Counterfactual Analysis of the Impact of the IMF Program on Child Poverty in the Global-South Region using Causal-Graphical Normalizing Flows

Abstract

This work demonstrates the application of a particular branch of causal inference and deep learning models: \emph{causal-Graphical Normalizing Flows (c-GNFs)}. In a recent contribution, scholars showed that normalizing flows carry certain properties, making them particularly suitable for causal and counterfactual analysis. However, c-GNFs have only been tested in a simulated data setting and no contribution to date have evaluated the application of c-GNFs on large-scale real-world data. Focusing on the \emph{AI for social good}, our study provides a counterfactual analysis of the impact of the International Monetary Fund (IMF) program on child poverty using c-GNFs. The analysis relies on a large-scale real-world observational data: 1,941,734 children under the age of 18, cared for by 567,344 families residing in the 67 countries from the Global-South. While the primary objective of the IMF is to support governments in achieving economic stability, our results find that an IMF program reduces child poverty as a positive side-effect by about 1.2$\pm$0.24 degree (`0' equals no poverty and `7' is maximum poverty). Thus, our article shows how c-GNFs further the use of deep learning and causal inference in AI for social good. It shows how learning algorithms can be used for addressing the untapped potential for a significant social impact through counterfactual inference at population level (ACE), sub-population level (CACE), and individual level (ICE). In contrast to most works that model ACE or CACE but not ICE, c-GNFs enable personalization using \emph{`The First Law of Causal Inference'}.