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Poverty and income distribution during adjustment : issues and evidence from the OECD project

Author

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  • Bourguignon, Francois
  • de Melo, Jaime
  • Morrisson, Christian

Abstract

Drawing lessons from country studies, the authors examine the effects of adjustment policies on the distribution of income in Chile, Cote d'Ivoire, Ecuador, Indonesia, Malaysia, and Morocco. After analyzing the issues that must be confronted in designing adjustment programs with a focus on poverty, they synthesize the main conclusions of the different country studies. With simulation exercises they explore the effects of the design of the adjustment packages on poverty and on the sustainability of the measures undertaken in these countries. These exercises show considerable diversity in the evolution of income distribution during adjustment. They also expose the fatal flaws of narrowly designed adjustment programs. Adjustment programs - whether focused on efficiency or on welfare - will fail when they do not recognize the interdependence of the three criteria of efficiency, welfare, and political feasibility. Adjustment programs must be carefully packaged to fit country circumstances, taking into account both the political and economic environments.

Suggested Citation

  • Bourguignon, Francois & de Melo, Jaime & Morrisson, Christian, 1991. "Poverty and income distribution during adjustment : issues and evidence from the OECD project," Policy Research Working Paper Series 810, The World Bank.
    • Handle: RePEc:wbk:wbrwps:810
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    References listed on IDEAS

    as
    1. Bourguignon, Francois, 1991. "Optimal Poverty Reduction, Adjustment, and Growth," The World Bank Economic Review, World Bank, vol. 5(2), pages 315-338, May.
    2. Corden, W Max, 1989. "Macroeconomic Adjustment in Developing Countries," The World Bank Research Observer, World Bank, vol. 4(1), pages 51-64, January.
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