The Effect of International Monetary Fund and World Bank Programs on Poverty

Structural adjustment - as measured by the number of adjustment loans from the IMF, and the World Bank - reduces the growth elasticity of poverty reduction. The author finds no evidence for structural adjustment having a direct effect on growth. The poor benefit less from output expansion in countries with many adjustment loans, than they do in countries with few such loans. By the same token, the poor suffer less from an output contraction in countries with many adjustment loans, than in countries with few. Why would this be? One hypothesis is that adjustment lending is counter-cyclical, in ways that smooth consumption for the poor. There is evidence that some policy variables under adjustment lending are counter-cyclical, but no evidence that the cyclical component of those policy variables affects poverty. The author speculates that the poor may be ill placed to take advantage of new opportunities, created by structural adjustment reforms, just as they may suffer less from the loss of old opportunities in sectors that were artificially protected before reform. Poverty's lower sensitivity to growth under adjustment lending, is bad news when an economy expands, and good news when it contracts. These results could be interpreted as giving support to either the critics, or the supporters of structural adjustment programs.

Bibliographic Details

Main Author:	Easterly, William
Format:	Policy Research Working Paper biblioteca
Language:	English en_US
Published:	World Bank, Washington, DC 2001-01
Subjects:	ABSOLUTE VALUE, ADJUSTMENT LENDING, ADJUSTMENT LOANS, ADJUSTMENT PROGRAMMES, AGGREGATE OUTPUT, AVERAGE GROWTH, BLACK MARKET, BLACK MARKET PREMIUM, BUDGET DEFICITS, COUNTERFACTUAL, CREDITS, DEPENDENT VARIABLE, DESCRIPTIVE STATISTICS, DEVELOPING COUNTRIES, DEVELOPMENT ECONOMICS, DEVELOPMENT RESEARCH, DISTORTION, DOMESTIC CREDIT, ECONOMIC CONTRACTION, ECONOMIC CONTRACTIONS, ECONOMIC DEVELOPMENT, ECONOMIC GROWTH, ECONOMIC PERFORMANCE, GINI COEFFICIENT, GROWTH ELASTICITY, GROWTH RATE, HIGH ELASTICITY, HIGH INEQUALITY, HIGH POVERTY, HOUSEHOLD CONSUMPTION, HOUSEHOLD SURVEYS, HUMAN CAPITAL, INCOME SMOOTHING, INFLATION, INSURANCE, LABOR MARKET, LOG CHANGE, LOW INEQUALITY, LOW SHARE, LOW-INCOME COUNTRIES, MACRO POLICY, MACROECONOMIC CONDITIONS, MACROECONOMIC FRAMEWORK, MEAN GROWTH, MEAN INCOME, MEAN INCOME GROWTH, NEGATIVE EFFECT, NEGATIVE SIGN, PER CAPITA INCOME, POLICY CHANGES, POLICY ISSUES, POLICY MEASURES, POLICY RESEARCH, POLICY VARIABLES, POLITICAL ECONOMY, POVERTY CHANGE, POVERTY LINE, POVERTY RATE, POVERTY RATES, POVERTY REDUCING, POVERTY REDUCTION, POVERTY REDUCTION STRATEGIES, POVERTY REDUCTION STRATEGY, PRO- POOR, PRO-POOR, PUBLIC EXPENDITURE, REAL EXCHANGE RATE, REDUCING POVERTY, RELATIVE PRICES, SAFETY NETS, SECTOR ACTIVITIES, SOCIAL SAFETY NETS, STATE ENTERPRISES, STRUCTURAL ADJUSTMENT, STRUCTURAL ADJUSTMENT LOANS, STRUCTURAL ADJUSTMENT PACKAGES, STRUCTURAL ADJUSTMENT PROGRAMS, STRUCTURAL ADJUSTMENT REFORMS, TAXATION, WEALTH,
Online Access:	http://documents.worldbank.org/curated/en/2001/01/888122/effect-international-monetary-fund-world-bank-programs-poverty http://hdl.handle.net/10986/19722
Tags:	Add Tag No Tags, Be the first to tag this record!