Ideology over theory: World Bank policy on user charges for health care, 1978–1993
Bio: Dr Christopher Sirrs is Research Fellow at the London School of Hygiene and Tropical Medicine, working on the Wellcome Trust Medical Humanities Investigator Award, ‘Health Systems in History: Ideas, Comparisons, Policies.’ Along with Professor Martin Gorsky, he has previously written on the historical evolution of international health system metrics (Journal of Global History), and the rise and fall of ‘universal health coverage’ as a goal of international health politics in the early twentieth century (American Journal of Public Health). Christopher completed his PhD at the School in 2016, exploring the history of the British system of occupational health and safety regulation.
Abstract: Under the presidency of Robert McNamara (1968–1981), the former US defence secretary, the World Bank became increasingly involved in international health from the 1970s. Initially taking an indirect interest, in 1980 the Bank began to directly lend to the health sector, soon becoming one of the largest external funders of healthcare in low-income countries. In 1987, the Bank published Financing of Health Services in Developing Countries: An Agenda for Reform. This report is highly controversial, for it recommended the widespread introduction of user charges for healthcare at the point of service. Propagated at a time when many countries were seeking to actively reduce social expenditures (often as a condition of structural adjustment lending by the Bank and IMF), the introduction of user charges in low-income countries was highly destructive, resulting in widespread damage to health services, catastrophic household expenditures, and increased mortality and morbidity.
Why then were user charges promoted by the World Bank? Drawing upon an analysis of declassified archival material from the Bank in Washington, DC, this paper examines the history of the Bank’s policy on user charges, highlighting how an early theoretical concern with equity and efficiency became subordinated to ideology by the mid 1980s, and the Bank’s dominant desire to reduce social expenditures and the role of the state. Focusing in particular on the role played by health economists such as David de Ferranti, it shows how the deleterious effects of user charges were considered by the Bank as early as 1981, but ultimately discarded as it embraced neoliberal economic theory and faith in the ability of the market to reform healthcare. While various arguments for user charges were put forward by Bank economists from the perspective of equity, these were highly idealistic, based on model economic conditions which rarely prevailed in the real world.