Although World Bank and IMF adjustment lending was intended to deal with the immediate macroeconomic crises, it was also seen as a way of making poor economies more efficient and therefore better able to grow. Growth required a reduced role for the state in the productive sectors, as well as reduced controls on the private sector. Irrespective of the merits or otherwise of reform, countries in economic crisis had little alternative but to sign up to the conditionality, since private capital flows slowed dramatically with the onset of the debt crisis in the XXX and official development flows became one of the few sources of external finance. This was especially true for the low-income countries.
The effects of reforms are never clear-cut. Many people oppose reform (ex ante) fearing a loss, even if this is not the case (ex post). Conversely, some people may gain a lot (for example those producing exports), but the gains are not immediate. Sometimes, a particular reform will benefit the majority of people,
Although World Bank and IMF adjustment lending was intended to deal with the immediate macroeconomic crises, it was also seen as a way of making poor economies more efficient and therefore better able to grow. Growth required a reduced role for the state in the productive sectors, as well as reduced controls on the private sector. Irrespective of the merits or otherwise of reform, countries in economic crisis had little alternative but to sign up to the conditionality, since private capital flows slowed dramatically with the onset of the debt crisis in the XXX and official development flows became one of the few sources of external finance. This was especially true for the low-income countries.The effects of reforms are never clear-cut. Many people oppose reform (ex ante) fearing a loss, even if this is not the case (ex post). Conversely, some people may gain a lot (for example those producing exports), but the gains are not immediate. Sometimes, a particular reform will benefit the majority of people,
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