  then  discuss  frameworks  by  which  
SAP  impacts  on  public  health  may  be  evaluated,  how  difficult  it  is  to  do  this,  and  how  empirical  data  
on   the   Philippines   may   be   interpreted   both   positively   and   negatively.   A   brief   update   on   the  
changing  context  both  as  regards  the  Bank’s  practices  and  concerning  the  Philippines’  situation  will  
then   be   provided.   The   essay   will   finally   conclude   with   a   summary   of   its   key   points,   and   some  
recommendations  for  further  analysis.  
 
An  International  Mandate  for  Reconstruction  and  Development  
Formally  known  as  the  International  Bank  for  Reconstruction  and  Development  (IBRD),  the  
World  Bank  has  in  its  Articles  of  Agreement  (Anon  2012)  five  purposes,  foremost  of  which  is  
 
“[t]o   assist   in   the   reconstruction   and   development   of   territories   of   members   by  
facilitating   the   investment   of   capital   for   productive   purposes,   including   the  
restoration   of   economies   destroyed   or   disrupted   by   war,   the   reconversion   of  
productive  facilities  to  peacetime  needs  and  the  encouragement  of  the  development  
of  productive  facilities  and  resources  in  less  developed  countries.”  
 
Notwithstanding  the  four  other  purposes,  an  ordinary  meaning  interpretation  of  the  above  
would  seem  to  imply  that  well  after  members  have  recovered  from  the  second  world  war,  which  
occurred   right   before   the   Bank   was   established   in   1944,   then   it   would   have   accomplished   its  
purpose  and  perhaps  proceed  with  permanently  suspending  its  operations  and  closing  down,  the  
procedures  for  which  are  also  provided  for  in  its  Articles  of  Agreement  (Art  VI,  Sec  5).  An  analysis  of  
its   institutional   design   however   explains   that,   unlike   other   more   recent   global   and   inter-­‐
governmental   initiatives   that   responded   to   specific   crises,   the   Bank’s   greater   formality   and   legal  
structure  makes  it  less  disposable  and  thus  enduring  (Wouters  and  Odermatt  2014).    
 
On   the   one   hand,   this   staying   power   of   the   Bank   may   be   attributed   to   its   ability   to  
continually   redefine   its   purpose,   through   supposedly   narrow   restriction   brought   about   by   the  
“political   activity   prohibited”   clause   in   its   Articles   of   Agreement   (Art   IV,   Sec   10).   The   Bank   does   this  
through  an  as-­‐needed  reinterpretation  of  what  “economic  considerations”  mean.  Thus,  where  the  
Bank  used  to  always  focus  on  discrete  and  often  literally  concrete  projects  towards  the  exclusion  of  
a  country’s  political  sphere,  it  now  provides  inputs  to  a  country’s  general  policy  environment  under  
the   justification   that   doing   so   addresses   the   economic   considerations   upon   which   the   project   must  
be  completed  (Bradlow  and  Grossman  1995).  On  the  other  hand,  this  flexibility  as  to  its  mandate  
has  also  been  criticised  as  “mission  creep”;  furthermore,  grouping  this  with  the  Bank  staff’s  loyalty  
to  the  institution  alone  (and  not  so  much  to  its  member  states)  and  its  access  to  large  amounts  of  
resources,   there   is   the   apprehension   of   it   having   a   “Frankenstein   problem”   where   the   members  
may  have  lost  control  over  time  due  to  increasing  autonomy  (Wouters  and  Odermatt  2014).  
 
