Structural adjustment reconsidered

the long version

The often emotional debate over the impact of structural adjustment on the poor in Africa has been confused by the complexity of economic reforms and their inconsistent implementation, the diversity of prior conditions, and confounding effects of external shocks. Going beyond simple "before and after" comparisons, Professors Sahn, Dorosh, and Younger isolate from other factors the effect of specific policy measures associated with adjustment programs. The analysis draws primarily on the experience of ten African countries: Cameroon, The Gambia, Ghana, Guinea, Madagascar, Malawi, Mozambique, Niger, Tanzania, and Zaire. It combines description of policy reforms and survey data, and quantitative simulations using multimarket and computable general equilibrium (CGE) models. The authors suggest that contrary to common belief, adjustment policies - in particular trade and exchange rate, fiscal, and agricultural reforms - do not harm the poor in Africa. Reforms in fact usually benefit the poor slightly, but alone are insufficient to reduce poverty significantly.