Structural adjustment: A survey of the issues and options

The article raises and attempts to answer questions such as: adjustment for what purpose? to what shocks? of what factors or forces? by whom? who loses and who benefits from adjustment? and adjustment how? It also discusses the question of adjustment when? The distinction between external and internal shocks is rejected as neither helpful for the allocation of blame nor for the justification of raising finance. An analysis of the impact on the poor is sketched out. After a brief discussion of the role of the market and government intervention in adjustment policy and the fallacy of aggregating country policies, there follows a discussion of the double paradox of conditionality: why should a donor impose conditions that are in the best interest of the recipient, and why, instead of paying for getting good advice, is the recipient rewarded with extra money? Ten possible reasons are given. The paper ends with proposals as to how to overcome the conflict between national sovereignty and assuring that donor money is well spent.