It   must   be   noted   however   that   the   Bank’s   inclination   towards   development   is   not   just   an  
after-­‐thought,   but   is   integral   to   its   very   genesis.   The   1944   Bretton   Woods   conference   is   often   cited  
as   the   conceptual   birth   of   the   Bank   (specifically   the   IBRD),   but   its   design   can   be   traced   earlier   to  
 

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efforts   to   establish   an   Inter-­‐American   Bank   pushed   by   Latin   American   countries   and   then  
rejected/accepted   by   the   United   States   at   varying   instances   and   for   different   reasons.   In   describing  
this   formation,   Helleiner   (2009)   seems   to   have   shown   the   precursor   for   a   public   (Keynesian)   vs  
private  (neoliberal)  sector  leadership  debate  even  then,  when  internal  US  debates  between  private  
bondholders   and   the   US   Treasury   as   to   the   IBRD’s   financing   prevailed.   Initially,   there   was   an  
analogy   that   framed   the   Bank   as   an   international   equivalent   of   the   domestic   state’s   role   in  
equitably   redistributing   accumulated   wealth.   In   any   case,   the   Marshall   Plan   of   1947   meant   that  
huge  sums  of  money  were  made  available  for  post-­‐war  reconstruction  apart  from  the  Bank’s  own  
funds   (Konkel   2014).   Henceforth,   “[r]elieved   of   the   reconstruction   burden,   the   bank’s   directors  
turned  their  full  attention  to  development”  (Ruger  2005,  p.62).  
 
The  Bank’s  Macroeconomic  Development  Policies  and  their  Effects  on  Public  Health  
The   Bank’s   current   influence   in   global   health   stems   from   its   activities   and   interests   in  
Health,   Nutrition,   and   Population   (HNP),   within   its   flexible   mandate   of   development.   In   his   treatise  
on   the   concept   of   poverty   in   the   Bank’s   history,   Konkel   (2014)   outlined   how   the   institution  
considered   poverty   and   its   social   dimensions,   health   being   one   of   them,   and   how   “absolute  
poverty”   was   seen   as   an   impediment   to   the   successful   repayment   of   loans   taken   out   by   its  
members.   From   the   moment   Bank   President   McNamara   differentiated   “relative   poverty”   from  
“absolute   poverty”,   poverty   was   reinterpreted   within   the   “economic   considerations”   that   would  
justify  bank  intervention.  
 
To  make  itself  more  influential  in  domestic  policy  notwithstanding  the  small  percentage  of  
its   loan   amounts   in   the   financing   of   development   costs   in   developing   countries,   the   Bank  
introduced  conditionalities  into  its  loan  instruments,  which  had  the  force  of  contract  law  between  
itself   and   its   client   states.   The   “neoliberal”   orientation   of   the   Bank’s   policy   prescriptions   was   not  
part   of   its   design   or   mandate;   it   came   in   the   1980s   coincidental   with   the   prominence   of   the  
Washington   consensus.   This   took   place   internally   via   a   personnel   overhaul   that   included   the  
appointment  of  Anne  Krueger  who  had  a  strong  neoliberal  orientation  (Konkel  2014).    
 
The   above   being   said,   four   elements   should   be   distinguished   at   this   point   of   the   essay,  
namely  that  (1)  outside  of  the  original  mandate  of  the  Bank,  (2)  it  imposed  structural  adjustment  as  
a  precaution  to  minimise  the  risk  of  non-­‐repayment,  (3)  through  the  contractual/legal  mechanism  
of   loan   conditionalities,   and   (4)   incidentally   with   the   ideological   motivation   of   neoliberalism  
prevalent  at  the  time.  It  is  the  confluence  of  these  four  elements  that  has  been  extensively  assailed  
as  harmful  to  public  health,  especially  that  of  the  poor;  for  convenience  and  the  purposes  of  this  
essay,  a  structural  adjustment  program  (SAP)  by  the  Bank  shall  mean  this  confluence.  
 
