Jason Hickel, Salmaan Keshavjee, Maxine Burkett and Eugene T. Richardson, “Structural adjustment: damages, reparations and pathways to non-recurrence”, BMJ Global Health, March 2026.
The 1970s were a good decade for the global South. Between 1960 and 1980, real per capita income grew across Asia, Africa, and Latin America. Countries that had recently thrown off colonial rule were investing in public healthcare and education, protecting their industries, and organising production around national development.
Then, beginning in the 1980s, the International Monetary Fund (IMF) and the World Bank began structural adjustment programmes across Asia, Africa and Latin America. Decades later, many countries in the impact regions continue to struggle with weak public health systems, stagnant incomes and high levels of poverty.
In a recent paper published in BMJ Global Health, economists and public health researchers Jason Hickel, Salmaan Keshavjee, Maxine Burkett, and Eugene T. Richardson argue that the institutions that implemented these programmes now owe reparations.
The repayment burden
Structural adjustment programmes emerged during the debt crises of the late 1970s and 1980s. Many developing countries had borrowed heavily in foreign currencies to finance imports and industrial development. When the United States Federal Reserve raised interest rates in the late 1970s, debt repayments became far more expensive for poorer countries, causing decades-long progress to unravel.
Countries that had borrowed in U.S. dollars suddenly faced ballooning repayments in a currency they had no control over. To prevent governments in the global South from defaulting on loans owed to American banks, the U.S. worked through the IMF and World Bank to roll over those debts, attaching a set of sweeping economic reforms as conditions that would come to be known as structural adjustment programmes, or SAPs.
SAPs typically demanded three things. First, austerity: slash public spending on healthcare, education, food subsidies, and social security, so that the money saved could flow back to creditors. Second, privatisation; by transfering public services and state-owned industries to private capital. And, third, by deregulating industrial policy, tariffs, capital controls, and labour protections.
Countries had limited room to refuse. Defaulting on loans was risky, and the institutions pushing these conditions controlled international finance.
These SAPs should also be viewed in a longer historical context. After independence, many governments in the global South had used industrial policy and public investment to break away from colonial economic arrangements that kept labour and resources cheap for Western firms. The SAPs effectively reversed these gains, re-cheapening southern labour and re-opening vulnerable markets to the global North.
Social and economic setback
Economic growth in the global South before SAPs averaged around 3.2% annually. But growth slowed sharply, falling to a mere 0.7% during the era of structural adjustment in the 1980s and 1990s. The South collectively lost an average of $480 billion per year in potential national income during this period.
In Latin America, real income per adult fell nearly 15% after 1980 and did not recover to previous levels until 2006. In Sub-Saharan Africa, incomes fell nearly 20% before eventually recovering decades later. In Jamaica, trade and exchange-rate liberalisation in the early 1990s caused food prices to rise sharply after currency depreciation. In China, extreme poverty rose during a phase of market-oriented reforms linked to World Bank adjustment policies.
The effects on health were also severe. A 2017 review found that SAPs imposed by the IMF, World Bank, and African Development Bank had a strong negative impact on child and maternal health. Studies on Sub-Saharan Africa linked adjustment to an additional 85.62 child deaths per 1,000 children and an additional 360 maternal deaths per 1,00,000 live births. In Kenya, the authors calculate, 3,05,000 excess infant deaths occurred between 1986 and 2010 relative to the pre-adjustment trend.
The mechanisms are not hard to trace. SAPs cut government spending on health, led to the closure of facilities, and limited the hiring of doctors and nurses. Currency devaluation made imported drugs and medical supplies more expensive. Privatisation and user fees reduced access to essential services, and wage losses made families more vulnerable to disease in the first place.
Structural adjustment also enabled large financial outflows from the global South. The removal of capital controls allowed foreign companies to repatriate profits at up to $250 billion a year. Trade deregulation enabled further outflows exceeding $1 trillion per year, mostly to evade taxes. These were surpluses generated within developing countries that were no longer available for reinvestment in public services or domestic development.
Responsibility for repair
The IMF and World Bank, as the primary architects of these programmes, should bear responsibility for repair. One approach the authors outline would be to quantify wage losses, cuts to public services, and capital outflows attributable to SAPs, adjusted for inflation and due interest. Another mechanism would be to calculate losses to national income against a counterfactual in which the adjustments were never imposed. A third would focus specifically on welfare impacts, such as poverty and mortality, to provide compensation that restores people to the social indicators they would have reached had SAPs never existed.
But reparations face procedural obstacles, put in place by design. The IMF and World Bank enjoy sovereign immunity, shielding them from lawsuits through normal channels. Their governance structure compounds the problem. The Global North, with a mere 15% of the world’s population, controls nearly 60% of the voting power in both institutions. The U.S. alone holds a veto.
Beyond reparations, the paper calls for a guarantee of non-recurrence by abolishing structural adjustment conditions on all future lending, democratising both institutions so that aid recipients have a meaningful say in policy, and ending their sovereign immunity status.
If such transformative changes cannot happen from within, these institutions should be replaced entirely. Alternatives are already emerging, including the BRICS New Development Bank and the Asian Infrastructure Investment Bank, established by and for the global South. Neither attaches structural adjustment conditions to finance.
Published – May 13, 2026 08:00 am IST
