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. Th...
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2014
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| Subjects: | |
| 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 |
| Summary: | 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. |
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