Abstract
Ever since developing countries in the 1980s introduced a set of macroeconomic measures that are collectively referred to as “adjustment,” scholars and politicians have expressed concern about the effect of adjustment on the poor. The concern usually centers on social development, because adjustment policies may adversely affect the availability of affordable health and education services. This concern is understandable. Adjustment policies include a combination of measures designed to reduce government expenditures, to curtail—at least in the short run—private consumption, and—through changes in trade and exchange rate regimes, taxes, and subsidies—to realign consumer prices with (world) market prices. Such measures often result in price increases for food products, drugs and pharmaceuticals, and (imported) school supplies.
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