ABSTRACT

This book and its companion revisit a topic first examined (with Graham Bird, Jennifer Sharpley and Mary Sutton) in the early 1980s (see Preface). The back-drop to that study was one of acute global economic turmoil and fierce controversies about the policies of the IMF and their consequences. The second oil shock of 197980 (whose consequences for oil-importing developing countries were far more severe than the first, 1973, price explosion) and an associated recession among industrial countries had contributed to acute balance-of-payments difficulties in many developing countries. The world was marked by huge but rapidly changing payments disequilibria; large but unstable private banking flows; and uncertainties about the role of the IMF in an era of large imbalances and volatile exchange rates. The international financial system thrust much of the burden of adjustment to these forces upon deficit developing countries with no parallel leverage to exert upon those earning the counterpart surpluses, thus threatening the well-being of peoples already living below or close to the poverty line.