An  SAP  is  said  to  affect  public  health  because  of  its  requirement  for  a  government  to  reform  
its  macroeconomic  policies  so  that  it  will  be  able  to  repay  loans  that  it  will  be  provided  by  the  Bank.  
Typically,   this   means   the   legislation   of   measures   “to   “adjust”   the   structures   within   which   economic  
activity  occurs,  or  social  and  economic  policy  is  made,  so  that  these  structures  are  more  likely  to  
produce   economic   growth”   (Bradlow   and   Grossman   1995,   p.421).   These   adjustments   are   often  
classified   under   three   general   themes:   (1)   reduction   in   government   expenditure   (i.e.,   austerity  
measures),   (2)   liberalisation   of   markets,   and   (3)   exchange   rate   devaluation   (Breman   and   Shelton  
2007).   Gostin   (2014)   cites   the   influential   nature   of   an   SAP,   because   its   acceptance   and  
implementation   by   a   debtor   country   signalled   to   other   sources   of   foreign   funding   whether   a  
government  could  be  trusted  to  repay  its  loans,  through  responsible  macroeconomics.  
 

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Scholars  who  have  defended  the  rationale  for  SAPs  often  say  that  the  short-­‐term  negative  
impacts   of   austerity   measures   and   other   related   neoliberal   adjustments   will   be   outweighed   over  
the   medium-­‐   to   long-­‐term   by   gains   in   prosperity   and   development.   While   to   some   extent   this  
“intertemporal  trade-­‐off”  may  be  tolerated  in  specific  sectors,  the  same  cannot  be  said  for  public  
health,  as  for  example  in  the  case  of  children  (Peabody  1996,  p.827):  
 
“Tomorrow’s  generation  are  today’s  children.  If  they  bear  the  burden  of  reform  or,  
more   specifically,   their   health   bears   the   burden,   they   are   more   likely   to   be   poor   and  
less  likely  to  contribute  in  a  future,  successfully  reformed  economy.  The  short-­‐term  
deterioration  of  children’s  health,  therefore,  imposes  long-­‐term  costs  that  cannot  be  
recovered  by  future  economic  growth.”  
 
Herrin   (1992)   cautions   that   any   empirical   impact   evaluation   of   SAPs   on   public   health   will  
have  to  be  well-­‐informed  as  to  the  specific  implementation  nuances  of  policy  adjustments,  as  well  
as  the  pertinent  characteristics  and  behaviors  of  the  supposedly  affected  population.  He  also  raises  
the   need   for   a   research   strategy   that   includes   the   assessment   of   a   counterfactual,   because   SAP  
impact   on   the   public   health   of   a   particular   population   has   to   be   evaluated   relative   to   another  
population   group   wherein   an   alternative   set   of   policies   were   implemented.   Thus   the   debate   on  
whether   or   not   SAPs   are   bad   for   public   health   continues   up   to   the   present.   Breman   and   Shelton  
(2007,  p.229)  provide  a  dispassionate  overview  of  recent  trends  in  published  literature:  
 
“It  is  not  possible  to  conclude  that  the  empirical  evidence  shows  purely  negative  or  
positive  health  outcomes  resulting  from  structural  adjustment.  Furthermore,  there  is  
no  evidence  that  more  recent  studies  are  more  positive/negative  than  are  previous  
ones.   The   outcomes   seem   to   depend   on   the   variables   investigated,   the   country   or  
region,  and  the  method  used.”  
 
Even   with   the   difficulty   of   obtaining   empirical   evidence   on   the   impact   of   SAPs   on   public  
health,   there   still   are   critiques   that   build   on   this   very   difficulty   of   measurement.   For   instance,   Babb  
(2005,   p.204)   reasons   that   the   divergent   social   outcomes   of   SAP   programs   are   due   to   Bank’s   policy  
prescription  for  markets  to  be  uniformly  “transplanted  to  alien  worlds,  governed  by  different  norms  
and  rules,  and  lacking  the  supporting  institutions  that  took  decades  or  even  centuries  to  develop  
organically  in  their  original  contexts”.  Interestingly,  she  posits  that  in  its  approach  to  SAPs,  the  Bank  
may  have  been  misguided  because  of  a  heavy  reliance  on  economics  as  a  “hard”  discipline,  to  the  
exclusion   of   other   “soft”   disciplines   such   as   sociology,   history,   and   philosophy   that   could   have  
better  informed  the  content  of  what  debtor  countries  were  required  to  do.  
 
