Since 1986 the Fund has embarked on a number of structural adjustment programs with eligible member countries.1 During the past few years there has been considerable discussion on how structural programs supported by resources from the IMF and the World Bank could more specifically integrate growth-oriented policies to achieve growth objectives in a medium-term context. In 1987 the Group of Twenty-Four proposed, for example, that “growth exercises” be performed prior to the “financial exercises.” From these exercises the amount of external finance necessary to support a growth-oriented adjustment program could be determined.2 The objective of this paper is to discuss some of the public expenditure management (PEM) measures that were included in Fund-supported structural adjustment programs. The first section briefly outlines the central role of fiscal programs and their interaction with structural policies; the second section outlines the key areas where measures were taken to strengthen public expenditure management in SAF programs; and the remainder of the paper addresses the question of the degree of effectiveness of such systemic and process reforms in an attempt to highlight problem areas that may need to be taken into account in the design and implementation of PEM measures, particularly those relating to motivation issues.

Issues and Country Studies
Editor: A. Premchand