On November 7, 2007, the West African Research Center was honored to host a presentation by Dr. Howard Stein on the topic: “Africa and the making of structural adjustment”. Dr. Stein is a Professor at the Center for Afro-American and African Studies of the University of Michigan. The presentation was moderated by Dr. Ibrahima Seck of the department of History of Cheikh Anta Diop University. It was mostly attended by West African and American students. The topic found a strong local interest because, a week earlier, President Wade of Senegal had announced a set of economical measures so reminiscent of the structural adjustment of the 1980s.

Summary of the presentation:
Beginning in 1980, the most ubiquitous and consequential set of policies influencing the developing world has been a series of economic reforms sponsored by the World Bank, International Monetary Fund and other multilateral and bilateral donors. From their inception, these policy packages, known as structural adjustment, were imposed as conditionality for receiving loans from the World Bank and the IMF. Underlying these packages was the belief that growth and development would arise from the stabilization, liberalization, and privatization of economies.

Each component of the structural adjustment was justified by neo-classical theory. Stabilization focused on macro goals and was aimed at reducing volatility and restoring balance in the economy. By this logic, constraining monetary growth and cutting government spending should reduce inflation and imbalances in the current account and government budgets. Liberalization, meanwhile, retracted state intervention in markets in order to reverse the price distortions that were believed to impede consumers and private producers from making optimal choices. In addition to reducing government regulations, liberalization often meant “freeing up” prices by removing government subsidies on goods, such as food for consumers, and discontinuing input commodities, such as fertilizer for farmers. User fees or charges to individuals for utilizing public goods like education and healthcare were introduced to promote “efficiency” in their allocation. Finally, privatization meant selling state assets to the private sector in the assumption that private property ownership would encourage greater efficiency, investment and growth.

Despite more than two and a half decades of rather disappointing results, these policies still remain at the core of the Bank’s strategy. Along those lines, in 1989, the World Bank began to expand its developmental lexicon to include other issues, such as governance and capacity building, social capital, poverty reduction, sustainable development, decentralization, and ownership. In Bank officials’ view, the failure of the 1980s was never the fault of structural adjustment but external factors that limited the positive influence of neo-liberal policies.