Konkel   (2014)   describes   how   the   Bank,   even   while   outwardly   monolithic   in   its  
pronouncements  and  policies  during  the  period  of  SAP  implementation,  has  had  stirrings  of  dissent  
within  its  ranks.  There  were  internal  papers  that  called  for  social  indicators  of  health  and  nutrition  
to   be   included   with   existing   economic   indicators   in   identifying   the   poor.   There   was   cognitive  
dissonance  because  of  the  extensive  use  of  monetary  poverty  lines,  notwithstanding  recognition  for  
poverty’s  multidimensional  nature  that  includes  health.  These  apprehensions  finally  surfaced  in  the  
Bank’s   1990   World   Development   Report   (WDR),   where   investments   in   primary   health   and  
education   were   advocated   as   a   means   to   enhance   the   poor’s   productive   capacity.   This   epiphany  
came  at  the  same  time  with  a  belated  public  acknowledgment  by  the  Bank  that  its  SAPs  did  have  

 

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harmful  effects  on  the  poor,  as  a  response  to  widespread  criticism  that  included  UNICEF’s  annual  
report  entitled  “Adjustment  with  a  human  face”.  
 
A  Dynamic  Sociopolitical  Role  for  SAPs  in  the  Philippines    
The   Philippines’   transactions   with   the   World   Bank   spans   decades   (as   far   back   as   1949),  
similar  to  the  experience  of  many  other  low-­‐  and  middle-­‐income  countries  (LMICs)  that  availed  of  
foreign   financing   to   stabilise   their   economies   (Montes   1988;   Orbeta   1996;   Simbulan   2001).   The  
country’s  receptivity  to  the  Bank’s  influence  may  be  traced  to  the  former’s  status  as  a  colony  of  the  
United   States.   In   fact,   the   “Philippine   Commonwealth”,   as   it   was   then   known,   was   one   of   the  
original   members   of   the   new   IBRD,   with   a   subscription   of   $15   million   (Anon   2012).   This   amount  
made   it   the   19th   out   of   45   original   member   countries   in   terms   of   the   ascending   order   of  
subscription.  
 
When  the  Philippines  entered  into  its  first  SAP,  Ferdinand  Marcos  was  its  President.  Marcos  
started  out  as  a  popular  and  democratically-­‐elected  leader  in  1966,  but  in  1972  he  declared  martial  
law   and   started   exercising   authoritarian,   strongman   rule   over   the   archipelago.   He   has   been  
summarily   accused   of   “bankrupting   the   economy,   abusing   human   rights,   turning   the   Parliament  
into  a  rubber  stamp,  prostituting  the  military,  and  undermining  the  judiciary”  (Aquino  1986,  p.156).  
In  her  paper  published  on  the  same  year  that  the  Marcos  regime  was  peacefully  ousted  by  “People  
Power”,   Aquino   (1986,   p.158)   recalled   how   Marcos   and   his   cronies   used   the   Philippine   state  
machinery  for  personal  profit  and  gain:  
 
“Marcos   and   his   technocrats   blamed   international   economic   changes   for   the  
country’s  economic  debacle,  but  the  real  reasons  are  government  misspending  and  
inefficiency,   extravagance,   corruption,   ill-­‐advised   priorities   and   the   creation   of  
monopolies  in  major  industries  controlled  by  Marcos’s  close  associates.  In  a  system  
that  was  popularized  as  “crony  capitalism,”  friends  and  relatives  of  the  First  Family  
enjoyed   tremendous   privileges,   like   huge   government   loans   to   run   businesses   that  
eventually  failed  and  had  to  be  rescued  by  the  government.”  
 
