Adjustment and poverty : options and choices /

Stewart sheds much needed light on the debate over whether structural adjustment policies hurt or help the poor in less developed countries (LDCs). The central thesis of her book is that structural adjustment, either championed by international financial institutions or developed domestically, has hurt the poor in terms of both income and other social indicators. This, she contends, need not be so, arguing that poverty can be reduced during the period of adjustment by a judicious use of appropriate macro and meso policies. Growth-promoting macro policies that emphasize expenditure switching rather than absorption reduction can decrease poverty during the adjustment period. Even when macro policies do not result in increased economic performance, there are meso policies, such as nutritional supplementation and income subsidies, that governments can implement to attenuate the negative effects of adjustment programs on the poor. The first three chapters of the book introduce the theoretical relationship between adjustment and poverty; chapters 4 and 5 consider two policy issues relevant to poverty alleviation--errors in targeting and the political economy of social funds allocation during adjustment; remaining chapters look at empirical evidence from six developing countries and conclude the book. Well written and documented with the latest available statistics, this book brings fresh air to the debate over the distributional impact of structural adjustment. Must reading for all involved in structural adjustment and good supplemental reading for upper-division undergraduates and graduate students studying economic development. K. Gyimah-Brempong University of South Florida