ABSTRACT
BACKGROUND ‘Structural adjustment’, for the purposes of this essay, is that part of development policy devoted to achieving a boost to the supply side of an economy by the removal of market imperfections; it is therefore to be contrasted with stabilization, which seeks to control the demand side, and also with long-term supplyside policies, such as research and sectoral investment policy. In the 1980s the phrase was used by many as a synonym for appropriate development policy and treated, like motherhood, as a good and necessary thing in itself; but even among those using our own strict definitions, there remain multiple differences between those who, like the Latin-American structuralists of the 1980s, favour the removal of imperfections through state intervention (for example, in land and credit markets) and those who, like the World Bank in the 1980s, favour their removal by state withdrawal; and within the latter group, disputes persist concerning which markets should be liberalized and in what order, which are further clouded by enormous inter-country differences in what is politically feasible. Figure 1.1 provides a map of the various pathways into which development policy, and debate about it, ramifies.
