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The Political Feasibility of Adjustment

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  • Christian Morrisson

Abstract

In the history of adjustment, concern with the political aspects appeared only after long reflection. At the beginning of the 1980s, given the urgency of the financial crises afflicting many developing countries, the only thought was to restore macroeconomic balances, particularly the balance of payments, by means of short-term measures — budget cuts and tight monetary policy — and through devaluation. Adjustment was limited to a stabilization programme, the sole criterion being the reduction of the external deficit as rapidly as possible. It was soon realised, however, that stabilization is not an end in itself: reducing demand is not enough; it is also necessary to increase supply by improving resource allocation. Under the goading of the international organisations, stabilization measures were therefore supplemented by structural adjustment measures, such as reducing customs duties, deregulating financial markets and eliminating distortions in agricultural prices. This distinction between stabilization and structural adjustment is important from the political standpoint. In fact, a stabilization programme is a kind of emergency treatment....

Suggested Citation

  • Christian Morrisson, 1996. "The Political Feasibility of Adjustment," OECD Development Centre Policy Briefs 13, OECD Publishing.
    • Handle: RePEc:oec:devaab:13-en
    DOI: 10.1787/112047535116
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    Cited by:

    1. Zeljko Bogetic & Issa Sanogo, 2005. "Infrastructure, Productivity and Urban Dynamics in Cote d'Ivoire, Africa Region Working Paper Series No. 86 (July 2005), The World Bank, Washington D.C," Urban/Regional 0510001, University Library of Munich, Germany.
    2. Grekou, Carl, 2019. "From nominal devaluations to real depreciations," International Economics, Elsevier, vol. 157(C), pages 68-81.
    3. Graham Bird & Dane Rowlands, 2003. "Political Economy Influences Within the Life‐Cycle of IMF Programmes," The World Economy, Wiley Blackwell, vol. 26(9), pages 1255-1278, September.
    4. Paul Mosley, 2013. "Two Africas? Why Africa’s ‘Growth Miracle’ is barely reducing poverty," Global Development Institute Working Paper Series 19113, GDI, The University of Manchester.
    5. Paul Mosley, 2012. "The politics of what works for the poor in public expenditure and taxation: a review," Global Development Institute Working Paper Series esid-011-12, GDI, The University of Manchester.
    6. Paul Mosley, 2004. "Institutions And Politics In A Lewis‐Type Growth Model," Manchester School, University of Manchester, vol. 72(6), pages 751-773, December.

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