Strengthening or weakening disaster resilience? An analysis of the impacts of international financial institutions’ support to crisis affected countries (2010-2021)

In the wake of the Covid-19, the International Monetary Fund announced a set of reform to Catastrophe Containment and Relief Trust in an attempt “to provide immediate debt service relief for its poorest and most vulnerable members affected by the current COVID-19 pandemic and any future pandemics” (IMF 2022). The aim of the reform – the third since the establishment of the funding mechanism after the Haiti earthquake in 2010 – is to expand the range of disasters making countries eligible to debt relief. In 2011, the International Development Association of the World Bank group also rushed to bedside of crisis-affected societies through the creation of the Crisis Response Window allowing countries to benefit from support in mitigating the effects of “severe” and “slow onset” crises (World Bank 2022). Given the disastrous effects crises have on the economic stability and socio-economic development of countries, the activism of the IFIs in this field is not surprising. Yet, compared with other forms of relief aid, it has, so far, received very limited scholarly attention. The aim of this paper is to fill this gap by assessing how effective are the WB and IMF’s programmes in making economies and societies more resilient to crises. To do so, it develops an analytical framework focusing on the short-term and medium-term impact of IFI’s funding on the ability of recipient countries to cope with a crisis. While the short-term impact focuses on the immediate aftermath of a crisis and on the evolution of humanitarian needs, the medium-term impacts relate to the socio-economic and political dimensions of crisis resilience. I test this framework using panel data from 2010 to 2021.