Structural Adjustment Programs: Some New Findings
Recent studies on structural adjustments in LDCs highlight two results. First, intensive adjustment lending countries performed better than non adjustment lending countries during the late eighties (judged by many performance indicators, of which growth in real GDP is the most important indicator), and secondly, middle-income countries performed better than low-income countries. The methodology used in those papers has one problem. It ignores the distribution of the growth rate in an adjustment lending country during the period 1985 to 1990. If we consider the distribution of the growth rate ( not simply the average growth rate, which fails to show whether the improvement in the growth rate is sustainable or not), then we argue that low-income adjustment lending countries performed better than middle-income countries during the late eighties especially in the counterfactual situation where the growth rate of high income economies is held constant.
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