The   situation   turned   the   Philippine   state   away   from   the   ideals   of   a   “Weberian   state”,   which  
is  one  that  recognises  the  positive  contribution  of  market-­‐oriented  institutions  so  long  as  they  are  
complemented   by   “bureaucratically   structured   public   organizations…   characterized   by   meritocratic  
recruitment   and   predictable,   long-­‐term   career   rewards…”   (Evans   and   Rauch   1999,   p.749).   A  
Weberian  state  should  have  been  the  basis  for  the  neoliberally-­‐oriented  Bank  SAPs  to  work;  it  was  
not   what   the   Philippines   had   when   the   SAPs   were   introduced   to   it.   The   Philippines   under   the  
Marcos   regime   had   a   state   that   continually   intervened   in   the   economy   as   a   matter   of   policy   (Landé  
and  Hooley  1986).  
 
Of  great  interest  is  how  the  Bank’s  SAPs  interacted  with  the  Philippines  from  this  era  of  its  
sociopolitical  history  and  beyond.  Initially,  the  Bank  and  its  SAP  was  manipulated  by  Marcos  and  his  
cronies   in   order   to   extract   resources   from   the   international   arena,   funds   that   would   be   used   to  
strengthen   the   corrupted   state   and   finance   its   predation   of   the   local   economy,   and   no   complete  
structural   adjustment   by   the   Bank’s   influence   took   place;   it   was   selective,   by   internal   decision   of  
the   dictator:   “[F]or   a   full   decade   Marcos   adroitly   managed   to   extract   enormous   sums   from   the   IMF  
and  World  Bank,  bilateral  donors,  and  commercial  banks,”  but  “the  basic  question  that  observers  
debate  is  whether  Marcos  ever  genuinely  adopted  the  reform  agendas  of  the  World  Bank,  the  IMF,  
 

5  

Domingo, A.F.E. (n.d.)

and   his   technocrats…”   (Hutchcroft   1991,   pp.428-­‐430).   Towards   the   successful   People   Power  
revolution   of   1986,   the   situation   reversed:   from   helping   finance   the   Marcos   regime,   the   neoliberal,  
anti-­‐state  intervention  and  pro-­‐free  market  tenets  of  the  Bank’s  SAPs  were  used  by  the  new  and  
popular   administration   to   undo   the   “patrimonial   plunder”   practices   of   monopolies,   state   control,  
and   other   abuses   (Hutchcroft   1991;   Landé   and   Hooley   1986;   Montes   1988).   Stated   differently,  
Marcos   provided   an   adverse   and   corrupt   personification   of   Keynesian   developmentalism   that  
required   state   roles   to   develop,   and   in   doing   so,   Filipinos   may   have   openly   accepted   the   new  
neoliberal  Bank  prescriptions  as  a  way  to  break  free  from  corrupt  Marcosian  state  intrusion  (Bello  
2009).  
 
SAP  Impacts  on  Philippine  Public  Health  
The   above   political   situation   and   interactions   between   the   Philippines   and   the   Bank  
notwithstanding,  we  now  turn  to  examine  impacts  on  the  country’s  public  health.  
 
In   his   empirical   analysis   that   was   later   on   also   seen   by   Orbeta   (1996),   Herrin   (1992,   p.7)  
observed   that   during   the   1980s,   even   as   Philippine   government   expenditures   in   general   either  
increased  or  decreased,    
 
“the   expenditures   for   health   and   education   tend   to   be   more   stable...   they   neither  
rise   in   proportion   to   the   rise   in   total   expenditures   nor   fall   sharply   with   a   drastic  
decline  in  total  expenditures.  So  if  there  were  adverse  (favorable)  effects  on  health  
and   education   during   the   period   in   question   (a   difficult   statement   to   make   with  
confidence,   in   view   of   limited   data),   it   could   not   have   been   simply   due   to   cuts  
(increases)  in  real  government  expenditures  in  the  health  and  education  sectors.  The  
answer  has  to  be  found  elsewhere:  (1)  in  declines  (increases)  in  private  spending  as  a  
result  of  declining  (increasing)  growth  of  per  capita  incomes;  and  (2)  in  the  manner  
in   which   public   resources   in   health   and   education   are   being   spent   (i.e.,   either   less  
efficiently  or  more  efficiently).”  
 
