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Growth oriented adjustment programs : a statistical analysis


  • Faini, Riccardo*de Melo, Jaime*Senhadji-Semlali,


After the fall in average per capita GDP growth that took place in the 1980s, adjustment lending programs supported by the International Monetary Fund (IMF) and the World Bank (WB) were launched in response to the deteriorating external environment. The purpose of this paper is to evaluate and to assess statistically the extent to which adjustment programs supported by the IMF and the WB have restored growth. The evaluation relied on a large sample of countries (93) and controls for some of the statistical difficulties associated with measuring the effectiveness of adjustment programs. The paper reviews the environment under which IMF-WB lending took place, the rationale for adjustment lending, and the distribution of adjustment loans through time. The results of the statistical evaluation suggest that, after controlling for external factors and for initial conditions, growth is not higher in countries that receive IMF-WB funds, but that investment was significantly lower than for non-recipient countries. The paper also examines further long-term growth prospects.

Suggested Citation

  • Faini, Riccardo*de Melo, Jaime*Senhadji-Semlali,, 1990. "Growth oriented adjustment programs : a statistical analysis," Policy Research Working Paper Series 426, The World Bank.
  • Handle: RePEc:wbk:wbrwps:426

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    References listed on IDEAS

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    6. Buffie, Edward F., 1986. "Devaluation, investment and growth in LDCs," Journal of Development Economics, Elsevier, vol. 20(2), pages 361-379, March.
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    10. Buffie, Edward F., 1984. "The macroeconomics of trade liberalization," Journal of International Economics, Elsevier, vol. 17(1-2), pages 121-137, August.
    11. Balassa, Bela, 1988. "Quantitative appraisal of adjustment lending," Policy Research Working Paper Series 79, The World Bank.
    12. Jan F. Kiviet, 1986. "On the Rigour of Some Misspecification Tests for Modelling Dynamic Relationships," Review of Economic Studies, Oxford University Press, vol. 53(2), pages 241-261.
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    Cited by:

    1. Nunnenkamp, Peter, 1995. "Wirtschaftsreformen in Entwicklungs- und Transformationsländern: Anreizprobleme, Glaubwürdigkeitsdefizite und die Erfolgschancen umfassender Reformen," Open Access Publications from Kiel Institute for the World Economy 1636, Kiel Institute for the World Economy (IfW).
    2. de Melo, Jaime & Dhar, Sumana, 1992. "Lessons of trade liberalization in Latin America for economies in transition," Policy Research Working Paper Series 1040, The World Bank.
    3. Elbadawi, Ibrahim A. & Ghura, Dhaneshwar & Uwujaren, Gilbert, 1992. "World Bank adjustment lending and economic performance in sub-Saharan Africa in the 1980s : a comparison with other low income countries," Policy Research Working Paper Series 1000, The World Bank.
    4. de Melo, Jaime & Montenegro, Claudio & Panagariya, Arvind, 1992. "Regional integration, old and new," Policy Research Working Paper Series 985, The World Bank.
    5. Dicks-Mireaux, Louis & Mecagni, Mauro & Schadler, Susan, 2000. "Evaluating the effect of IMF lending to low-income countries," Journal of Development Economics, Elsevier, vol. 61(2), pages 495-526, April.
    6. Buffie, Edward F. & Won, Yongkul, 2001. "Devaluation and investment in an optimizing model of the small open economy," European Economic Review, Elsevier, vol. 45(8), pages 1461-1499, August.
    7. Rose, Pauline, 1995. "Female education and adjustment programs: A crosscountry statistical analysis," World Development, Elsevier, vol. 23(11), pages 1931-1949, November.
    8. Jinjarak, Yothin & Salinas, Gonzalo & Tsikata, Yvonne M., 2013. "The effect of World Bank trade adjustment assistance on trade and growth, 1987–2004: Is the glass half full or half empty?," Economic Systems, Elsevier, vol. 37(3), pages 415-430.
    9. Tarp, Finn, 1994. "De makroøkonomiske reformer i teoretisk belysning
      [Macroeconomic Reforms in Theoretical Context]
      ," MPRA Paper 64206, University Library of Munich, Germany.
    10. Devarajan, Shantayanan & de Melo, Jaime, 1990. "Membership in the CFA zone : Odyssean journey or Trojan horse?," Policy Research Working Paper Series 482, The World Bank.
    11. Haddad, Lawrence & Brown, Lynn R. & Richter, Andrea & Smith, Lisa, 1995. "The gender dimensions of economic adjustment policies: Potential interactions and evidence to date," World Development, Elsevier, vol. 23(6), pages 881-896, June.

    More about this item


    Country Strategy&Performance; Environmental Economics&Policies; Achieving Shared Growth; Economic Theory&Research; International Terrorism&Counterterrorism;

    JEL classification:

    • L65 - Industrial Organization - - Industry Studies: Manufacturing - - - Chemicals; Rubber; Drugs; Biotechnology; Plastics
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship


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