The IMF is ideologically committed to neoliberalism despite its pronouncements on social inequality
The Bretton Woods Project has recently launched a new IMF surveillance scanner website which analyses 998 IMF documents – called Article IV reports – covering a 14-year period from 2011 to 2025.
Surveillance is one of the three main activities of the IMF, the others being lending and capacity development. Bilateral (IMF to country) surveillance is supposed to represent an annual ‘health check’ of a country’s economy. Every member state undergoes this analysis and, although the policy advice contained in Article IVs is not mandatory, it’s extremely influential and most countries can ill afford to ignore the IMF’s policy prescriptions given their market signalling impact.
It’s particularly important when it comes to fiscal policy including tax, subsidies, funding of public services, and labour market policies, which are crucial to social development, climate action and addressing social and gender inequality.
To ascertain how IMF policy has developed over the past 14 years, we used a combination of AI (Artificial Intelligence) and human research methods to categorise the reports by policy areas relevant to civil society, including climate, gender, austerity, public sector funding, tax and social protection.
The findings reveal that IMF policy advice has remained remarkably consistent. 99 per cent of the reports recommended some form of fiscal austerity. In 96 per cent of these cases, fiscal constraint was primarily based on reforms to the public sector, including rationalising, freezing or cutting the wage bill of public sector workers. On the other hand, the private and external sector’s role in the economy was magnified. 78 per cent of reports focused on creating a ‘business friendly environment’ and encouraged deregulation to attract private and external sector funding, including foreign direct investment (FDI).
This policy direction is identical to that described as ‘structural adjustment’ – which, despite the IMF’s pronouncements that the era of structural adjustment is over and its stated concern for rising social inequality, has been dominant in the institution since the 1980s. They consist of rolling back the state, particularly in the area of welfare, cutting public services, and empowering the private and external sector. They have been heavily criticised as counter-productive to IMF’s stated objectives, and for trapping countries in a cycle of harmful austerity measures, with the effect of constraining their economic development and ability to provide basic services to their citizens.
Our research supports previous studies, such as research carried out by Oxfam on IMF lending during Covid-19, that demonstrates that IMF policy is consistent even during times of crisis. The period 2011-2025 includes the aftermath of the financial crisis of 2008, rapid degeneration of planetary boundaries, increasing climate change related risks and catastrophes, increasing inequality feeding into political instability, economic chaos, wars and mass displacement, and a global pandemic. Rather than responding to these events, which observers might reasonably think would be part of the IMF’s ‘core mandate’ of economic growth and stability, and despite the increased frequency of crises, IMF policy has remained committed to neo-liberalism and austerity measures.
Civil society, feminist thinkers and activists, and climate justice activists from the Global South have time and time again highlighted the human impact of these policies, where women and marginalised communities pay the greatest cost. The result of these policies is that countries become more dependent on debt for core financing.
According to United Nations research, during the 2000s public debt levels reached a record US$102 trillion, and the number of countries facing high levels of debt (over 60 per cent of GDP) increased from 22 countries in 2011 to 58 countries in 2025, meaning that by 2025, one in three developing countries – home to 3.4 billion people – spent more on interest payments than on education or health. A report on the global debt crisis published recently by UK-based CAFOD, states that the most food-insecure countries have seen the highest increases in debt servicing, which is expected to consume 55 per cent of low-income countries’ budgets in sub-Saharan Africa by 2025.
After over a decade of policies, countries are now facing the worst debt crisis in a generation – while the IMF has so far demonstrated unwillingness to accept the depth of the problem, that is being worsened every day by the continuation of austerity policies.
This year, the IMF is conducting a review of its surveillance – the CSR – which is taking place in the context of the institution rolling back what commitments it had made in previous reviews to include coverage of what it calls ‘emerging issues’ – climate, gender and inequality – in order to remake itself in the image of its largest shareholder, the USA and to be seen to be abiding by the anti-DEI pronouncements of the Trump administration. Recently the institution has closed its climate and gender departments, after Managing Director Kristalina Georgieva claimed that it “has no climate experts”.
Yet the IMF’s commitment to real action on social inequality, gender equality or climate has always been questionable because, fundamentally, this would require it to break from the ideology of neoliberalism. In this year’s internal IMF surveillance review, civil society are calling for the IMF to adopt mandatory ex ante and ex post distributional, gender and climate impact assessments of its own policies, that are public and formulated in participation with civil society, labour unions and other stakeholders.
They are also calling for mandatory and meaningful country level consultation with civil society and other stakeholders on IMF policy. More broadly, civil society are demanding a comprehensive debt relief framework anchored on an independent mechanism, including full debt cancellation for countries that require it, and crucially an end to harmful austerity policies that continue the cycle of extractivism and debt.
Category
News & views