Herrin’s   indication   of   the   need   to   investigate   other   indirect   pathways   by   which   the   SAPs  
could  have  affected  public  health  outcomes  has  been  echoed  in  the  literature,  as  for  example  when  
macroeconomic   policies   on   wage   limits   affect   the   salaries   of   health   workers,   and   when   currency  
devaluation  increases  the  prices  of  imported  medicines  and  medical  equipment  (Kentikelenis  et  al.  
2015).  
 
While   it   clearly   falls   under   grey   literature   and   is   clear   in   admitting   the   difficulties   of  
empirical   measurement   and   establishment   of   causality,   a   report   written   by   Simbulan   (2001)   is  
worth  exploring  to  see  examples  of  how  Bank  SAPs  may  have  affected  Philippine  public  health.  To  
some  extent,  it  provides  an  anthropological  perspective  similar  to  the  broader  and  published  work  
of  Pfeiffer  and  Chapman  (2010).  Simbulan  correctly  observed  that  the  government’s  maintenance  
of   general   expenditures   for   the   social   sectors   throughout   the   SAP   period   is   in   itself   an   austerity  
measure,  because  while  health  needs  increased  as  part  of  population  growth,  public  sector  capacity  
to  deliver  health  services  stagnated.  The  Philippine  government  itself  acknowledged  this  negative  
impact,  when  as  part  of  its  recent  administrative  order  for  universal  health  care,  the  Secretary  of  
Health  wrote  (Anon  2010)  that  
 

 

6  

Domingo, A.F.E. (n.d.)

 

“Public   hospitals   and   health   facilities   have   also   suffered   neglect   due   to   the  
inadequacy  of  health  budgets  in  terms  of  support  for  upgrading  to  expand  capacity  
and   improve   quality   of   services…   Data   have   also   shown   that   the   poorest   of   the  
population   are   the   main   users   of   government   health   facilities.   This   means   that   the  
deterioration   and   poor   quality   of   many   government   health   facilities   is   particularly  
disadvantageous  to  the  poor  who  needs  the  services  the  most.”  

Bank   analysts   also   recognise,   although   in   a   conservative   and   subtle   manner   officially  
challenged   by   management,   its   shortcomings   in   the   Philippines   insofar   as   public   health   is  
concerned  (Zanini  1998,  p.4):  
 
“Assistance   has   ranged   from   relevant   and   marginally   satisfactory   in   some   sectors  
(water   and   sanitation,   and   transport)   to   poorly   relevant   and/or   unsatisfactory   in  
others   (health,   education,   agriculture,   energy,   decentralization)…   Bank   assistance  
did  not  focus,  until  recently,  on  access  to  educational  services  among  the  poor,  and  
it  has  been  limited  in  health  and  family  planning.”  
 
A  Changing  Context  
With  the  moderated  recognition  of  its  shortcomings  as  far  as  SAPs  are  concerned,  it  seems  
that   the   Bank   is   now   catching   up   and   renewing   its   focus   to   be   more   sensitive   not   just   to   the  
“economic   considerations”   of   its   activities,   but   also   to   their   social   impacts   including   health.   Ever  
optimistic  about  the  Bank,  Ruger  (2014)  cites  exciting  times  ahead,  with  a  global  health  expert  now  
President.  She  also  mentions  that  the  newer  approach  of  poverty  reduction  strategy  papers  (PRSPs)  
places   the   Bank   in   a   position   to   “serve   countries   in   achieving   their   own   goals”   (Ruger   2014,   p.2).  
Wamala  et  al.  (2007)  are  not  quick  to  agree  however,  noting  that  even  with  the  more  consultative  
nature  of  PRSPs,  they  still  are  not  that  objective  in  recognising  health  as  contributory  to  economic  
growth   because   of   the   lack   of   explicit   linkages   to   health   outcome   targets   in   the   monitoring   and  
evaluation  frameworks  of  PRSPs.  They  even  ask:  “Do  PRSPs  represent  SAPs  under  another  name?”  
(Wamala  et  al.  2007,  p.246).  
 
