What did structural adjustment adjust? The association of policies and growth with repeated IMF and World Bank adjustment loans

William Easterly

    Research output: Contribution to journalArticle


    Analysis of adjustment loans often overlooks their repetition to the same country. Repetition changes the nature of the selection problem. None of the top 20 recipients of repeated adjustment lending over 1980-99 were able to achieve reasonable growth and contain all policy distortions. About half of the adjustment loan recipients show severe macroeconomic distortions regardless of cumulative adjustment loans. Probit regressions for an extreme macroeconomic imbalance indicator and its components fail to show robust effects of adjustment lending or time spent under IMF programs. An instrumental variables regression for estimating the causal effect of repeated adjustment lending on policies fails to show any positive effect on policies or growth.

    Original languageEnglish (US)
    Pages (from-to)1-22
    Number of pages22
    JournalJournal of Development Economics
    Issue number1
    StatePublished - Feb 1 2005



    • Economic growth
    • IMF
    • Macroeconomic stability
    • National policies
    • Structural adjustment
    • World bank

    ASJC Scopus subject areas

    • Development
    • Economics and Econometrics

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