Structural adjustment and living conditions in developing countries

TL;DR: In this paper, the authors compare trends in per capita private consumption, social sector indicators, and government spending in the social sectors, between countries that received Bank adjustment loans and countries that did not.

Abstract: The authors compare trends in per capita private consumption, social sector indicators, and government spending in the social sectors, between countries that received Bank adjustment loans and countries that did not. They point out that there is little reason to believe that the poor are being hurt by adjustment because absorption is reduced. But there is still cause for concern : real per capita spending in the social sectors decreased in many countries, especially those adjusting intensely. Improving the living conditions of the poor calls for growth oriented policies, the effects of which will be felt only in the long run. During adjustment, immediate interventions are needed to mitigate short run welfare losses experienced by readily identifiable groups.