The International Monetary Fund’s advice to countries promotes policies that fail to reduce inequality and may even increase it, according to Oxfam research. This advice clashes with what their own research shows countries should do to reduce inequality.
In 2015, the IMF started including inequality into some of their influential country analysis and advice. These so-called “Article IVs” heavily influence national economic policy.
Oxfam’s research is the first independent study of this pilot program. Oxfam looked into 15 of the 18 country reports available at the time and found none of them offered comprehensive steps to reduce inequality. In some cases the reports pushed policies, particularly on labor, which could worsen inequality.
Oxfam International’s Executive Director, Winnie Byanyima, said: “The IMF sounds like it wants to move on from its neoliberal past in acknowledging the massive threat inequality poses. But its actions have to match its own words and research.”
These findings come at the start of the IMF and World Bank Annual Meetings in Washington. Oxfam, along with other members of the Fight Inequality Alliance, is highlighting the important role these institutions play in reducing inequality and poverty.
The report, “Great Expectations,” urges the IMF to adopt a far more thorough approach to the issue, with poverty and inequality reduction at its core. The way their current policy advice is structured, the poorest are too often an afterthought to be compensated with social safety nets.
“The IMF’s initiative is a positive start. Given their history and their global influence, they have a major responsibility to do much more to reduce inequality, and truly become part of the solution,” said Byanyima. “The IMF must promote policies which help countries improve their scores on the Commitment to Reducing Inequality Index.”
The CRII is an Oxfam-led project that ranks more than 150 countries on their policies to reduce inequality.
Oxfam will also be closely monitoring the evolving conversation around education policy. The World Bank’s latest World Development Report pinpointed the vast difference in education that the poorest receive compared to the richest children. While the WDR made important recommendations, it failed to highlight the need for more education financing.
“Poor children will never get the start in life guaranteed to others if countries don’t spend enough to improve schools and properly train teachers,” Byanyima said. “Investing in education is vital to boosting learning and allowing young girls and boys to reach their full potential. The World Bank must champion this.”
Notes to editors
Oxfam International executive director Winnie Byanyima will be in Washington during the Annual Meetings and is available to give interviews on these and other topics.
Download the report: Great expectations: is the IMF turning words into action on inequality?