As   far   as   the   Philippines   is   concerned,   an   opportunity   for   policy   coherence   between  
macroeconomic  and  health  reforms  (Blouin  2007)  has  emerged  recently.  The  Sin  Tax  Law  of  2012  
increased  excise  taxes  on  tobacco  products  and  alcohol,  which  as  a  revenue  measure  means  better  
macroeconomic   performance,   and   as   a   health   measure   means   a   decrease   in   smoking   prevalence  
alongside  significantly  large  increases  in  government  budgets  for  health  (Sta.  Ana  and  Cruz  2014).    
 
Without   passing   judgment   on   whether   this   is   consistent   with   earlier   SAPs,   what   is   clear   is  
that   the   country   may   now   be   in   a   better   position   to   negotiate   the   terms   and   conditions   of   any  
lending   instruments   it   wishes   to   sign,   if   at   all.   This   brings   to   mind   possibilities   for   new   engagement  
models   between   the   Bank   and   the   Philippines.   For   example,   the   Bank   can   be   a   coach   for   health  
systems  strengthening,  given  its  technical  and  even  political  familiarity  with  the  country  (de  Beyer  
et  al.  2000;  Levine  and  Buse  2006).  
 
Conclusion  and  Recommendations  
In   this   essay,   we   have   critically   assessed   the   World   Bank’s   impact   on   public   health   with  
reference   to   structural   adjustment   and   in   the   country   context   of   the   Philippines.   First,   we   returned  

 

7  

Domingo, A.F.E. (n.d.)

to   the   Bank’s   Articles   of   Agreement   and   then   drew   upon   prevailing   literature   to   show   how   the  
Bank’s   original   mandate   for   post-­‐war   reconstruction   shifted   to   a   very   flexible   interpretation   of  
development   that   now   includes   global   health.   Second,   we   examined   the   actual   practices   of   the  
Bank   during   the   period   of   SAPs   –   clearly   distinguishing   between   and   among   the   Bank’s   mandate,  
structural  adjustment  as  a  fiscal  policy,  the  contractual/binding  nature  of  loan  conditionalities,  the  
neoliberal  development  ideology,  and  the  confluence  of  all  of  these  as  would  affect  public  health.  
Third,   we   explored   the   unique   context   of   the   Philippines,   where   a   dictator   in   power   used   a  
predatory  and  corrupt  state  to  engage  the  Bank  in  a  complex  game  to  maximise  personal  gain,  thus  
also   laying   the   sociological   context   for   neoliberal   interventions   to   take   hold   and   undo   his  
machinations.   Fourth,   we   discussed   how   public   health   in   the   Philippines   fared   while   the   political  
and  economic  upheavals  during  the  SAP  period  took  place:  what  empirically  appeared  as  no  change  
in  government  expenditure  on  health  in  one  perspective  also  meant  in  another  perspective  that  the  
health  system  was  not  being  expanded  as  it  should  be.  Finally,  we  point  to  a  possibly  new  direction  
for   the   Bank   to   engage   a   country   with   relatively   better   macroeconomic   performance,   giving   it   a  
stronger  position  to  negotiate  unlike  the  circumstances  prevailing  when  SAPs  were  first  introduced.  
 
#  
 
 

 

8  

Domingo, A.F.E. (n.d.)

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