Introduction

In April 1980, the World Bank's first structural adjustment program, a $200 million loan to Turkey, became effective. Adjustment programs for Kenya and Bolivia, then for as many as a dozen other countries, received funding from the World Bank before the end of 1981. During the ensuing 10 years of adjustment lending more than $28.5 billion flowed to 64 countries through 187 separate lending operations. High interest rates, declining commodity prices, and internal and external imbalances in the industrialized societies created adverse economic conditions for the developing world by the beginning of the 1980s. In addition, developing countries were often beset by deeply rooted economic distortions and inefficiencies that had become widespread in their production, distribution, and financial systems. Ten years later, however, a broad, often impassioned debate continues regarding the success of structural adjustment lending in stabilizing distressed economies and creating favorable conditions for longer-term economic growth.