Structural Adjustment Programs And Economic Stabilization In Central America

Seminar paper from the year 2017 in the subject Politics - Region: Middle and South America, grade: 1,5, University of Potsdam (Chair for Political Science, Public Administration and Organization), course: Government and Governance in Developing Countries, language: English, abstract: In this short paper, I followed a comparative case study approach to explore the reforms and reform outcomes in four different Latin-American countries during the 1980s. I chose Chile as a successful example of structural adjustment politics and Bolivia, Peru and Argentina as deviating cases to evaluate different reform success. My findings supported a case-by-case evaluation. It turned out that orthodox structural adjustment policies were implemented differently in every country due to country-specific political, historical and institutional features as well as an altering relationship to international financing institutions. Generally, orthodox reforms seemed to back economic stabilization but not necessarily structural economic adjustment. A review of the current state of literature showed differing explanations for varying reform success. While some researchers attribute failure to heterodox deviation, others see a too orthodox course or suggest an explanation by inappropriate time and place for the reforms. Further research will be needed to clarify causalities. It is suggested to put a stronger focus on underlying context-dependent reform drivers and stumbling blocks.

Seminar paper from the year 2017 in the subject Politics - International Politics - Region: Middle- and South America, grade: 1,5, University of Potsdam (Chair for Political Science, Public Administration and Organization), course: Government and Governance in Developing Countries, language: English, abstract: In this short paper, I followed a comparative case study approach to explore the reforms and reform outcomes in four different Latin-American countries during the 1980s. I chose Chile as a successful example of structural adjustment politics and Bolivia, Peru and Argentina as deviating cases to evaluate different reform success. My findings supported a case-by-case evaluation. It turned out that orthodox structural adjustment policies were implemented differently in every country due to country-specific political, historical and institutional features as well as an altering relationship to international financing institutions. Generally, orthodox reforms seemed to back economic stabilization but not necessarily structural economic adjustment. A review of the current state of literature showed differing explanations for varying reform success. While some researchers attribute failure to heterodox deviation, others see a too orthodox course or suggest an explanation by inappropriate time and place for the reforms. Further research will be needed to clarify causalities. It is suggested to put a stronger focus on underlying context-dependent reform drivers and stumbling blocks.

The debt crisis in Latin America has rekindled debate about the effects of the IMF's stabilization programs in the Third World. Critics contend that these programs have short-run recessionary impacts and damage prospects for long-term growth. In response, Fund economists point to cross-country studies revealing mixed impacts on growth rates coupled with significant success in achieving the IMF's stated goals: current account and balance-of-payments improvements and inflation rate reduction. Dr. Pastor argues that the traditional growth-oriented critique is theoretically misplaced, and he recasts Fund activities in terms of class and income distribution. Applying the methodology of previous Fund studies, he evaluates the effects of IMF programs in eighteen Latin American countries in the pre-crisis period (1965-1981).

Structural Adjustment: Theory, Practice and Impacts examines the problems associated with Structural Adjustment Programmes (SAPs) and reveals the damaging impacts they can have. The book looks at how the debt crisis of the 1970's forced developing countries to seek external help and then reviews what constitutes as a standard adjustment programme, detailing the political, economic, social and environmental impacts of SAPs. The final section draws together theories and political responses and presents a case for alternatives to the programmes.

Central America experienced moderate growth during the last decade, including in the years leading up to the global financial crisis, but the rate of convergence toward advanced country income levels has still been slow. Moreover, forecasts imply that these trends will continue. What can be done to spur higher growth in Central America? We bring new data to bear on this question-version 7.0 of the Penn World Table and a new IMF database on structural reforms. Our cross-country panel regression of economic growth using System GMM captures the importance to growth of conditional convergence, factor accumulation, and macro policies. In addition, structural efficiency is a significant factor in explaining growth performance. We construct a broad index of efficiency and find that increasing the degree of structural efficiency by one standard deviation raises growth by 1⁄2 percent. This implies that Central American countries could significantly increase their long-run growth rates by increasing the flexibility of markets and improving the quality of regulation.